Apple Cuts Iphone X Retailer Margin
Apple Cuts Iphone X Retailer Margin

Apple has reduced retail margins on the iPhone X by nearly 30%, frustrating large format chain owners and small-scale retailers that are crying foul that the Cupertino-based company does not want its retail partners to benefit while the company itself profits from the massive margins it makes.

Some like Bengaluru-based Sangeetha Mobiles have stopped taking orders of the new flagship, even as the costliest iPhone ever faces a huge supply-demand mismatch in India, causing analysts to say that Apple should slot India far higher in its priority list and bring in larger shipments of the iPhone X.

Subhash Chandra, managing director at Sangeetha Mobiles, which has 400 stores across the country said “Apple has cut margins on the iPhone X from 6.5% to 4.5% for large retailers like us, and if a customer pays by card, which is usually the case, the margin reduces to almost 1.5-2%. Apple gives the least margins… How on earth do they expect the retailer to work for them for free our overheads are anywhere around 10%.

Apple declined to comment on the margin cuts and supply issues in India. Industry insiders reveal that typically, brands such as Samsung or Xiaomi offer more than double the margin that Apple offers, around 12-15%. To gain share from competition, players like Oppo and Vivo were also giving higher than usual margins to retailers, but Apple has refrained from this practice.

Offline retailers complain that while they are facing the issue of margin cuts, online players are giving cashbacks and other discounts on iPhones, including the iPhone X, distorting a level playing field.

Analysts said Apple should bring India, the world’s second largest handset market after China by volume, further up on its priority list urgently and ensure adequate supply, else it may be left with too wide a gap to bridge with its rival Android players.

 
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