Apple Inc. (NASDAQ:AAPL)’s Application for Second Hand Phones Blocked

Apple Inc. (NASDAQ:AAPL) is now the subject of criticism in India after it emerged it is seeking permits for the sale of second-hand phones. A sale of such phones by the world’s largest smartphone maker is the last thing industry executives want, taking into consideration its potential impact.

Story continues below

Click Here For More Market Exclusive Updates & Analysis

The smartphone maker sought permission for the sale of second-hand phones last year but saw its application turned down. Given that the company is close to opening its first retail stores in the country many fear it could reignite the push for second-hand phones. The electronics manufacturing industry representative’s body has since written to the government asking it to oppose Apple’s application.

Apple Inc. (NASDAQ:AAPL) is hoping to use second-hand phones to crack the Indian marketplace that continues to show great potential. Its market share currently stands at less than 2%. By selling cheaper refurbished phones, the iPhone maker should be able to attract more price-sensitive customers.

Raised Concerns

Many are concerned that such a move could open a floodgate of waste electronics in the country. There are also concerns that such a business could end up hurting local players through competition. Chief complainants also argue that Apple’s push goes against the government’s calls for more local manufacturing.

Sale of second-hand phones is also seen as a potential threat to the environment. Whenever phones are destroyed, they usually produce toxic materials which some argue India is not ready to deal with. Mountains of used batteries and LCD screens could further worsen the electronic waste problem the country is grappling with.

“The millions of imported used phones will need their batteries replaced. What will happen to those batteries, where will they go?” said Sunil Vachani, chairman of Dixon Technologies. The same question, however, can be asked of new phones as well.

Four-fifths of the phones sold in India cost less than $150. Apple has struggled to meet the price tag even with the unveiling of its more affordable iPhone SE. Even though the company’s products are considered high-end, sales in the holiday quarter were up by 76%. It is momentum Apple hopes to maintain through the sale of affordable phones in the country.

An ad to help with our costs