
Apple's plan to sell used iPhones in India officially gets rejected - JumpCrisscross
http://www.cnet.com/news/apples-plan-to-sell-used-iphones-in-india-officially-gets-rejected/
======
seanmccann
This really was a great plan and I hope Apple can make it work.

With the iPhone Upgrade Program, Americans can finance a new unlocked phone
with 0% interest, reducing the cell carrier lock-in. After 12 months, you can
exchange your old phone for a new one.

Now, Apple has millions of 12 month old, last gen phones. India requires 30%
of products sold to be sourced in India, so Apple planned to refurbish these
used iPhones in India and then sell them in market.

It really was a great way to get Americans to upgrade more often, reduce the
power of American cell companies, and provide an affordable product to an
emerging market.

Apparently refurbishing the phones in India isn't enough to satisfy the 30%
rule.

~~~
iamcreasy
> It really was a great way to get Americans to upgrade more often

I cringe in fear when I read this line. The voracious appetite and the
unwavering focus on economic growth is hurting the entire world. Isn't it a
time to step back and rethink our long term strategy as one species?

 _I routinely board very large airplanes without having the vaguest idea of
how they work or how to fly them - I 'm a passenger, and happy to ride along.
I take buses, and taxis, and ride shotgun when others drive, without sweating
it. But put me behind the wheels of the car, and I suddenly need to know a
whole lot more. Manual or automatic? Mirros adjusted right? Where is the knob
for the headlights? Emergency break, just in case? Where I buy a new car, I
actually do skim over the manual.

...

A reporter called recently and asked how long it would take Earth to "forget"
humanity if we suddenly disappeared. In some sense, we are now unforgettable -
the human-caused plant and animal extinctions have emptied biological "jobs"
and that will be filled over many millions of years by creatures who will owe
their existence to use wiping out the competition. We have pumped oil and gas
out of the ground that had been there for hundreds of millions of years,
through holes that may not be eroded away for additional hundreds of millions
of years. The human "layer" of plastic and aluminum foil and heavy metals may
be recognizable in sedimentary piles hundreds of millions of years from now.

...

With the among of stuff we use, and the amount of the world we occupy, we are
no longer passengers napping in the back seat of the car. We are everywhere,
and changing everything. Hence many environmental scientists are now involved
in figuring out what we are doing, how to operate a remarkably complex and
involved Earth system, and how to make the ride as enjoyable as possible.

I'm concerned that a lot of people, including some of those whow are making
laws, still think that they are sitting in the back of the car, looking our
the window and enjoying the ride.

\- 'Earth - The Operators' Manual' By Richard B. Alley_

------
sremani
To understand the insanity behind the Economic Policies of India, I recommend
people to read "The turn of the tortoise" by T.N.Ninan. An eye opening and
honest view from financial/economic point of view.

Some salient points are,

\- Indian Government acts paternalistic (at times with good intentions) but
becomes parasitical in practice.

\- Indian corruption is rent-seeking unlike some high growth nations where
corruption is more like profit sharing

\- India is a Center-Left country, with Fabian Socialism as the default
political mindset, so Price controls and market control is the favorite
practice of protectionism and fountainhead of black and gray markets.

I strongly recommend, whether you are Indian or interested in India.

~~~
piyushpr134
India is a huge market for mobile phones. There are 400 mn+ smartphone users
here. 1\. Why should the government allow someone to come and sell old phones
? 2\. These phones would have lesser shelf life and once they become bricks,
India would need infrastructure to recycle these. In absence of this infra, it
may lead to more pollution. 3\. Why doesn't APPL reduces price of their mobile
phones to bring it to the level where it can compete with other players ?
Samsung, Lenovo, HTC, Xiomi etc are doing very well here. They price phones
competitively and some even make phones here. They do not need to sell
refurbished phones. Their phones are better spec'd and have more relevant
features compared to iphone.

Tim cook, on his recent visit to India, admitted that iphone is indeed
mispriced in India. In my view this is very good decision by the government.
You must understand more about the topic at hand than putting that passive
aggresive comment here

~~~
tim333
>1\. Why should the government allow someone to come and sell old phones ?

For the reason that pretty much all other countries allow it - that it
benefits the buyer and seller?

~~~
ksk
> that it benefits the buyer and seller?

You would have to prove that assertion. Or at-least make a case beyond the
superficial level.

Like the parent poster said, India doesn't want to turn itself into a e-waste
dump for the world. Such a situation would be bad for its citizens as the
older phones need to be recycled/processed.

------
brianbreslin
All foreign retailers run into this problem entering India. Ikea has been
building factories so they can start sourcing from India in order to comply.
Moving their production out of Pakistan and Bangladesh into India in order to
comply to tackle the bigger market. Foreign owned businesses need to stock 30%
or more of products sourced from India.

~~~
Spivak
The fact that companies are choosing to comply rather than simply not do
business in India seems to mean that their policy is a huge success.

