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The maker of iPads and MacBooks is betting the lower price point will help it wrest volumes from Samsung's Grand and S4 Mini, and recoup market share that has slumped, largely because it didn't have phones that were cheap enough.
This is the first time that Apple has resumed the production of a discontinued phone. The company prides itself on pushing the design and technology envelope with every release and progressively stops the sale of older models. Apple's Foxconn vendor in China has restarted production of the iPhone 4 just for India and the other two markets, according to the people cited above.
The move underscores the rising importance of the Indian market, where the American technology giant lost share and growth slowed in the last quarter.
Apple phased out iPhone 4 in October last year from all markets, including India, with the launch of its latest models - the iPhone 5S and iPhone 5C.
The company's India management managed to convince Apple that an entry-level model at the Rs 20,000 price point was essential to combat market leader Samsung and for expanding sales.
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IPHONE 4 HAD BEEN A HIT IN INDIA
The iPhone team in India is led by Sanjay Kaul, who used to be with BlackBerry India. The iPhone 4 had been the biggest seller for Apple in India due to its attractive price point. The model is regaining traction, said Himanshu Chakrawarti, CEO of The Mobile Store, India's largest cellphone retailer.
"It would now require some promotion from Apple and can potentially become one of our top-selling models like before," he said.
An email sent to Apple three days ago did not elicit any response.
Fresh iPhone 4 stocks, which have reached retail stores in the past 10 days, bear a December 2013 manufacturing date. Trade partners have been informed that new arrivals, reaching next week, would have been manufactured in January. The iPhone 4 production capacity could not be ascertained, but trade estimates put the number of phones that came to India in the first phase at 50,000-60,000.
While iPhone 5S has been a success, its starting price of Rs 53,500 means it can't be a volume driver, apart from which it was plagued by supply issues at the time of its November launch. The iPhone 5C model, with a lower specification but not appreciably cheaper, has failed to garner significant sales in India. With iPhone 4S selling at Rs 26,500 under exchange, Apple felt the need to relaunch iPhone 4 late last month at Rs 22,900, which is now down to around Rs 20,000.
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