Will This New Tax Stifle Apple’s India Market Ambitions?
Apple (NASDAQ:AAPL) and other smartphone makers might have to revise forecasted sales figures in India after Indian Finance Minister Palaniappan Chidambaram announced the implementation of a 6 percent tax increase on mobile devices that cost more than $37. The previous tax amount was 1 percent. The new import tax will primarily affect high-end smartphone makers like Apple, Samsung (005930.KS), Nokia (NYSE:NOK), and BlackBerry (NASDAQ:BBRY).
This news comes at a bad time for Apple as it has just opened an iTunes Store in India last December, and it looks to gain a foothold in the lucrative Indian market with discounted older-generation devices like the iPhone 4.
According to StatCounter, Apple only accounted for 1.13 percent of the total mobile internet usage in India in February. However, despite having a relatively small slice of the Indian mobile phone market; Apple has seen sales of its mobile devices in India jump 300 to 400 percent in the last three months, according to market researcher IDC, via The Economic Times.