Apple drops plans to import and sell refurbished iPhones in India

Apple has junked its plans to sell pre-owned certified or refurbished iPhones in India as the government has not relented towards allowing imports and sales of such devices under the existing environment policy, said two people aware of the development.

“Refurbished story is over, it is no longer part of the India roadmap,” a senior executive aware of the iPhone maker’s plans said, on the condition of not being named. He added that the Cupertino-headquartered company was taking the organic route to increase market share by pursuing local manufacturing which was picking up in India.

Apple had been in talks with the government over the past few years seeking permissions to import and sell second hand iPhones which it called ‘pre-owned and certified’ for selling to customers at a time when it was struggling to expand its market share in a highly competitive and price sensitive Indian smartphone market.

However, it had not received a favourable view since the government rules and regulations under the ministry of environment did not have such provisions, and enabling it would have meant opening doors for not just Apple but all players leading to potential dumping of used phones into India leading to e-waste.

“The plan has been dropped, there’s no intention of taking it forward here,” a second person said, asking not to be named.

Queries to Apple India spokesperson did not elicit a response as of Thursday evening.

“Apple was aiming to expand its market share with refurbished phones as once a smartphone user begins using a pre-owned iPhone, it greatly increased the likelihood of the user upgrading to another iPhone, be it refurbished or a new one. It was a strategy that could have helped it lock users into its ecosystem,” said Navkendar Singh, associate vice-president for devices research at IDC India, South Asia & ANZ.

He added that while Apple would have gained additional revenues from services on top of device sales in refurbished phones, it would have been in direct confrontation with the government’s Make in India plans.

Apple currently makes 60% of its 4.8 million iPhones that are sold in India through large global contract manufacturers Foxconn and Pegatron that are ramping up capacities. Experts note that the tech giant was creating alternative production lines to China where it has mammoth operations catering to global markets.

Apple may have a small share of the overall smartphone market, but it’s No 2 in the ₹30,000 and above segment, closely trailing Samsung as of June 2022. It leads the above ₹45,000 price segment, considered as ultra-premium, according to Counterpoint Research data as of June-end. New iPhones with a higher average selling price of $700 or more are out of reach for the mass consumer segment, and owing to the aspirational value attached it has a disproportionately high share in the second-hand market, as per a report from IDC.

“Apple has been among the top two brands in volumes on Cashify’s platform and its share of the refurbished market has only grown since the past two-three years. By value, iPhones are the best sellers on our platform,“ said Nakul Kumar, co-founder of India’s largest refurbished phone seller Cashify.

Apple’s iPhone 7 formed the primary buyback model for Apple buybacks, with 23% share in 2021, even as 16% of all phones bought back by Cashify were iPhones.