BGR Investigates: Artificial shortage sends iPhone 5 prices up in India

If you are out shopping for an iPhone 5 in India, you are most likely to be asked to wait or pre-book one as it is sold out. Most cellphone retailers will tell you that they are expecting Apple’s distributors to get the next shipment soon. Many will even crib about the limited stock they received, which is not even enough to satiate the pre-bookings they already have from their customers. ET’s Hitesh Raj Bhagat (disclosure: he happens to be a friend of mine) reported about it a couple of days ago and briefly hinted whether retailers are hoarding the iPhone 5 and selling it at a premium. The stark reality is that they indeed are doing that. Read on for our investigation.

At the outset, let me make it clear that not all retailers are hoarders. In fact, most indeed received very limited stock and there is a serious supply-demand mismatch. But that’s the case globally and not specific to India. However, what’s interesting is how the iPhone 5 billed in India is available readily, provided one is willing to pay a premium that ranges from Rs 3,000-Rs 5,000 depending where one goes to buy it.

We checked a few retailers in Delhi and Mumbai, who first claimed that the iPhone 5 was out of stock but they could “arrange for one” with a bill if we were willing to pay a premium. Of course, the bill would mention only the MRP and the premium would be for making an “out-of-stock” product available. Some retailers were quite open in accepting that they had the iPhone 5 in stock but will only sell it at a premium.

“I’m aware that the iPhone 5 is hard to get and since I have a few units I will only sell it at a premium. Anyway, even when the next lot of phones come, I can still sell it at MRP so I won’t lose any money. How is it wrong if I can make some extra money if people are willing to pay a premium for it?” a retailer in Mumbai told us when we went undercover while investigating the matter.

Some other tech savvy retailers have also opened eBay accounts under aliases where they are selling the iPhone 5 with a genuine bill and warranty in India at a premium.

That’s not to say that every retailer is hoarding units of the iPhone 5 and selling them at a premium. “For me my store’s reputation is more important that earning a few extra thousand bucks like this. My customers come to me because they trust me and many of them have paid me in advance for their iPhone 5. Unfortunately, I don’t have any stocks and Apple’s distributors say there are no stocks. They send us no more than 20 units whenever they get any stock. However, some retailers seem to have a constant supply of the iPhone 5 that they are selling at a premium,” complained a prominent retailer.

While Apple has strict policies regarding pricing of its products, it also helps hoarders as they know the phones will still sell at MRP even when the stock is readily available. Unlike other products where companies drop prices regularly over the life of the product that deters them from hoarding, they are assured that they won’t lose any money on the iPhone 5 till Apple announces the next version of the iPhone. And that is not happening anytime soon.

We reached out to Apple’s PR in India but the company did not provide any comment at the time of filing this story. We would suggest our readers not to pay any premium for the iPhone 5. In case a retailer asks for a premium, do let us know in comments below. We will update this post as and when we receive any official comment from Apple.

Photo Credit: Eshan Shetty

  • hrishikesh

    bang on target rajat. i had suffered similar incident while buying iphone 5 from maple vashi(authorized apple reseller). i had booked a white 32 GB iphone 5 with full amount but on delivery date they denied me saying its available nowhere. whereas a floor above their shop is jumbo stores which was readily offering the phone. the eventually FORCED me to buy a black one that too 6 days late.

    • Rockstar

      U r lucky that u got black one by forced but after sometime u will feel lucky that u got black one coz i personally think white looks very cheap..!!!

      I was in love with my White 4S but its not same case with 5

  • Karan

    Really appreciate this post!! I have been visting Apple Store, Inborbit mall, Hyderabad regularly but they dont have any stock available since launch.. They have just put up a demo model and asking to wait for weeks…I am sure the distributors at apple are engaged in black marketing and they are making money sending all the available stock to grey market stores.. I have been struggling to get my hands on 32GB model and they are saying they havn’t recieved 32gb or 64gb stock in India yet.. Where as 32gb variant is available at Inborit mall, Mumbai store…

    Real shame on Apple for taking Indian market lightly and getting people scammed with premium blackmarketing!! We are already paying 200$ more on iphone comparing to the US pricings..Plus people are getting scammed with extra blackmarketing..

