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Varuni T.V., a business professor in India, had her eye on a particular smartphone for months. She coveted its look, its camera, its user-friendly features. Finally, at the end of May, the 34-year-old—who, like many in southern India, uses initials instead of a surname—bought that dream device: a black iPhone 5S, a model Apple Inc. released in 2013. “It doesn’t bother me that it is several generations old,” says Varuni, who teaches at a college in Hospet, a mining town six hours north of Bangalore. “It’s a good feeling to own an Apple phone.”

Apple needs more people to think that way in India, where iPhones are struggling against cheaper rivals with comparable specs, including local manufacturer Micromax Informatics and China’s Xiaomi, Oppo Electronics, and Gionee Communication Equipment. Apple made just 3 percent of the smartphones sold in India, the industry’s fastest-­growing market, in the first quarter. Now it’s letting stores and online retailers such as Amazon.com Inc. and Flipkart Ltd. slash prices for retro models, a rare concession for a brand that carefully guards its high-end image. All in, the business professor paid 20,400 rupees (about $300) for her 5S at iPlanet, a local reseller. The most similar model Apple still sells in the U.S., the iPhone SE, starts at $400 without taxes or fees.

Apple took a clear hint. Older phones accounted for almost 55 percent of the 2.6 million devices the company shipped to India in 2016, according to Counterpoint Research. While Apple’s official website for India lists only the iPhone 6S and SE for entry-level buyers, other retailers show the iPhone 5, introduced in 2012, and the iPhone 6, from 2014. The 5S, which was effectively replaced by the SE, was listed at 15,999 rupees during an Amazon sale in May.

As sales droop in China, Apple needs another big market to sustain growth and its $800 billion market value, and Counterpoint estimates that Indians will buy more than a billion smartphones in the next five years. “We’re very optimistic about our future in this remarkable country, with its very large, young, and tech-savvy population, fast-­growing economy, and improving 4G network infrastructure,” Chief Executive Officer Tim Cook said on Apple’s May 2 earnings call. The company declined to comment for this story.

India’s government bars the importation of used electronic devices for fear of environmental damage. (It’s also trying to establish the country as a manufacturing base.) For more than a year, Cook has been lobbying the government to loosen protections so he can sell iPhones in India directly, instead of relying on other retailers. So far he’s failed; the government is asking Apple to quantify its commitment to India in terms of capital spending and jobs. But as long as iPhone prices stay relatively low, Cook still stands a much better chance of attracting more Indians to the App Store, iTunes, and other Apple services, says Anshul Gupta, research director at market researcher Gartner Inc. “As the premium segment grows in India, Apple wants a larger slice of it,” he says. “The bigger the iOS base, the brighter Apple’s future in India.”

Besides discounts, retailers have been pitching iPhones with cash-back offers, product exchanges, and monthly payment plans, all aimed at making it easier for young Indians to spend a month’s earnings or more on a 5S. Apple is hiring an undisclosed number of “affordability managers” in the country to negotiate with banks and other lenders on behalf of potential buyers. Customers in smaller towns, who rarely buy pricey phones, have shown exceptional interest, says Ayyappan Rajagopal. He oversees smartphone sales at Indian e-commerce leader Flipkart, which sells about a third of the country’s iPhones. “The older models serve as an entry point,” he says. Flipkart lists the iPhone 6 for 24,990 rupees and is promoting a mystery sale of at least 1,000 rupees off for Father’s Day.

Chinese phone makers are also aggressively cutting prices in India, an effort to salve slowing sales at home. Xiaomi co-founder Lei Jun said in March he would double his investment in India over the next three to five years. Apple may be hard-pressed to keep discounting its phones to match.

The company could more easily lower prices if it begins manufacturing phones in India, which would allow it to bypass import duties. It’s built a small factory in Bangalore operated by partner Wistron Corp., which is assembling a couple thousand iPhone SEs as a trial run, according to people familiar with the matter. To meet government requirements for local manufacturing, Apple’s next step would be to start making individual phone components in India. At that point it could open its own retail stores there.

For now the company is relying mostly on Amazon, Flipkart, and converts such as 17-year-old Bharadwaj Nayaka. He got a brand-new iPhone 5S from his uncle after passing his exams with high marks. “My friends are all envious of me,” Nayaka says. “I love the iPhone’s features. Maybe I’ll buy a newer model a year or two down the line.”

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