How will you fund the iPhone X?

Buying an iPhone in India is a costly affair. But there are also many who just cannot wait to get their hands on it, by hook or by crook.

The soon-to-be-launched iPhone 8, 8 plus and X variants will set you back by between ₹64,000 and ₹1,03,000. Prospective buyers have already made plans on how to finance the new phone. While some are eyeing not-so-prudent options like digging into bank savings and sale of shares in the demat account, others are looking at taking EMIs on credit card, consumer durable loans or asking a friend in the US to buy one as it is cheaper there. There are also those who already have an Apple product and believe that such high investment on an upcoming phone is not worth it.

Getting an iPhone from countries such as the US, Canada, and Saudi Arabia seems cheaper than buying it from outlets in India. Prospective customers are sounding out friends and relatives living abroad to buy a phone on their behalf.

Firoz Khan, who is in the mid-fifties and lives in Kutch, is getting his friend in Saudi Arabia to buy an iPhone 8 for him. “I can get it cheaper by ₹10,000. Why should I spend more when I can get it for less,” he poses.

Dharani Krishna, 26, from Hyderabad, a financial analyst who uses iPhone 6S now, is excited about getting iPhone X. He says, “for the high level of user experience, longevity and privacy provided by Apple, it is worth investing such a huge amount. As I have the opportunity to save some money by buying from the US, I chose asking a friend.”

Though it sounds good to save some money by buying from other countries, one has to be cautious about the warranty that comes with it, caution experts. If the product does not provide international warranty, the product has to be shipped to the country of purchase for the repair services, which will be charged extra otherwise.

E-commerce players such as Flipkart and Amazon have entered into a tie up with all major banks such as ICICI, HDFC, Axis and Citibank to provide payment through EMI with interest ranging between 12 to 15 per cent per annum and tenure from 3 to 36 months. As of now, they also provide free cost EMI options on almost all card payments with tenure up to 12 months. Though processing fee is being waived by many banks, it may be charged depending on the card you use and also the platform you buy from.

Besides the EMI option, one can also avail the cashbacks and discounts on select cards. For instance, discount of 5 per cent is offered on payments using Axis Bank Buzz credit card till September 30 and cashback of ₹10,000 with Citi credit and world debit cards for pre-booking orders on Flipkart.

Those not having a credit card, wanting to buy an iPhone on credit can look at consumer durable loans offered by some financial institutions too. The down-payment will be generally between 5-25 percent of the product value. In most cases, these would be no cost loans, recovering only the price of the product. However, some of the institutions charge processing fees between ₹400 and ₹700.

In addition to the above options, one could also consider exchanging old phones for a reduction in the cost of the new iPhone. Of course, certain conditions apply to determine the exchange amount.

Swetha Rajamohan, 30, working in VMware, plans to buy iPhone 8 (64 GB) by exchanging her Google Nexus 5 which she has been using for three years. She estimates that her old phone will fetch around ₹15,000, which could be adjusted against the new phone’s ₹64,000. “I will exchange my old phone for ₹15,000 and use another ₹10,000 cashback that will be offered by Citibank, and will pay the balance in instalments,” she declares. Asked if investing in iPhone is worth it, she declares, “An iPhone is an iPhone and I am happy putting my money in it.”

It is to be noted that EMIs work on auto debit mechanism and enough balance has to be maintained in the accounts on the due dates. Defaulting on payments is a criminal offence and can negatively impact your credit score. Moreover, the default fee can spike the overall cost.

Krishank, from Mumbai, a risk manager for a trading company, who is using OnePlus 5 now says that he would rather holiday in Thailand than spend ₹80,000 on a new iPhone. He says, ‘For ₹80,000 I could visit Thailand and get a good Android smartphone, which has good features. iPhone doesn’t have merits worth its price. Also, Apple itself makes its own phone outdated within a year.’

Mony Sachin, a chartered accountant who lives in Hyderabad, says he regrets selling some of his shares in Ashok Leyland back in 2016 to purchase the iPhone 6S as the stock has rallied significantly since, but the price of the phone has fallen. Digging into your savings for buying a phone is not prudent as you are moving money from an asset that generates return to one that will lose value with time.