Money & Business

India Smartphone Makers Band Together to Support Local Products

By / Apr 5, 2016 Smartphones by Intex and Micromax, two local manufacturers based in India.

Efforts by Apple to expand its iPhone foothold in India, particularly by introducing used phones to the market, have been met with resistance within the country, where a consumer electronics group recently launched a lobbying arm to support locally produced products.

Apple is eager to jump into the smartphone market in India. There’s a problem, though: India’s local smartphone makers don’t want Apple there.

Last month, the country’s Consumer Electronics and Appliances Manufacturers Association (CEAMA) launched a new Mobile and Communications Council, a lobbying arm that will focus on issues in the mobile sector. The biggest issue so far? A little company out of Cupertino, California.

The council is concerned about Apple’s plan to sell used smartphones in the Indian market, which, the council warns, will compete with the local industry and create problems such as electronic waste. In a statement to The Times of India, CEAMA President Manish Sharma noted that the council is looking in the opposite direction: It wants to see smartphones made locally, following the country’s recent Make in India campaign.

“We believe the new Mobile and Communication Council will appropriately connect and be able to propagate the recommendations of industry players to government and policy makers to ensure that majority of components be made domestically,” Sharma, a member of Panasonic’s executive team, said.

Apple, which currently has less than 2 percent of the smartphone market in India, according to Bloomberg, sees the country as a potential growth market. But one factor limiting Apple’s reach is price: Many of the most popular phones in the market cost less then $150, and some sell for as little as $35. In comparison, a 16-gigabyte Apple iPhone 5S, a model recently discontinued in the U.S., is currently being sold for Rs. 19,999 (roughly $300) by the Indian online retailer Flipkart—a price that leaves the phone out of reach for its target audience. (A high-end iPhone 6S Plus, meanwhile, currently sells for the equivalent of $1,200.)

Apple can’t produce lower-end models of its phones without damaging its premium brand status, but selling used phones could be an effective alternative.

Ravinder Zutshi, the chairman of the Mobile and Communications Council, sees things differently, however. He says that, even if Apple is allowed to sell used phones in India, the phones should face the same fees as other used products, to avoid hurting local phone makers.

“Why even consider allowing import of used phones when import of other used goods such as cars are precluded by 300 percent duty levies?” Zutshi recently told Bloomberg.

He doubled down on his point in comments to The Economic Times, arguing that the move doesn’t make business sense, considering recent political trends.

“When the government is creating Make in India to reduce imports, and a lot of mobile manufacturers are coming to the country, how can we have imports of refurbished phones by any brand, not just Apple?” Zutshi said.

The CEAMA council includes local Android manufacturers like Micromax and Intex, but it also includes a familiar face in Apple’s competitive battles—Samsung, which has a local manufacturing arm that produces goods specifically for the Indian market.

Ernie Smith

Ernie Smith is the social media journalist for Associations Now, a former newspaper guy, and a man who is dangerous when armed with a good pun. More »

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