Apple plan to sell used iPhones in India suffers backlash from Android brands

Apple's latest attempt to crack the Indian smartphone market -by selling used phones -is meeting a wall of resistance. The iPhone maker is seeking permission to become the first company allowed to import and sell used phones into the country, its second attempt in as many years.

This time, the stakes are higher and a growing number of industry executives are fighting the move, warning government officials in private that it'll open the floodgates to electronic waste, jeopardize local players, and make a farce of Prime Minister Narendra Modi's Make in India program to encourage local manufacturing.

"Make in India could turn into Dump in India," said Sudhir Hasija, chairman of Karbonn Mobiles, who said it sells about 1.7 million phones a month.

Apple's application in 2015 was rejected by the environment ministry without much fanfare. But things have changed since: India, as the world's second largest mobile population, now represents a vast untapped opportunity for Apple just as China and the US are slowing. Apple has publicly talked up its prospects in India and is on course to get the green light to open its first retail stores.

Sensing the threat, the electronics manufacturing industry's main representative body recently set up a lobbying arm that wrote directly to the government opposing Apple's application.

"Why even consider allowing import of used phones when import of other used goods such as cars are precluded by 300% duty levies?" asked Ravinder Zutshi, chairman of the newly formed Mobile and Communications Council, which issued the letter. The group's members include the largest Indian phone brands: Micromax, Intex and Samsung.

Apple's application has gone to so-called inter-ministerial discussion, said Asha Nangia, a director in the Department of Electronics & Information Technology. That adds a layer of bureaucracy to a process that's far from certain. The government could go either way , though it's encountering far greater local opposition than the first time around. The company declined to comment.

Selling cheaper re-furbished devices can help convert price-sensitive consumers, who previously would have had to fork over a month's earnings or more to own the coveted brand. Apple last month unveiled a smaller iPhone SE that, with a starting price of $399, may still be out of reach of many Indian buyers. Apple now has less than 2% of an Indian market in which many phones cost less than $150.

Still, its sales there jumped 76% in the holiday quarter, indicating that demand for the premium brand is growing. Tim Cook called out the country's "incredibly exciting" prospects during his last earnings conference and said his company will devote more energy to that market.

"All this will neatly tie into Apple's strategy as the smartphone market peaks in the country in the next few years," said Neil Shah, research director for devices and ecosystems at Counterpoint Research."Apple will sell these at far lower price points and bring down entry barriers in India where new iPhones are out of reach of the masses." Apple could target annual iPhone sales of 10 million by 2017, he added.

But rival smartphone makers will have none of it. One of the chief complaints is that allowing Apple to have its way would result in a deluge of used electronics imports, making mince-meat of Modi's localization drive. Global players such as Foxconn Technology Group have begun taking baby steps towards local manufacture, starting with basic assembly. Any easing of curbs on imports could give them pause, Hasija argued.

"Make in India will become a big zero," said Hasija, who's set up four phone assemblies across the country since the program was launched and is building a fifth.

Another criticism focuses on damage to environment. When destroyed, phones produce toxic materials that India isn't equipped to deal with, critics say. Used batteries and LCD screens could worsen the e-waste problem.

Source:Techgig.com