Apple’s latest iPhone 15, which has a high price tag even though it is apparently Made in India, still attracts loyal fans who line up early in the morning outside Apple Stores around the world. Apple faces a lot of backlash for keeping the prices high even though it produces the iPhone 15 in India, but the product remains highly sought-after and dominates the headlines of many newspapers.
Why is Apple making iPhones in India?
Apple started making some of its older models, such as the iPhone SE and the iPhone 11, in India in 2017. The company has collaborated with local vendors and manufacturers, such as Foxconn, Wistron, and Pegatron, to produce iPhones in India. The main motive for this move is to evade the high import taxes that India levies on foreign-made smartphones. By making iPhones in India, Apple can reduce up to 22% of the import tax and share some of the savings with Indian customers.
Another motive for Apple’s shift to India is to diversify its supply chain and lessen its reliance on China. Due to the trade conflicts and the COVID-19 pandemic, Apple has experienced some interruptions and delays in its production and deliveries from China. By enlarging its manufacturing base in India, Apple can minimize some of the risks and ensure a consistent supply of iPhones to the Indian market.
Why did not Apple lower iPhone 15 Prices?
The iPhone 15, which is manufactured in India, is still among the priciest smartphones in the Indian market. The iPhone 15 and iPhone 15 Plus with 128 GB of storage cost the same as their predecessor, the iPhone 14, starting from ₹ 79,900, while the iPhone 15 Pro with the same storage capacity has a higher starting price of ₹ 1,34,900, which is ₹5000 more than the iPhone 14 Pro with the same storage capacity. In comparison to the US prices, the iPhone 15 and iPhone 15 Pro cost about 20% and 62%, respectively more in India.
Numerous factors are responsible for the elevated cost of the iPhone 15 in the Indian market. Among these factors is the Goods and Services Tax (GST) levied on all smartphones sold in India, which stands at 18% and contributes to the overall expense of the iPhone 15. In theory, if we were to convert the base price of the iPhone 15, which is $799 (USD without tax), to Indian Rupees (INR) and then include the 18% GST, the total would be approximately ₹66,400 + ₹11,952, resulting in ₹78,352. This calculation helps explain why the ₹79,900 price tag for the iPhone 15 is reasonable.
Additionally, the increased exchange rate between the US dollar and the Indian rupee plays a role in this. The rupee has experienced depreciation against the dollar in recent years, amplifying the costs associated with importing components and meeting royalty payments for Apple.
In regards to the specific factors, while the iPhone 15 packaging indicates “Assembled in India”, it’s important to note that the phone isn’t entirely produced within India. Instead, it is assembled in India by importing various components.
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Why did Apple hike iPhone 15 Pro Prices?
Image Courtesy – TecworkZ
The iPhone 15 Pro and iPhone 15 Pro Max are more expensive and have a longer waiting period because they are “Assembled in China” (as seen on the box) and then imported. The iPhone 15, on the other hand, is assembled in India, which is closer to many of its target markets, reducing the cost and delivery time.
The iPhone 15 Pro and iPhone 15 Pro Max come with more advanced features and specifications compared to the iPhone 15. This contributes to their higher price, which is further increased by a 22% Import Duty (comprising 20% BCD: Basic Custom Duty and a 10% Social Welfare Surcharge on BCD) and an 18% GST applied on top of the iPhone’s cost, including the Import Tax.
Applying the aforementioned conversion theory to the base price of $999 USD (before tax) results in ₹83,000 (USD to INR) + ₹18,260 (22% Import Tax) + ₹18,226.8 (18% GST), totaling ₹1,19,486.8. Despite this calculation, there remains a discrepancy of roughly ₹15,413.20. It’s important to consider that Apple is unlikely to price the iPhone 15 Pro lower than the iPhone 14 Pro, and it’s possible that my calculations are not entirely accurate, or there may be undisclosed factors influencing the pricing.
Furthermore, Apple faces additional challenges in production and supply chain management, particularly due to issues stemming from China. Some customers have been quoted wait times exceeding three weeks to receive their iPhone 15 Pro or iPhone 15 Pro Max.
All things aside, the iPhone 15s will be a success story for Apple in India, despite its price tag.
