The launch of Apple iPhone in India might signal an era of operators bringing in high-end phones to consumers at a subsidy, but with a binding contract. Analysts in the industry point out that Vodafone and Bharti Airtel may follow this model, as is the case with AT&T in the US.
AT&T, in the US, will charge users as high as $30 a month for an unlimited data with a two year wireless contract for the latest iPhone model, from July 11. Apple’s new 3G model with 8GB will be sold at $199 in 22 countries, including the US, as against $399 for the basic model. The contract with AT&T ensures that the subscriber remains with the operator without switching over to others. This will help AT&T to quickly recoup the subsidy for the iPhone.
However, Apple’s pricing in India is not officially announced. Anshul Gupta, principal research analyst for mobile terminals at Gartner, says, “The pricing of the iPhone largely depends on how negotiations happen between Apple and Indian operators Vodafone and Bharti Airtel, to make it more competitive. This could trigger an era where operators might start bringing high end phones at a subsidised rate with a binding contract.” At the moment none of the operators in India sell high-end phones with a binding contract. Bharti Airtel and Vodafone, when contacted, declined to comment.
Gupta adds, “Given the situation in India with respect to other markets, it will be a difficult task ahead for the operators to impose the binding terms and conditions to the end users. This will put success of this model at risk.”
Currently, Nokia has a commanding position with its N-Series phones in India and if the iPhone gets popular out here, it will bring significant market share shift between the two vendors in future.
But Research In Motion’s Blackberry may remain immune because of its focus on messaging and security.
The events at the market place, are, therefore, turning out to be interesting.