Will short-term thinking eventually sink Apple in India?

In a deviation from its standard policy to make only older iPhones in India, Apple has commenced production of the high-end iPhone XR in that country. Until now, only the iPhone 7 and iPhone 6S were produced there.

A new $1bn investment by the firm’s manufacturing affiliates in India has, however, made it possible to start making the iPhone 11 in India. This means that Apple will no longer be paying a 20% import duty on these devices.

Despite this, Apple executives have told the press that the company won’t be cutting the prices of its smartphones in India.

In fact, the iPhone XR costs 5% more in India than in the US, and that is after a large price cut earlier in 2019. Following the same undeniably greedy approach with the iPhone 11 could significantly hamper Apple’s chances of long-term success in this region.

So far, Apple has sold the iPhone 11 in India for around $920, and this helped to sell out inventories soon after pre-orders launched. However, even at this price, it is still a lot more expensive than the starting price of $699 in the US.

With the device now going to be made in India, Apple has a unique chance to sell it for a cost-related price in that country and gain many new fans.

Local production will get rid of the 20% import tax and make it possible to at least sell the iPhone 11 at closer to what Americans pay for it.

Apple, however, seems to be driven by short-term profit motives. The demand for top-end smartphones in India is booming, with OnePlus dominating this market segment.

By dropping the price of the iPhone 11, Apple might be able to expand its share in the Indian smartphone market above the current 1-2% level and gain long-term buyers, but the company’s leadership appear to be stuck in a ‘let’s make a quick buck’ mindset.

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