Apple warns Indian retailers: Heavy fines for activating iPhones with foreign SIMs
Apple's distributors have warned Indian retailers of heavy penalties if newly sold iPhones, especially the iPhone 17 series, are activated with foreign SIMs within 90 days. Severe shortages have emerged as large volumes of iPhone 17 units are diverted to grey markets overseas.
New Delhi: Distributors of Apple in India have given serious warnings to mobile retailers, warning them not to activate iPhones of the new series, in particular the iPhone 17, with a foreign SIM card within a span of 90 days of purchase. According to MoneyControl, stores that are discovered to have breached the rule may end up paying heavy fines and even have a block imposed on their store codes. The relocation is timed amidst the fact that iPhone 17 units are almost going off shelves, with huge amounts being channelled to international markets where the margins are much higher.
The grey market diversion is a big issue that has plagued the industry; according to industry insiders, 3-5 per cent of all iPhone exports can be attributed to non-official shipments. Almost one-half of these are allegedly sold to Russia, where Apple is no longer functioning after the conflict in Ukraine. iPhones being exported by India reached as high as $1.6 billion in October, a third of the total smartphone exports. The rising leakage has caused extreme domestic demand, especially of the 256GB and 512GB models.
Grey market surge drains local supply
Retailers attribute the high demand in markets in Russia, Africa and the Middle East to forces that have made the export prices above the MRP of India. According to sources in Moneycontrol, the export buyers usually package accessories with a value of Rs 4000 to Rs 5000, and the trade is even more profitable. Consequently, Apple has allegedly cut bank cashback deals on the iPhone 17 series from Rs 6,000 to a mere Rs 1,000 beginning November 22, attributed to supply pressure.
Retailers say Apple’s policy is unfair
Some Indian retailers have defied the foreign SIM activation requirement, labelling it as discriminatory. They state that all channels are impacted by the problem, such as the online or large-format stores, but only the mainline retailers are punished. The All India Mobile Retailers Association says that millions of phones are being sold every month at the expense of fiscal gains that should reach the Indian consumer and result in losses through cashback offers and GST disadvantages.
The most recent earnings call by Apple CEO Tim Cook recognised the supply issues, saying that a variety of iPhone 16 and 17 models were in short supply due to high demand. The supply situation is anticipated to stabilise in December, with a slight salvage to the retailers who have been faced with a constrained supply.