FE Editorial iPhone, we buy

The Financial Express
Posted: 2008-08-22 00:59:47+05:30 IST
Updated: Aug 22, 2008 at 0059 hrs IST

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: The iPhone, a multimedia, Internet-enabled, touchscreen phone developed by Apple Inc, first went on sale in the US in July 2007. The phone—which provided consumers with value-added services like a portable media player (iPod), web browsing, email (with wi-fi) and visual voicemail—sold an estimated eight million units in the US in 2007. It was launched in five other countries, but not India, soon after. The iPhone 3G, which has similar features, but supports faster data speeds and includes GPS, was launched globally in July 2008 in 22 countries, including the original six, and is now launched in India. iPhone 3G sold one million units in the first three days of launch, indicating its huge success in the US market.

Will the iPhone be a big success in India? The media hype surrounding the launch may suggest so. However, priced between

Rs 31,000 and Rs 36,000, it may be too expensive to make significant inroads into the price sensitive Indian market—the mobile phone revolution has its foundation in affordability. The iPhone costs between $200 and $400 in the US, which at current exchange rates is about a third of the sale price in India. So, though the product is being launched in India very soon after its launch in the US, affordability is significantly different. To add to the price constraint, the phone is available with only two network providers—Vodafone and Airtel—and the phone will be Sim-locked to these networks. Also, unlike in the US, none of these service providers in India is likely to offer subsidised tariff programmes as an incentive to buy the phone. For the time being, then, sales of the iPhone will be restricted to geeks and those in upper income segments who can afford it. Sill, the launch is an important event for the Indian market, as it is one of those rare occasions when a top-end technology product developed in the West has been launched in the country with a very small time lag. Interestingly, Nokia has launched its 3G enabled N96—with features like music and video download similar to iPhone—in India well ahead of its global launch. Even though the N96 is expected to be in a similarly pricey range, it’s a good sign for Indian consumers if global giants battle for ground in a hitherto ignored market.