Apple's growth strategy just hit a major roadblock

Modi timMinistry of External Affairs, IndiaApple CEO Tim Cook meets Indian PM Narendra Modi.

The Indian government has rejected a request by Apple to import and sell refurbished iPhones in the country, Bloomberg reports.

It’s a major setback to Apple’s India strategy, a major component of which was reusing old iPhones as a low-cost option in addition to selling new iPhones, which are too expensive for many Indians.

Indian smartphone companies opposed Apple’s application, according to Bloomberg.

Apple has set its sights on India as its next major growth market as iPhone sales in China have slowed their torrential growth and the Chinese government seems poised to increase the amount of regulation it places on Apple.

“This is another huge one. India will be the most populous country in the world in 2022,” Cook said Monday night on CNBC. “People really want smartphones there, really want smartphones.”

“And now we’re really putting energy in India as well,” Cook said. iPhone sales grew 56% last quarter in India, according to Apple.

Another advantage to selling refurbished iPhones in India is that Apple can continue to sell older devices that don’t connect to the latest “LTE” cellular networks, common in the United States and other developed nations, but are essentially nonexistent in India.

“What I see is that countries like India, no LTE, so 0% penetration,” Cook said. “They are selling smartphones, and we sell iPhone there. But arguably you can’t get the full value from it.”

Aside from price issues and government permits, distribution and brand awareness are major issues that Apple will need to solve to turn the Indian market into a second China. A recent study found that nearly half of Indians did not know about Apple.

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