Apple Stock News
After Apple Inc. sliced iPhone 5s prices in India, it now follows a similar strategy for its latest iPhone 6s and iPhone 6s Plus models in the country. The price-cut in the country reportedly comes after a fall in sales.
According to local publication, Times of India, Apple has seen a major fall in demand in the crucial fourth quarter, after hitting highs in the festive Diwali season. On average, the difference in price of all iPhone 6s and iPhone 6s Plus smartphones, between now and the time they were launched, is nearly 15%. Though Apple started this quarter with high expectations, after strong sales in October, it may just be disappointed.
In October, the company imported nearly 32,000 units of these two models into one of the largest smart phone markets in the world. Analysis showed by local companies suggest that these import figures dropped by 62% to 120,000 units in November. While China is a much bigger economy for Apple than India, the latter’s fast growing smart phone market holds gravity for the tech giant.
Considering that Google and Facebook are making efforts to bring people to the Internet, there would inevitably be a substantial rise in demand for smartphones and contactable mobile devices in India. While Indians have had to pay premium prices, due to high import taxes on iPhones, resulting in a decline in sales, Samsung was able to resolve the issue by planting factories in the country to take out import fees from the equation.
It is speculated that Apple will follow its rival’s strategy and establish factories in the country. In September, CEO Tim Cook met with Indian Prime Minister Narendra Modi to discuss the possibility of planting factories and manufacturing products locally. Foxconn, a major component supplier for iPhones, is expected to build between 10 and 12 factories by 2020 in India. However, it is not clear whether it will manufacture Apple’s supply in those plants.
The country’s regulations do not permit companies to own retail outlets, unless a certain fraction of the manufacturing is done locally. Apple held discussions with the government of possibly loosening these laws, so it can open up its giant retail stores. This quarter is not going as well as the company initially expected it to. Best Buy offered a deep discount on the weekend offering iPhone 6s for just $1. While the new iPhones’ sales will undoubtedly be profitable, the company may not break any records this quarter, as it did last year by delivering 74.5 million iPhone sales in the same period.
