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Apple Inc. the multinational tech company that sell consumer electronics maintains a highly premium status in the Indian Market. The makers of the iPhones, iPads and the Macs, sell their products like hotcakes worldwide.

Nearing the launch of its latest smartphone the iphone 7 and iphone 7 plus in India with the prices already revealed, the question of its pricing just like every single year has already left the consumers in a little shock. Launching this October after its launch in the US last month the smartphones will cost more than any other country.

iPhone 7 launched at a price of $649 in the US but the smartphone will be selling for about $250 more in the Indian market, for a maximum retail price of close to $900 (Rs. 60,000). This is about 40% more than that of the price in the US.

The question of ‘why so’ and ‘where lies the difference’ arises automatically. Infact Apple products are the most expensive to buy in India across the globe. Some of the reasons include more and more taxes, rupee depreciation, buffer against currency fluctuation and distribution networks among others.

DISTRIBUTION NETWORK
Apple does not have any retail store as well as manufacturing unit in India. It relies on local third party retailers to sell their products and thus have to include a margin for them to make profit. With the sales declining in the China, and growing Indian market Apple is eyeing world’s second most populous country to boost their sales. Apple Chief Executive Tim Cook on a recent visit to India announced their plans of setting up manufacturing unit as well as their own retail stores in India under Foreign Direct Investment (FDI) which will definitely help in price cut of Apple products.

DEPRICIATION OF RUPEE AGAINST DOLLAR
The average exchange rates (usd to inr) for the month of October 2014 was Rs.61.61 and October 2015, it was Rs.65.74. Naturally a fall in rupee is one of the potential reasons influencing heavy pricing of Apple products.

DUTIES AND TAXES
The India selling prices includes the loads of local taxes along with excise duty in addition to the US prices. Also, government can be blamed for high excise duty of 12.5% on imported devices which itself increases the costs by an astonishing amount.

BUFFER AGAINST CURRENCY FLUCTUATION
Apple builds a buffer to cope up with the ups and downs in the value of the rupee. This is done to avoid any losses and price hike incase rupee falls. So, incase rupee is stable the company makes a marginal profit with a price more than what it should be.
POTENTIAL MARKET
With the growing Indian market Apple is eyeing the mid budget smartphone owners to taste their products by offering older iphones for very low prices. The prices of the iphone after their release are never seen to be cut down for more than a year until a new one is released. The price cut on the older device after the release of a new successor is very high and is aimed at grabbing the eyeballs of the middle class. How do they manage to do it? By pricing the newer ones very high they are able to make for the heavy price cut on older ones. One can buy a 4th generation iphone now for as low as 15k and an iphone 5 for a little over 20k.

Meanwhile there are rumors of Apple planning to sell refurbished devices.

BRAND
There is no denying the fact that Apple products are one of the best with their excellent combination of hardware and software. According to a report the cost of making an iphone 7 is near about Rs.18,000. So, why are iphones so highly priced? In India iphone is regarded as a symbol of class or status. To maintain this premium tag and a status symbol they are priced more than their competitor’s flagship.

Inspite of the insane pricing the craze for the Apple among the Indians does not seem to fade in near future and will continue to maintain its premium status in India.

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About Author

Vipul Gupta

Vipul Gupta is currently a first year engineering under graduate at NSIT, Delhi. He is pursuing engineering in the field of electronics. Passionate about technology, he moved to Delhi to proceed fast in an upscale environment. When he isn’t glued to a Computer Screen he likes travelling and exploring the city with friends.He is very innovative in thinking, very creative in execution and expert in decision making.

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