Apple’s Tim Cook’s agenda with PM Modi is to allow refurbished iPhones in India: report

When Apple CEO Tim Cook meets Prime Minister Narendra Modi, he is likely to make the right noises about manufacturing iPhones locally but the single point agenda is likely be to make India a ‘graveyard’ for used iPhones and flood the country with its refurbished smartphones.

“On the certified pre-owned issue in particular, if you think about automobiles – brands like Lexus and Mercedes have been selling certified pre-owned cars. We have this programme in the US and in most parts of the world. When they are sold they are sold with warranty, just like a new product. We would never sell a product that we didn’t think was right. We think it is good for people,” Apple CEO Tim Cook told the BusinessLine newspaper in an interview. “It’s not the only solution but one part of puzzle. We would like to offer it and we hope we are able to articulate that clearly and we hope we can get an agreement.”

Apple’s iPhones, which are priced over Rs 20,000, have less than 2% market share in India, where over 100 million smartphones were sold in 2015. The bulk of smartphones sold in India run on the Android OS from Google, Apple’s global rival, at price points of less than Rs 10,000.

Apple hopes that by bringing refurbished iPhones in India, it can bring down the cost of the phones to around Rs 10,000, helping it compete in the mass market segment.

The Indian government, which is pushing the Make in India initiative, compelling global manufacturers to produce phones locally, has already rejected twice Apple’s application to sell refurbished smartphones in the country.

However, Cook has clearly indicated that it would be making phones locally over in the next few years. ” It (manufacturing) is something we will look over time.” he said.

Phone makers in India have already raised a red flag to Apple’s move, which they say would use the country as a dumping ground for electronic waste and undermine the government’s Make in India programmes. There is also the fear that Apple would dump used iPhones at price points lower than what other phone companies spend on making new smartphones.

Apple desperately needs to a market for its refurbished phones as sales growth for new iPhones in its traditional markets such as US and China have stalled. An upgrade programme that Apple launched globally last year allows users to go for new phones every year despite them being locked into a two year contract with telecom carriers.