uploads///

Will the New Tax Reform in India Drive Apple’s Sales?

By

Jul. 24 2017, Updated 9:36 a.m. ET

Apple product prices fall up to 7.5% after introduction of GST in India

On July 1, 2017, India (INDA) introduced a GST (goods and services tax) reform. This reform led to a fall in Apple’s (AAPL) iPhone, MacBook, and iPad prices across the country. The iPhone SE now costs 4% less at $402 or 26,000 Indian rupees. The iPhone 7 now costs 6.5% less at $867, compared to its earlier price of $926.

Apple’s 32 GB (gigabyte) 9.7-inch iPad now costs $432, compared to its earlier cost of $446, and the price of the 128 GB model has fallen to $551 from $570. The 21.5-inch iMac costs $1,392, compared to its earlier price of $1,403. The Apple Watch Series 1 is now priced at $353, down from $369.

Smartphones in India now attract a GST tax of 12%, compared to the earlier tax of 13.5%. However, these tax reforms will drive the prices of peer companies such as Samsung (SSNLF), Lenovo (LNVGY), Fitbit (FIT), and The Hewlett-Packard Company (HPQ) down as well.

Article continues below advertisement

iPhone accounts for 3% of the Indian Smartphone market

According to market research company IDC (International Data Corporation), Samsung dominated the Smartphone market in India with a share of 28.1% at the end of 1Q17. Other top players include Xiaomi, Vivo, Lenovo, and OPPO Electronics with shares of 14.2%, 10.5%, 9.5%, and 9.3%, respectively. Apple has a market share of ~3% in India.

According to analysts, over 75% of Smartphones sold in India have an average selling price (or ASP) of less than $250, and only 5% of Smartphones are priced over $500. However, IDC stated that the ASP in India improved from $131 in 1Q16 to $155 in 1Q17. As the iPhone’s ASP is over $600, it’ll still be difficult for Apple to penetrate the Indian market over the next few quarters.

Advertisement

More From Market Realist

  • CONNECT with Market Realist
  • Link to Facebook
  • Link to Twitter
  • Link to Instagram
  • Link to Email Subscribe
Market RealistLogo
Do Not Sell My Personal Information

© Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.