~~~
brador
The policy is great for Indians and the companies involved. Jobs mean money to
spend and a thriving economy.

The same policy implemented here would be great to rebuild our crumbling
economy and get money flowing.

~~~
otterley
Hardly any economists -- who are trained in analyzing these proposals -- agree
with this sentiment.

There are significant second-order effects of protectionism that are harmful
yet not well understood by politicians or voters: retribution by other trading
partners, increased prices and inflation are but a few.

~~~
brador
It's working great for India and Brazil. Jobs, happy people, money flow.

~~~
bitserf
Ask people from Brasil how much they enjoy the high prices they pay for
consumer electronics some time.

------
Negative1
This is really horrible news for Apple. According to this article [1], their
sales volume fell from 55% to 37% in India in the first 1/4\. Meanwhile,
Samsung goes from 35% to 62%.

Selling used iPhones there would have allowed them to dramatically increase
sale volume in the low-end market which could have helped them regain some
ground.

[1]: [http://www.thehindu.com/sci-
tech/technology/gadgets/samsung-...](http://www.thehindu.com/sci-
tech/technology/gadgets/samsung-galaxy-s7-edge-review/article8671596.ece)

------
noarchy
Is there some kind of law in India against selling used phones? Or was this an
arbitrary decision by the commerce and industry ministry? I guess I don't see
what the big deal is (and the article isn't clear to me).

~~~
cdumler
India has a law that a seller must source at least 30% of a product from
intra-India businesses in order to do business in India.

In my opinion, this is a very intelligent law. It's goal is to induce industry
in India and limit (predatory/highly desired) products that remove wealth from
the country, a country that needs desperately work for it's people.

~~~
throwaway420
What's a predatory product? That seems silly to me: people only buy something
when they value what they get more than what they give up to get it. And how
does it remove wealth from a country? Allowing people to satisfy their desires
in the most direct way possible doesn't seem in conflict with the goal of
creating wealth, so I'm honestly finding it hard to understand your reasoning
here.

I would argue that any form of trade protectionism is not intelligent: it's
very short-sighted and sacrifices actual wealth for employment. It's the type
of thing that sounded and felt good to me only before I actually tried to
learn a bit of economics.

Think of it in terms of a small town that passed a law banning any form of
trade between residents. Technically, 100% of people would be employed. They
would be employed knitting their own sweaters, milking their own cows, growing
their own grain, cooking their own food, gathering their own building
materials, pumping their own water, etc. So life would be paradise with 100%
employment right? Without trade, people would be on the edge of starvation and
extreme poverty constantly. Scale up that analogy to put the residents of that
small town as countries, and you can see where protectionist policies protect
jobs at the expense of actual prosperity. North Korea is an imperfect extreme
example, but you can easily see what effects limiting trade has on prosperity.

If I was a politician, I'd love to pass all kind of trade policies like this
because most people haven't really studied economics so it's easy to spin up
your consolidation of power as protecting jobs.

~~~
Spivak
I'm not going to argue the whether protectionism is a good thing in general
but a predatory doesn't mean that it's not worth it to the buyer, but that the
profits of the sale leave the country.

As an extreme example, if your country exports nothing but you have citizens
buying goods from other countries then over time the country is going to
become poorer and poorer as the capital flows out of the country.

Free trade is good for regions with industry and when workers have the means
to relocate to areas with employment. Until our immigration policy is
indistinguishable from 'we're all basically one country' then trade
protections are going to sometimes be a country's best option.

~~~
gwright
This is way to simplistic of an argument. In particular you are ignoring the
affect of currency exchange rates as it relates to foreign trade.

------
JustSomeNobody
The article wasn't clear. Does this prevent Apple from selling used
(refurbished) iPhone _period_ or can they sell them if they also sell new
ones?

~~~
iclelland
The original article is a bit better:

[http://www.livemint.com/Companies/lDn53REhqvhqGoIxs9MgwJ/App...](http://www.livemint.com/Companies/lDn53REhqvhqGoIxs9MgwJ/Apples-
proposal-to-sell-refurbished-iPhones-in-India-reject.html)

Apple isn't actually prevented from selling either new or refurbished iPhones
in India. What it appears that they cannot do, though, is open any Apple
Stores there, because they don't (or can't) comply with a rule that "at least
30 per cent of the value of procurement of manufactured/processed products
shall be sourced from Indian small industries" (from a similar story about
Walmart: [http://www.thehindu.com/business/Industry/30-local-
sourcing-...](http://www.thehindu.com/business/Industry/30-local-sourcing-
norm-cant-be-met-walmart/article4945700.ece))

It looks like what they wanted to do was to manufacture the original phones in
China, as always, but do the _refurbishment_ in India, and thereby call the
refurbished phones "locally sourced". If they could do that, then they could
run their own stores in the country, assuming that the refurb phones made up
30% of their product.

