For a company known for marketing and talking only about the premium quality of its products, it is rare that you see Apple discussing cost of its products. But then, what is also rare, is Apple’s sales declining and that too for the first time in 13 years.
iPhone is priced at around $600 in the US whereas it is higher than that in almost every part of the world. According to a research by Deutsche Bank, iPhone prices in India are on an average 31% higher than the US. This brings the country at 4th position in terms of iPhone prices only behind Sweden, Indonesia, and Brazil.
So, Tim Cook was directly confronted by NDTV’s Vikram Chanda on this issue as he said,
It’s expensive. Even in dollar terms it’s expensive because you have taxes in India and then you don’t necessarily have all the functionality that you would in the US. So you’ve got an iPhone here which is more expensive than it is in the US, with less functionality than you would have in the US, and in a country where purchasing power is a fraction of what it is in the US.
In response to this statement, Cook attributed high prices to duties, taxes and the compounding of these factors which have also led to low profitability of the company in India.
But still I recognise that prices are high. We want to do things that lower that over time to the degree that we can, so we’re looking at a number of different things,
He also said that his objective was to make Indian consumer, more able to buy iPhone at a price which looked like that of the US.
However, he further added that Apple would not consider lowering the bar of its quality and will not “compete in some of the other price bands.” So we might not see any lower priced version of iPhone specifically made for India as was being speculated by many.
Cook did not mention exactly how Apple plans to resolve this puzzle of making iPhones available in India at a price on par with the US without compromising on quality.
He also mentioned about the company plans to bring all services, such as Apple Pay, to users in India in addition to something unique if needed.
However, he again made it perfectly clear that Apple was not willing to modify its premium tag to suit conditions in India as he said,
I don’t believe personally in trying to be something you’re not. We are what we are. We’re a California company.
But it is clear that Apple CEO has at least understood the basic problem for iPhones in India. He has also shown an inclination to develop specific user content relevant to Indian audience as he presented an improved Narendra Modi iOS app during his meeting with the Indian PM Narendra Modi.
Moreover, with his visits to Siddhivinayak temple, meetings with Bollywood celebrities and attendance at an IPL match, Cook also seemed to be gaining a first-hand experience of the holy trinity of Astrology, Bollywood, and Cricket around which many Indian users consume the maximum content.
It remains to be seen how this highly talked about visit of Apple CEO will affect the strategy of the company in India which has emerged as an important market for the company as its sales decline everywhere else.