    • Nitin

      I got my 32 GB white for Rs. 52500 on 4th Nov (2 days after the launch). Which is MRP also. now feeling kinda lucky after reading all these posts.

    • Rajesh

      You should try the Aptronix store at Banjara Hills. The guys at the store are super friendly and will get you one when if you need it at MRP. Me and my friends bought 5 units there at MRP and the store personnel were more than willing to sell them to us.

  • Bhavin Kodiyatar

    I would rather buy a samsung galaxy note…

  • Ameya

    I am lucky got my iPhone 5 from The Mobile Store at 46,400 with 2yrs warranty :-)

    • Rockstar

      Really ??? That 2 year warranty thing is real???i also heard that before,…

    • Rajesh

      No such thing as two years warranty. You’ve surely been scammed. Applecare for the iphone is an add-on and last week when I enquired it was about Rs 3,900.

  • MKD

    This is what happen when you buy a brand name instead of the product itself.

  • Rizzu

    I got iPhone 5 for 43500 rupees with bill from reseller in TRIVANDRUM Kerala

  • Annoyed

    Agree with Hrishikesh & eventually I had to go with 16GB.
    And they are also asking for 3900 extra for 2 year warranty.
    Thank God I just got this as a gift.

  • Abhijeet ShouryaVeer

    iPhone 5, got the first phone from the distributor itself & that too on first day, i.e. November 2 in Gurgaon for 45.5 k, no one is charging a single rupee above the MRP here. This fraudulent activity and Blackmarketing us prevalent only in small towns.

    • karan

      Really? Come to Hyderabad or Bangalore!! Or do you work for apple?

    • Swapnil

      @Abhijeet

      So Mumbai and Delhi are small towns?

  • SRT

    i booked my iphone5 64gigs from ”maple vashi” on 30th oct till today i didnt got mine.. Every time i call they said wait for 10 more days… distributers r not giving stocks to APR stores ithink.. Rather they r giving others , pure example of blackmarketting … Other store ppl are told me ” are shortage wagaira kuch nahi hai , maal dabakar rakha hai , mid december tak hi chance hai yar paisakamaneka, utavle log jyada paisa dekar kharid rahe hai” lolzzz

  • kulwinder

    please go to timtara.com & get 4800/- discount i have buy from hare white 16 GB in 41200

    • Amit PAul

      Timtara? U got yr products?

  • http://www.beinggadget.com Neeraj Vohra

    Bang on…most of the retailers in Delhi are actually selling iPhone 5 at a premium . I went to feel shops in North Delhi where the sellers we’re demanding 3000Rs extra for 16gb model. Few even offered me 32GB by paying 7K extra as a premium price. Most of my friends actually purchased iPhone 5 by paying a small premium margin to the retailers. Thanks for letting your readers know about it.

  • http://www.beinggadget.com Neeraj Vohra

    Bang on…most of the retailers in Delhi are actually selling iPhone 5 at a premium . I went to few shops in North Delhi where the sellers we’re demanding 3000Rs extra for 16gb model. Few even offered me 32GB by paying 7K extra as a premium price. Most of my friends actually purchased iPhone 5 by paying a small premium margin to the retailers. Thanks for letting your readers know about it.

  • Rishabh

    I pre-booked mine on 30th Oct. I go to store regularly and they say “We are out of stock”. And they are selling at premium. This is really annoying. I just want to know when I will be able to get one? :/

    • Mayur

      Hey Kulwinder…

      Did u got ur product from timtara.com…??