The Indian government rejected _that_ idea, so I presume that Apple will need
to continue selling through third-party retail stores, or come up with another
way to comply with the rule.

~~~
snambi
If apple is serious, why don't they build a factory and make phones in india?
When Ford, Hyndai, GM, Toyota can manufacture in India, why not apple?

~~~
wmil
Because opening Apple stores in India isn't worth changing their whole
production and supply chain.

Ford, Hyndai, GM, Toyota are all car companies. They're used to dealing with
local production requirements.

------
piyushpr134
Agreeing to all the whims and fancies of western companies is something
governments should never do. In my view free market is propaganda by these
companies to make these kinds of restrictions feel dirty. Before you attack
me, hear me out.

China has many such restrictions on many such products. China blocked out
internet and internet companies, which resulted in home grown products
emerging and becoming really successful (alibaba, tencent, baidu, didi etc).
Indian government did not put any such restriction on virtual products. This
has resulted in Google, facebook and microsoft having literal monopoly on the
market. There are some restrictions for companies like Amazon and Uber. This
has resulted in a healthy local competition and ecosystem to develop and
compete with international competition like Uber and Amazon. In the end, some
of these local companies won't survive independently and got bought by
international players. This, in my view, is a much better outcome as this
makes international players to entrench heavily and invest in the local
market.

Lets look at telecom, banks and airlines. Govt discouraged entry of foreign
players into Indian markets by making rules of entry tighter. This has
resulted in companies like Airtel, Idea, Reliance and Tata to become strong
players in telecom. Believe me, Indian telecom sector has lowest tariff in the
world and has really huge reach with more than 850mn subscribers. These
companies have innovated and made sure that global competition did not kill
them. Sure some companies got bought by likes of Vodafone. However, companies
like Airtel managed to go global.

In banks, none of the foreign players have managed to pickup any significant
market share in view of healthy competition by private Indian banks like HDFC
and ICICI. In airlines, again, government disallowed foreign players. They
have to be content with buying large chunks of really successful Indian
homegrown players.

Lets look at mobile phone market. Indian government did not put a barrier for
phones to be imported. They just blocked second hand phones by slapping a
large anti dumping duty. This has resulted in virtually zero production of
these mobile phones. With more than 400 mn smartphone users, who lost by
letting big smartphone makers to import ? No Indian homegrown industry, no
ecosystem. All they managed to do is to make sure all these phones where new
and not refurbished.

I strongly believe that big countries like India, should have some sort of
protectionism in the infancy stage of an industry. When you have strong local
competition, only then these markets should be opened up for global
competition. If the local competition that has managed to sprout is capable it
will ward off global competition and establish a healthy equilibria. If not,
global competition would rule the market and that should be fine. Point being,
give local ecosystem a chance. By letting Apple sell second hand phones, India
would open itself up to be dumping ground of the world. Soon enough all end of
life phones would end up in India masquerading as refubrished.

------
sjg007
Sell a $300 charger bundled built in Indian with a free iPhone?

~~~
nfriedly
The 30% is by components, not price, so that would have to be a ridiculously
complex charger...

------
legohead
Should Apple make a much cheaper version of the iPhone?

------
ap46
Yeah! Lets just keep on manufacturing in an unsustainable manner.

These aren't you cars, these are chips which could'nt care or show effect of
being n-handed.

~~~
forgottenpass
They're not saying Apple can't sell used phones or that Indians can't buy and
use used phones.

All that's happening is that Apple can't classify their refurbished phones
into a regulatory category they would like to classify them as.

The fact this "news" source made that misinterpretation possible in the first
place means they knew the story was boring. So they made it vague in a way
that you wound assume the wrong thing.

------
anf
What could possibly be the reasoning behind this?

~~~
gdulli
If you don't want to read further than the headline then don't read further
than the headline. But you seem curious to know more so maybe you should read
further than the headline.

~~~
anf
Huh? Which part are you referring to? At least overtly, there is only "we are
not in favor of used phones". Why not?

Edit: looks like iclelland explained it
[https://news.ycombinator.com/item?id=11822713](https://news.ycombinator.com/item?id=11822713)

------
snambi
Apple iphones are overpriced. There is nothing technologically awesome about
iPhone, except the high prices.

~~~
gwright
They are overpriced for _you_.

There is no single 'correct' price for anything because everybody values
things differently.

~~~
ksk
Yes, but not having a single correct price doesn't mean that something can't
be considered overpriced. A bottle of water sold at 2.5 million dollars would
probably be considered overpriced by most people.

