Low supply of Apple iPhone X units and reduced retail margins have irked offline retailers in India: Report

Update: Updated with Apple's response

Owing to low retail margin rates offered by Apple as well as low numbers in the supply of iPhone X units, offline retailers in India are reportedly irked with Apple. So much so, that some are considering to pull down the pricey iPhone X off store shelves.

iPhone X. Image: tech2/Rehan Hooda

iPhone X. Image: tech2/Rehan Hooda

According to a report by The Economic Times, the Cupertino-based iPhone maker, has reduced the retail margin by 30 percent. The retail margin which used to be 6.5 percent has come down to 4.5 percent.

Adding to the retailer's woes, is the mode of payment when it comes to buying the iPhone X. Since many opt for credit cards or debit cards to pay for the smartphone, it decreases their share of profits from the retail margin. Moreover, the fact that there is a low supply of Apple iPhone X units, means retailers lose a chunk of their customers.

The demand for the iPhone X is such that people are ready to pay a premium for the phone.

Speaking of losing customers, online retail stores like Flipkart and Amazon with their attractive offers which included a buyback offer from Reliance Jio, leads to a decrease in the number of customers entering physical stores.

According to ET, a retailer was supposed to receive 400 units of iPhone X after three weeks of launch, however, he received far less than expected.

In contrast to this, Chinese smartphone maker, Xiaomi and Korean smartphone giant Samsung pay twice the retail amount Apple offers. Some retailers have reportedly, refused to stock units of the tenth anniversary iPhone altogether.

Previous reports had forecasted that a low supply of iPhone X units would be noticed after 3 November. While these were some well-calculated estimations, things have indeed turned out be this way after the launch.

Adding to the damage, a report has suggested that Apple's manufacturing company Foxconn has hired thousands of interns to help in the assembling of iPhone X units in China to meet the soaring demand. Moreover, these interns are said to be working overtime to meet customer demands for Apple's iPhone X.

Apple in an official statement has said, "Apple is dedicated to ensuring everyone in our supply chain is treated with the dignity and respect they deserve." The company has also observed that the students should not have been working overtime.

The iPhone X which was released in India in the first wave along with the rest of the world, the first time that's happened for any iPhone, on 3 November saw plenty of excitement from customers. Such was the demand that iPhone X went out of stock within 15 minutes at online stores.

The iPhone X comes in 64 GB and 128 GB variants and costs Rs 89,000 and Rs 1,02,000 respectively.

Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.


Published Date: Nov 22, 2017 07:11 pm | Updated Date: Nov 23, 2017 12:34 pm