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Has Apple Got Its iPhone 7 Pricing Wrong in India?

Apple has a big Indian market, and with each passing day, its enthusiasts are increasing in number rapidly. It’s essential for Apple to regulate this fan-base to get the best sales figures. This time before the launch of iPhone 7 and 7 Plus, to control the pricing of its devices, Apple partnered with India’s homegrown e-commerce website Flipkart.

Apple does not sell its products directly in India but functions through a widespread network of distributors and authorised resellers. For the first time, Flipkart was chosen to source its inventory from Apple’s distribution channel in India. Apple also had a tie-up with another Indian e-commerce company called Infibeam to sell their latest iPhones directly. But its tie-up with Flipkart is the more comprehensive of the two as it involves selling of iPads and Macs as well.

With this exclusive deal dictating the terms for rest of the market, it’s natural to ask if Apple has got the pricing for iPhones right with this new gameplay in India. As you already know already know, the prices of the iPhone 7 series will begin at Rs. 60,000, and the iPhone 7 Plus will start from 72000 for the basic 32GB variant, Rs. 82,000 for 128GB and 92,000 for the 256 GB of the 7 Plus model. According to a report by CNET, India is the most expensive place to buy iPhone 6 or iPhone 6s Plus. So this brings us to the question: why are iPhones so costly in India? Rather, why are iPhones so much more expensive in India than in other countries?

There are a few unique reasons and a few combinations of reasons for this. The most common answer is the custom’s duty. If we analyse the tax structures, customs obligations and other expenses, we will find that the total amount of taxes on iPhone imports paid to the government is 11.43%. Added to this are the central government and state government taxes.

Also the import of iPhone is not classified under the “same tax code” as its accessories, which means its chargers, headphones and other accessories fall under different laws than the phone itself. By definition, they’ll be subject to other taxes, over and above those paid

Once an iPhone packet, complete with its charger, headphones and other accessories passes through the customs by paying all the duties, a VAT (Value Added tax) is further levied on it.

Apart from all the reasons mentioned above, one primary reason for the high iPhone prices is constant depreciation of the Indian rupee against the American dollar. Apple iPhone 7 starts at $649 in the USA, which is almost equal to 43000 Indian rupees, but in India, as we have already written, the phone starts from Rs 60,000.

While Apple iPhone 7 Plus is still in demand, iPhone 7 is struggling to influence the market primarily because its structure and system (barring a few changes) are not very different from iPhone 6S. And the changes that have been made are not visible; or, Phone 7 is not a significant enough upgrade from its predecessor. This is not saying that it won’t find any takers. It will, and as a matter of fact, it has. Many Apple lovers and Apple loyalists have bought Apple iPhone 7, but it has not revolutionised the market like iPhone 6S.

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