Apple always makes products that are high-end and expensive. The technology giant never compromises with their ecosystem in terms of quality, service, and satisfaction that people get using Apple products.
But have you ever imagined why are Apple products so expensive?
Considering the hefty price tag that every Apple product carries in India is hugely more than the substantive price.
According to the reports, people in India are huge fans of Apple products (iPhones, iPad, Mac). The demand for Apple products is ever-increasing in India, and more and more people are now willing to buy Apple products.
However, at some point, we all feel paying such a hefty amount for a smartphone is worthful or not. Besides, Apple products could have been a bit cheaper, but due to heavy taxation, customs duties, and middleman’s fees, the prices for Apple products are high in India, compared to other countries.
Let’s have a look at the report by The Quint:
Mr. Cyrus John from The Quint says – “If you purchase an iPhone in India, you have to pay 40% extra than the United States.”
Here’s how they have described it:
As you can see in the above image, the prices for iPhone 12 models are lower in the United States, and the minimum price difference that it carries is INR 18,620.
The difference of amount that Apple carries in India, people could buy a Xiaomi, Realme, or any other mid-range smartphone that can fulfill all basic needs. Undoubtedly, it will not be an Apple, but such a huge price difference sometimes makes us think – “why are Apple products so expensive?”
So, let’s get started!
Why Are Apple Products So Expensive?
It’s easy to defend that Apple sells its products at a very high cost in India, but there are many legit reasons for most people’s not being aware. We’ll give you a glimpse of how Apple products are marketed and supplied in India and what makes them so expensive.
Apple’s Brand Value and Trust
If you own an iPhone or any other product of Apple, it will become the icon of your lifestyle. The brand ecosystem is highly intuitive and simpler for people to use. Unlike Android, Apple focuses more on promoting the Security and Privacy of its users.
It is the trust of Data Security and Privacy that more and more people prefer Apple over other brands. Moreover, it never compromises the quality of products they make. Customers in India are still satisfied with purchasing iPhone 7, X, and XR even though there have been a lot of upgrades with the new iPhone 11 and 12 series.
No Manufacturing Plant in India
Apple does not have any manufacturing plant in India, and most of its flagship devices are imported. The brand has a huge third-party network in India for selling its products, which increases the cost. Some Apple devices are also assembled in India, including iPhone 6, 7, and SE by Foxconn and Wistron, which are relatively cheaper. However, their components are still imported and then assembled in India.
Although Apple has recently initiated an official online store in India, it will not make a difference as products price will remain the same. Additionally, Apple delivering its products via third-party networks also increases the cost as they also charge a decent amount of profit for maintaining the flow cycle.
Why not an Apple Manufacturing Plant in India?
Apple can have its own manufacturing plant in India. Still, due to the restrictions from Indian government policies, it is arduous for a brand like Apple to start in India even though having a huge market base and customers.
The Indian Foreign Direct Investment policy states that “For a company to set up a manufacturing unit in the country, it has to source 30 percent of components locally.” This is something that is practically impossible for Apple to implement in India.
Nevertheless, due to the temperamental relationships of China with countries like the USA and India, many of the Apple investors are planning to shift a major part of its business from China to India. It is not officially declared, but we can expect the same to happen in the coming time, as India is one of the fastest-growing countries in the world.
Fat Taxes and Custom Duty
Recently, the Indian government has hiked the GST (Goods and Services Tax) by 6%, making it 18 from 12. The Quint also said that “The government also increased the import duty on PCBA (printed circuit board assembly) from 10 percent to 20 percent and for chargers from 15 percent to 20 percent, which is also carried forward on the retail price.”
Apart from that, the tax levied on importing goods to India has also increased. This mostly affects the prices of Apple products, especially iPhones, to be much expensive in India. All of these taxes levied are to be borne by Indian customers, ultimately.
Apple’s devices come with their own Apple-owned proprietary applications. This is not true in Android, an open-source in which producers get Google’s operating system free and slightly tweak to fit the hardware they plan to use. Apple must build and manage iOS and MacOS services and backend services, including iCloud and iMessage, alone. This is applied to the price of goods from Apple, which in turn increases the total cost.
Additionally, it is undeniable that Apple has always proven to give the best optimal performance. And that is maintained because Apple follows its ecosystem, and technically, it is not open to all online services like Android.
Apple also costs things that you cannot use when it comes to computers. For example, Apple has created a MacBook with several applications in-house, which is taken into account in the price of any MacBook. This is separate from Windows PC, which allows you to choose and purchase applications that meet your needs. For a fraction of a MacBook price, a standard Windows PC with no additional software is available.
Apple has a vast customer base in the Indian market. With no manufacturing plant and based only on third-party networks and a few assemblers, the brand can capture and target customers. There is also a saying, “If once an iPhone user, always an iPhone user,” has proven to be true in India.
A huge Indian crowd and Apple lovers are willing to pay such a hefty amount for an iPhone. So, this also builds confidence among brands selling high-end devices, making Apple products so expensive.
The Final Takedown: Can Apple products be cheaper anytime soon?
Only if Apple pushes its expansion in India by shifting major parts of manufacturing units from China after the US-China trade erupted. Apple’s Indian assemblers Foxconn and Wistron are also seeking an eye if Apple initiates such plans.
If any manufacturing plant is launched in India, tax and customs duty, import duty, and other Foreign Direct Investment tax are eliminated; Ultimately, reducing the upper slab of the price difference between the US and India.
Cheers to Apple!