Have you ever wondered why iPhones are so expensive? Be it the newest iPhone 14, or the older iPhone 13, iPhones in India have always commanded a premium. The iPhone 14 Pro Max, in fact, is almost more expensive than the Samsung Galaxy Z Fold 4 foldable phone, especially for its top storage variants. Apple proudly advertised no price hike for iPhone 14 Pro series over the iPhone 13 Pro series, but India got to see a price hike of Rs. 10,000 across all its variants. Why is that so?
If you keep wondering the same, you have come to the right place. It is not that Apple commands a premium for the iPhones just to maintain an image of a high-end smartphone. Several factors add into the price tag of an iPhone, most of which are beyond Apple's control. Here is a quick rundown of those factors.
iPhones: Why are they so expensive in India?
- An obvious reason for the higher prices comes down to the manufacturing. Most iPhones are usually imported as completely built units from China and other markets, and that attracts taxes as well as import duties. The iPhone 14 Pro models, as well as the iPhone 14 Plus and other non-standard models aren't assembled in India.
- You may argue that some models, such as the iPhone 12, iPhone 13, and now the iPhone 14 are manufactured in India. Then why are they still expensive? That is because Indian manufacturing plants of Foxconn and Wistron only get to assemble the iPhones, while most components are imported from outside. Hence, import duties on components are applicable, which adds to the overall cost.
- Back in 2018, the Indian government raised the customs duty on mobile phone parts to 20% from 15%. The government demanded higher duties on camera modules, display and touch panels, printed circuit boards, and parts used in chargers. Over the years, the government continues to increase import duties on smartphone components, all of which keep adding to the cost of the smartphone.
- The COVID-19 pandemic induced inflation also has a big role to play in the hiked prices. The supply chain is still coping up with the huge demand, and manufacturers are passing on the added costs to customers.
Hence, this is the reason why a year-old Apple iPhone 13 still costs 40% more than what it does in the US market, despite the phone being locally manufactured. Hence, many say that it is much cheaper for someone to ask their US relatives or friends to bring them an iPhone 14, and give up the warranty as a result.
Things could change in the future though. It is said that Apple is considering shifting 25 percent of its global iPhone manufacturing to India by 2025. The Tata Group has also been rumoured to join hands with Wistron to get into manufacturing iPhones. As local manufacturing increases, Indian users could start to see much lower prices for iPhones.
As an expert in the field of technology and consumer electronics, I have a comprehensive understanding of the factors that contribute to the pricing of smartphones, particularly iPhones. My expertise is grounded in a deep knowledge of the industry, including manufacturing processes, supply chain dynamics, and economic factors affecting product costs. To demonstrate my proficiency, I will provide insights into the concepts mentioned in the article about why iPhones are expensive in India.
1. Manufacturing and Import Duties: One of the primary reasons for the high prices of iPhones in India is the manufacturing and import process. Most iPhones are imported as fully assembled units, attracting taxes and import duties. The iPhone 14 Pro models, along with other non-standard models, are not assembled in India. While some models like the iPhone 12, iPhone 13, and iPhone 14 are assembled in India, the majority of components are still imported. Import duties on these components contribute significantly to the overall cost of the smartphone.
2. Customs Duty Increase: The article mentions the increase in customs duty on mobile phone parts from 15% to 20% in 2018 by the Indian government. This rise affects various components such as camera modules, display and touch panels, printed circuit boards, and parts used in chargers. Higher import duties on these essential components lead to an increase in the overall cost of manufacturing, impacting the final retail price of iPhones.
3. Inflation and Supply Chain Disruptions: The COVID-19 pandemic-induced inflation and supply chain disruptions have played a crucial role in the elevated prices of iPhones. The global supply chain has faced challenges in meeting the high demand, leading to increased costs for manufacturers. As a result, these added costs are passed on to consumers, contributing to the higher prices of iPhones in India.
4. Potential Future Changes: The article suggests that Apple is considering shifting 25% of its global iPhone manufacturing to India by 2025. This strategic move, along with potential collaborations such as the rumored partnership between the Tata Group and Wistron, could lead to increased local manufacturing. As local manufacturing expands, it is anticipated that Indian consumers may experience lower prices for iPhones in the future.
In conclusion, the pricing of iPhones in India is influenced by a complex interplay of manufacturing, import duties, customs regulations, global economic factors, and supply chain disruptions. Understanding these factors is crucial in comprehending why iPhones, despite being locally assembled in some cases, continue to command premium prices in the Indian market.
