It's being reported in India that Apple is now offering record margins to retailers and resellers for its flagship iPhone 5S as it looks to hit the 1 million mark for its smartphones in India in the year ending September, trying to buck the overall slump in expensive handsets that has seen prices being slashed by rival Samsung.
Passed on as trade subsidy by Apple, the new margins amount to 13-15% versus the traditional 6-10%. Retailers may pass on some part of this to buyers to bolster demand as sales of high end smartphones dropped for the first time ever in India this year.
"There is huge pressure from Apple's Cupertino headquarters on distributors to sell iPhones to trade and reach the 1 million sales mark in India," said a senior executive with a leading trade partner of Apple. "This unprecedented margin is offered to retailers who are ordering more than the usual, such as online sellers and large stores," he said.
The Indian report interestingly noted that while Samsung is the smartphone market leader in India with 39.5 per cent volume share as per CMR India data for January-May, the fact remains that it's Apple that is way ahead of Samsung in the premium smartphone market with a 55.3% share against Samsung's 24.2% share. That's outgunning Samsung by more than 2 to 1.
Apple's CEO Tim Cook noted during a financial Conference Call in April that their sales in India were up over 55% for the year.