The current standing price for the iPhone in India is Rs. 31,000 and Rs. 36,100 respectively for the 8GB and 16GB models. This seems to have everyone in a tussle as to why a device that was touted to be “half the price” actually turned out to be three-to-four times more. I’m not in the least bit disappointed; it was more than expected. The answers lie in historical patterns as well as present marketing. Let’s start right from the beginning.
Apple has never seen India as a potential market for anything except the iPod—and that too five years after the first iPod debuted in the U.S.A.. It was around the middle of 2005 that iPods began to roll into the country and one would see them everywhere (a few departmental stores had them too). India has never been on Apple’s radar as a market for Macs, the iTunes Store, or the Apple TV. It would be a really far fetched bet to believe that their latest gadget would be any different. Heck, Apple itself is not selling it either. It is being brought in by the telecom giants Airtel and Vodafone. Apple resellers are taking pre-orders and have reportedly said that they’ll be selling the phones, but again, they’re being paid by either of the two telecom companies to do so, not by their parent company Apple.
The price tag of $199 is for locked phones and we know that AT&T is shelling out good money to subsidise the price and keep it that low. That means the price cut is at the provider’s loss, who plans to offset it by selling them in large quantities and levying outrageous charges on customers in the form of recurring rentals for the entire duration of their multi-year contract. That ploy might work in India too, but it would be a gamble because the majority (and I mean majority) of the country has never used a smartphone before. The ones who have, have been using Blackberrys and Nokias, two very reputed brands in the country. A lower price of around Rs. 25,000 might be good to sell it as a ‘smart phone for the masses’, but the masses in India:
- cannot afford a phone for Rs. 15,000 or more; and
- don’t particularly care for Apple as a phone company, especially one that wants you to spend about Rs. 20,000 on their phone.
In a market which has never associated Apple with anything except music players, bringing in a new device at their own loss is a risk companies are not going to take so early in the game. Maybe a few months down the line we can expect a price cut (like what the Motorola Razr saw), but the telcos will want to make the most of it while they can play off the hype that the international market has created in people’s minds. Remember, the mainstream crowd hasn’t heard most of the problems the iPhone 3G has been facing. It’s only us, who follow technology news like we do, who know what’s really happening.
Then there are those who are jacktastically converting the international prices of $599 and $699 for contract free iPhones to Indian National Rupee and saying that the price is still high. We can’t do much about that. For what it’s worth, I think the price tag of $599 or more for an iPhone 3G is very high in and of itself, but that’s the subject of another discussion.
The iPhone has been priced relative to other smart phones in the market and, comparatively, it holds up pretty well. The 8GB iPhone is almost in the same price bracket as the 8GB N95 and, similarly, the 16GB model has a price close to the N96’s (argument of features and usage plans aside). It is also priced near about the same as the most expensive Blackberry. Plus, you’re paying for the Apple brand, so if you like, you can accept that as a reason for any pricing offsets to the other phones in the same segment.
In any case, people will buy the iPhone in the coming month or two out of sheer hype and on the basis of whatever little promotion the providers can come up with. Price will not be a deterrent for those who can afford it. For those who can’t, well, I don’t think they were bothered in the first place. Hopes of a price slash are not very far fetched, seeing as how the first generation iPhone saw a slash merely months after it was launched. Plus, if iPhone sales don’t match up to the expectations of the telcos, the laws of economics will step in automatically.
[EDIT]: I got my price for the N95 a little wrong. Still, the N95 is much older than the iPhone 3G, so it is bound to be cheaper in a country like India where prices drop fast enough to baffle Newton’s laws. (Thanks to Krazzy for the price headsup)
MacBook Alu 2.0 Ghz. - 79,700
For those of you who were waiting for Airtel’s prices for the iPhone, hoping that the Indian company would be more sympathetic towards the scores of wannabe iPhone users out there, you’ll be disappointed to know that they’re exactly the same as Vodafone’s.