  • Parag shah

    Coming straight to point as your investigation is not correct as 100% …….I would like to fill in you with one information that it’s not Sellers fault for asking premium for Iphone-5…..all the distributors have stock for Iphone 5….but we retailers are not buying reason is that they are giving bundle offer means (every 2 pc of Iphone 5 they compulsory give 1pc of Iphone 4s….which is not in demand.) So think logically If a retailer place order of 10 pc of Iphone 5 he will receive 5 pc of Iphone 4s. So to cover loss of Iphone 4s they are selling for premium…..even they can give bundle offer of Ipad also…….this is just complusion on sellers and then we tweak the policy,…….so Its apple who says they are strict on pricing of Iphone at back they are making like of retailes misserable……….which make our image bad……

    I hope this will make sense to your article……..

  • Mayur

    True Parag Shah….even i got this to hear d same news from some retailers….

  • Nilesh

    Every part of the story is cent percent true. I totally agree with you. I have booked my iphone 5 64gb model on 17th of October and still waiting to get it. Every time I call them to ask they reply that 64gb will be available after 1 week and if you want to buy 16gb we have that . Shame on Apple . I am really a big fan of Apple but after all this I think apple should improve their supply chain in India after all it’s an emerging market for them.

  • Andy

    In Ludhiana,Punjab also some of the retailers are asking for a premium ranging from Rs. 3000 – Rs. 5000 :/

  • http://N/A Harmeet Oberoi

    True…yesterday i called .. iworld,airtel &many other retailer.. and they said it very clearly black mein le lo 50,500 for 16gb white .. shocking hv been waiting for 15 days … gaffar mein 48000 ka mill rha h … pta nh kb tk wait krna pdega … hv booked it at croma hope wil get soon

  • Sudhanshu

    I went to enquire the availablity of stocks in APPLE premium resellers
    None of them were in stock(new delhi)
    Then the local reseller had them but were still selling at a premium price which really ridiculous !
    Some sold at 49,500
    Some hai 52,000
    (for the 16 gb model)

    So I am waiting now for this demand supply match up…

  • Karan

    I am telling you guys reliance and Redington is involved in black marketing all the stock to distributions who are selling iPhone with premium… They are getting their pockets cashed… Yesterday, I had visited a grey market store who is selling it with 4000 premium…and he said he is getting stocked by authorized apple distributor… Really hating the fact that The guys at Apple are responsible for such activity to scam people..

  • Karan

    Got iPhone 5 32 Gig From iStore Today Without Paying any Premium

    • Manali

      Wow which iStore?
      I happened to spend my entire evening yesterday in n around Phoenix mall , Mumbai :’(

      • Karan

        Spam comment with my name… There are many scammers and guys from apple who are trying to mislead people with false availability comments and could not stand this thread…. It’s not available anywhere in Bangalore…Hyderabad and Delhi… Tried all I stores…

  • Rockstar

    In ahmedabad no retailer is directly sell with premium..!!! (Personal experience)

    Better buy it online from infibeam.com or saholic.com .u can easily get it in 15 days

  • Rockstar

    In ahmedabad no retailer is directly sell with premium..!!! (Personal experience)

    Better buy it online from infibeam.com or saholic.com .u can easily get it in 15 days
    Without paying any premium…!!!

    • Nilesh

      the 64 and 32 gb models are out of stock on both of the websites over a month!!!! and a retailer in ahmedabad have 32gb model but selling with a premium.

      • Mayur

        Infibeam is best site to buy….ordered another 32gb from d website..ordered on 8 dec…and getting it on 10th….also was able to apply coupon code REGREEN2012 and got 5% discount….NOTE- AVAILABILITY CHANGES WITHIN THE HOUR ON D WEBSITE….soo u have to keep checking on it..

  • Nilesh

    The 64 gb model is available with a retailer but he is asking for a premium of 2500. what should i do? buy or not?

    • Sam

      Buy it because if you can afford a 59K phone , you would have no problem giving 2K or 3k more thn the actual price.

  • Shreyas

    Can anyone tell me where can I get an iPhone 5 64GB White Factory Unlocked from in Bangalore? None of the online stors have it and local stores and authorized stores aren’t committing to a specific delivery period. I saw somebody’s comment in Timtara and called up their customer care, thrice & they say they have it in stock but I highly doubt their credibility because the reviews abiut their website on Mouthshut.com are really bad, so I’m pretty spectical on buying from there.