The price inflation was the highest in India due to the sharp depreciation of rupee against the dollar along with steep import duties, and high local taxes, analysts said. “India’s disproportionately steep price hikes are the result of a compounding effect of currency depreciation and the recaliberation of an internal currency buffer Apple has maintained for markets like India. That buffer required a revision and rightfully so,” said Navkendar Singh, associate vice President, IDC India.
Apple imports fully-assembled laptops, tablets and smart home accessories to India, which attract steep import duties and an 18% goods and service tax, that has added on to the price increase, he added.
The sharp price hikes across the products make the Indian models relatively more expensive than their counterparts in the US and EU, which may prompt grey market imports due to the price arbitrage, warned Tarun Pathak, research director, Counterpoint Research.
The price increases are a direct reaction to skyrocketing component costs driven by the global AI infrastructure boom. Handset makers are experiencing a severe shortage of DRAM and NAND flash memory, prompting all brands to raise prices.
Apple had held on for a while, absorbing the cost increases into its margin. Outgoing chief executive Tim Cook last week announced price hikes are now inevitable as component costs have become unsustainable. The price increases Apple announced on Thursday night vary by region, with India seeing the highest percentage jump as compared to regions such as US, China, EU and other markets.
The US saw a relatively uniform 15% to 25% hike across the products, while buyers in EU saw prices go up by 20-25%.