The discounts that people have come to expect when buying iPhones from sites like Amazon India, Flipkart and Snapdeal may soon come to an end. Currently, fewer people are buying Apple's phones from brick-and-mortar stores where they cost more. But Apple's new Indian head Michel Coulomb plans to do away with these discounts, according to an Economic Times report.
According to the report, Apple has increased margins for exclusive Apple franchise stores in India to 5.7 per cent from 4.5 per cent. The iPhone maker's offline stores in India are due to open in 2020-2021.
The company has already started making efforts to tame online discounts. Apple India halved distributor margins to 1.7-2.5 per cent and gave distributors specific areas of responsibility to protect those margins, says the report. This stopped them from selling their stock to any trade partner.
Online sales account for slightly over half of iPhone sales in India, according to the report.
Coulomb took over as Apple's lead sales executive in India last month, replacing Sanjay Kaul.
"Coloumb is known for systems and processes and wants to bring discipline into the company's sales operation," a senior industry executive told the paper.
Speaking on the company's new sales strategy for India, the industry executive said, "The strategy is to increase sales from Apple brand stores in the country and stop indiscriminate online discounting which distorts brand image."
According to another industry executive cited in the report, Apple will not directly control prices because it's against their policy. The source also said the company might bring in another distributor in India.
Apple may also rope in another distributor in India. Currently, Apple has five distributors in India - Ingram Micro, Redington, Rashi Peripherals, Brightstar and HCL Infosystems.