Apple upsets cart with cut in online iPhone 5S price
Just ahead of the launch of the next iPhone, Apple is offering a price cut on its outgoing flagship device. It has tied up with online retailers Amazon, Flipkart and Snapdeal to offer discounts on the iPhone 5S in a move that's sharply contrarian to the strategy of brands such as Samsung launch.
This, combined with the usual discounting by e-commerce sites, has made the 5S about Rs 8,000 cheaper online than in brick-and-mortar stores.That's probably the widest price gap currently for any smartphone or electronic gadget, according to three of Apple's top trade partners. The 16GB iPhone 5S is available online at Rs 38,000-39,000 while it costs Rs 46,000-47,000 in stores.
The idea is to clear out stocks of the 5S, which will get a substantial downward price revision when the new flagship iPhone model is launched, trade sources said. It's a strategy Apple routinely adopts in the US and Europe.
Apple has scheduled a global event on September 9 in Silicon Valley that's widely expected to be the unveiling of a new largescreen iPhone and smartwatch concept. Emails sent to Apple, Amazon, Flipkart and Snapdeal did not elicit any response as of press time. "
Apple's sudden focus on e-commerce sites has become a nightmare for us," said the chief executive officer of a leading cellphone retail chain, requesting anonymity. "We have even told them that if the situation continues, we may stop picking up stocks of iPhones since our sales have suddenly taken a hit."
While big retail chains have taken up the issue with Apple and have threatened to stop stocking its products, some have negotiated special consumer offers on the 5S, such as a free case with each purchase. Apple follows a uniform pricing strategy around the world, hence it cannot reduce prices across all sales channels in the market.
A top trade executive said Apple's strategy was in stark contrast with what other consumer electronics and smartphone makers are currently trying to achieve — a level— playing field between offline and online trade. "We have to see whether Apple is doing this discounting as a regular phenomenon before taking a decision on the way ahead," the person said.
Explaining the large online-offline gap, another of the company's trade partners said, "Apple is offering 3-4% extra margin to ecommerce to be passed on to consumers as discount, apart from usual schemes such as 1-2% more margin if sales target is reached.The e-commerce firms are further doing their own discounting which has made the price difference this wide."
Apple offers an 812% retail margin on iPhones, according to those in the trade. As per estimates, modern retail and the exclusive Apple stores contribute around 20% each to iPhone sales in India, while ecommerce and general trade accounts for the remaining 60%.
Just ahead of the launch of the next iPhone, Apple is offering a price cut on its outgoing flagship device. It has tied up with online retailers Amazon, Flipkart and Snapdeal to offer discounts on the iPhone 5S in a move that's sharply contrarian to the strategy of brands such as Samsung launch.
This, combined with the usual discounting by e-commerce sites, has made the 5S about Rs 8,000 cheaper online than in brick-and-mortar stores.That's probably the widest price gap currently for any smartphone or electronic gadget, according to three of Apple's top trade partners. The 16GB iPhone 5S is available online at Rs 38,000-39,000 while it costs Rs 46,000-47,000 in stores.
The idea is to clear out stocks of the 5S, which will get a substantial downward price revision when the new flagship iPhone model is launched, trade sources said. It's a strategy Apple routinely adopts in the US and Europe.
Apple has scheduled a global event on September 9 in Silicon Valley that's widely expected to be the unveiling of a new largescreen iPhone and smartwatch concept. Emails sent to Apple, Amazon, Flipkart and Snapdeal did not elicit any response as of press time. "
Apple's sudden focus on e-commerce sites has become a nightmare for us," said the chief executive officer of a leading cellphone retail chain, requesting anonymity. "We have even told them that if the situation continues, we may stop picking up stocks of iPhones since our sales have suddenly taken a hit."
While big retail chains have taken up the issue with Apple and have threatened to stop stocking its products, some have negotiated special consumer offers on the 5S, such as a free case with each purchase. Apple follows a uniform pricing strategy around the world, hence it cannot reduce prices across all sales channels in the market.
A top trade executive said Apple's strategy was in stark contrast with what other consumer electronics and smartphone makers are currently trying to achieve — a level— playing field between offline and online trade. "We have to see whether Apple is doing this discounting as a regular phenomenon before taking a decision on the way ahead," the person said.
Explaining the large online-offline gap, another of the company's trade partners said, "Apple is offering 3-4% extra margin to ecommerce to be passed on to consumers as discount, apart from usual schemes such as 1-2% more margin if sales target is reached.The e-commerce firms are further doing their own discounting which has made the price difference this wide."
Apple offers an 812% retail margin on iPhones, according to those in the trade. As per estimates, modern retail and the exclusive Apple stores contribute around 20% each to iPhone sales in India, while ecommerce and general trade accounts for the remaining 60%.
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