My Observations on iPhone 4S Pricing in India

This post is a collection of points around the iPhone 4S Pricing and some observations around them, specifically in the Indian context. Its been over a month now that the iPhone 4S was announced in the US but India has been kept waiting for both the hardware and of course, the pricing. India is a price sensitive market and hence there are bound to be reactions (in fact more from people who anyways were never going to buy this phone).

But first the facts. Officially, the low end model of the iPhone will be available at Rs. 44,500 (approx $870 at the current exchange rate of Rs. 51 to a US $). The next set of models, 32GB and 64GB are going to be sold at Rs. 50,900 ($998)and Rs. 57,500 ($1127). Compared to the current prices available at the Apple Store for iPhone 4S , the prices are atleast $200 more.

The most striking part of the price is that the $200 more for each model that I am talking about is for the Unlocked models, whereas in India, it is currently tied to the operator. Similar models with 2-3 year plans in the US are much cheaper. For those who have been following Apple for a while in India, it is not surprising. I do not think that anything has changed so the hue and cry is a bit I must say, not really needed. Every time, a new model comes out, people get most of them from the US or the gray market, get it unlocked and the world goes on.

I would like to classify several categories of users vis-a-vis the iPhone:

1) I love the iPhone: The number of people in India who really care for the iPhone in terms of its iconic status, its design, its path breaking UI features AND who will purchase the phone, no matter what the price is very small in number. This is a different segment and increasing at a small but steady pace. I do not have any numbers to back my claims but it is based on keeping my eyes open as I meet people everyday.

2) I develop for the iPhone : The other segment is that of the Companies who do iPhone development will get it anyways for themselves, no matter what the price since you can recover the costs easily in your first project itself .

3) I wish my company gave me the iPhone instead of the Blackberry : Here I am talking about the Enterprise users, who secretly and badly wish that their company breaks the shackles and goes with the iPhone/iPad.

4) Everyone Else: Here I am clubbing together the following: users who want to buy it for the first time, iPhone haters, Apple haters, “Android is going to fucking rule this world” fans, the Press, those who cannot afford the iPhone or do not see a need for it. Hopefully I have covered all but you can add them if I missed.

So does all this mean that the iPhone is doomed in India and that it is never going to see the upswing? That is exactly what most people are saying (or should I say reacting!) but I have a different point on all of this and it pertains to point (3) above. And here it goes:

1) Apple has validated this great product of theirs in the biggest consumer markets of the world. No one can dispute that.

2) The next battleground is that of the Enterprise users. We all know where Blackberry is heading to and it does not make for great reading the way that they are stumbling in delivering new models.

3) The situation is ripe for either Apple or Android to come in and take this pie that Blackberry assumed was theirs for a long time to come.

4) Given the fragmentation in the Android market, it is going to be a nightmare for any IT head of an Enterprise to make a decision on which vendor and model of Android to go with. Mind  you, this is not a consumer sort of a thing, where the decision rests with an individual, his buying power, his choice. We are talking here about Enterprises where thousands if not hundreds of devices have to be purchased.

5) The Pricing of the Apple iPhone therefore to me looks absolutely fine when it comes to Enterprises, who are debating to equip their executives with iPhone instead of the Blackberry. If you have any doubt if this is just a pipe dream, stop dreaming and read this. Just look at the numbers. The trend has already begun and I do not see why Indian corporates will not adopt this phone. All it needs at times is someone to make that first step and then the herd mentality will take over.

So in summary, if you are unhappy about the iPhone pricing — a) Chances are you were never going to buy the iPhone anyways b) The iPhone was always at the high end of pricing c) Apple, in my opinion, wants to court the Enterprise market not the consumer market.

You can say that I do not back up any of this with numbers. But if numbers were the only thing in the world, Apple should not have even contemplated making a music player a decade back.

I’d love to hear what you think about this? Let us keep the talk on pricing and if you see the iPhone making inroads into the Enterprise segment in India.

P.S:

1) I do not own an iPhone. I own an Android Phone and I teach Android. I am bullish on Android. And I am glad that there is the iPhone in the market, competition and choice is very important for us to move forward.

2) By the way, I did not talk about security in the Enterprise. This one line is all that it deserves.

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4 thoughts on “My Observations on iPhone 4S Pricing in India

  1. I like the clarity of thought in your point of view. I differ from the opinion that Apple is not pinning on consumer market in India. I think Steve’s opinion on developing market was different from that of Tim. Tim Cook, I believe, was more eager in introducing Apple products into developing markets like China. And it became a huge success.

    Its business in China is increasing by leaps and bounds ever since Apple stores were introduced there. It is already their second largest market in the world.

    http://www.bloomberg.com/news/2011-10-19/china-becomes-apple-s-second-largest-market-by-sales-cook-says.html

    Something about pricing of an iPhone vis-a-vis its effect on sales :

    http://www.itproportal.com/2011/10/27/china-overtake-us-apple-largest-market-cheaper-iphone/

    China like India is also a price-sensitive market and Apple has done extremely well there. So, I think they would be eager to tap the huge growing Indian Consumer Market as well in years to come.

    But nice article. And I do not own an iPhone. 🙂

    – Shyam

    1. Thanks for the feedback.

      I rather keep personalities aside and focus on the product aside since most of what we read about Steve or Tim is all from articles and not first hand experience. Cheaper iPhones will probably arrive or may not — we cannot say.

      I am sort of betting on the pattern that we saw with Blackberry. The corporates went in droves and then it trickled down to the masses. It would be a pleasant surprise to all if the consumers drive it this time around vis-a-vis the iPhone but given the current pricing, it looks difficult.

      On a similar note, I think Windows-Nokia Phone has a great chance to take some % share but they need to be price sensitive also, without which I don’t think they will make a dent.

      Cheers
      Romin

  2. What, in your opinion, would overcome the price hurdle? The price difference between the standard blackberry and the iPhone is still too much, for it to be considered by enterprises, as a blackberry replacement.

    1. Thanks for your comment. I do not think that price should be a factor when it comes to productivity. Organizations who have a means to measure their productivity and how equipping themselves with devices can further boost that up, will be the first out of the blocks. They will factor the price while doing their calculations.

      So in simple words, I do not think the price in its current form is too high or anything like that for Corporates, who do their due diligence before switching platforms.

      And you are right in that if most of the employees who are given Corporate phones are just using Email, then they maybe it is prudent that they sit tight. The iPhone has an ecosystem of Apps, which an Enterprise needs to tap into, either develop/outsource and merge with their Enterprise data.

      The App ecosytem is where the iPhone and Android have a clear edge over others. And forward looking Enterprises will tap that with these new devices. Price will be a non-factor if it can be proved that it adds to the bottom line in terms of productivity.

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