Not many will bite into Apple146;s iPhone

Price-sensitive Indian market poses a big challenge to Apple which is set to launch its iPhone on August 22.

Price-sensitive Indian market poses a big challenge to Apple which is set to launch its iPhone on August 22. The company has priced iPhone between 700 and 800, which is probably higher than anywhere else in the world. In most of the markets, iPhones is priced at 199 and below.

The operators bundle iPhone with different tariff plans. For example, in UK, telecom service provider O2 is selling iPhone for free under its specified highest monthly tariff plan while T-Mobile in Germany declared to sell iPhone for 1 Euro to those customers who will choose the highest monthly plan.

However, in India, it may be very difficult for operators to subsidise iPhones. India has the lowest tariff in the world. This makes India as one of the lowest average-revenue-per-user ARPU market in the world. In India, a user on an average pays between 7 and 8 every month to an operator. In developed markets such as the USA and Europe, ARPU is to the tune of 40. Indian operators play on high volumes. Therefore, there is little scope for providing any subsidy for iPhone users. For high-end subscribers, bundling tariff and iPhone is not a very attractive proposition.

In India, Canada-based RIM8217;s Blackberry services were launched about three years ago. Blackberry has found acceptability among corporate users. Moreover, Blackberry phones are priced as low as Rs 14,000. Even then the company has not been able to sell a high number of Blackberry phones.

About three months ago, minister of state for communications and IT Jyotiraditya Scindia informed the Parliament that there were 1,14,000 Blackberry phones in India. This is a very small number compared with the overall number of mobile phones in India. In fact, we are adding close to 9 million new mobile connections every month.

In such a situation, the billion-dollar question is: how many iPhones Apple will be able to sell in India through Airtel and Vodafone? iPhones are are already available in grey market at about 20 per cent less price than what the company has announced for India.

8226; Another high-end phone Blackberry has found acceptability among corporate users, but it has failed to garner high numbers even when it is priced low

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8226; iPhones are are already available in grey market at about 20 per cent less price

8226; India has the lowest tariff in the world where operators play on high volumes. Therefore, there is little scope for providing any subsidy for iPhone users. For high-end subscribers, bundling tariff and iPhone is not a very attractive proposition