Refurbished iPhones boost Apple’s share of Indian market

Apple has experienced a big boost in demand in India, driven by a surge in refurbished iPhone sales in Asia’s second-biggest economy.

The iPhone accounted for 11 per cent of secondary smartphone sales in India last year, up from 3 per cent in 2021, making it the “fastest-growing refurbished brand in India”, according to data from Counterpoint Research, a market intelligence group.

Apple has pinned its hopes for future growth on India as the US tech giant looks to ramp up its share of the world’s third-largest smartphone market.

Chief executive Tim Cook met with Prime Minister Narendra Modi in April as it opened the company’s first two Apple stores in the country. The iPhone maker is also building up its nascent manufacturing operations in India as it looks to unwind its dependence on China.

Apple’s share of new smartphones in India grew to 5 per cent last year, up from 1 per cent in 2019. Demand has been limited by the luxury price point, as the average sales price of a new iPhone is Rs80,000 or nearly $1,000.

But the brand has experienced unprecedented interest in the secondhand smartphone market, which acts as a gateway into Apple’s network of products and services.

Refurbished iPhones are “selling like hot cakes,” said Glen Cardoza, a Mumbai-based analyst for Counterpoint. The research found that volumes grew by a fifth in 2022, four times the global average.

Devices as old as the iPhone 6, released in 2014, were still finding a third or fourth life in the Indian market, while 5G-equipped models — the iPhone 12 and upwards — were particularly “precious”, added Cardoza.

“Customers who wish to buy an iPhone in the future are the ones who normally buy the secondhand iPhones, just to test them, just to learn how to use them,” said Deven Meher, a sales executive at Mumbai-based Prowesses Enterprises, which sells refurbished and reused Apple products.

In terms of new smartphone sales, Apple is the only major company expected to grow global shipments this year. This is largely down to India, where iPhone shipments are projected to grow by “a massive” 31 per cent in 2023, compared to 2 per cent in China and none in the US, its two biggest markets, according to Counterpoint.

The iPhone’s second-hand popularity is partly due to the device’s sturdiness in comparison to competitors, analysts say. Globally, half of the refurbished smartphone market is captured by Apple.

“Apple is a brand with a much higher resale value,” said Harshit Pandey, Bengaluru-based senior consultant at Redseer Strategy Consultants. An iPhone “passes through three or four hands before it gets obsolete”.

Analysts said the iPhone’s secondary market growth could be significantly higher but supply has been limited by two major factors.

The Android-dominated country currently has a small base of available refurbished iPhones. Meanwhile, Delhi has largely prohibited the import of used phones from abroad since 2012 over concerns it could impact initiatives to support domestic manufacturing. 

Apple, which supports the secondary market because of its sustainability initiatives and because iPhone owners are likely to stay with Apple for the long term, has lobbied against this law over the past decade, according to two people familiar with the effort, but not with any success. Apple declined to comment.

“Apple has an enduring, aspirational appeal among India buyers,” said Prabhu Ram, head of industry intelligence group at CyberMedia Research. “The brand’s salience and loyalty [are] really strong.”

Additional reporting by Andrea Rodrigues in Mumbai