Information Madness

Right after the pricing announcement of Apple iPhone in India, I started a poll hear whether someone will pay Rs. 25,000 to buy an iPhone or not. The poll results were quite expected. Total 524 people voted during this poll and out of that total 404 people said they would not spend Rs. 25,000 or more to get an iPhone. 74 people voted YES and 46 people said Maybe. So basically

77% said NO

14% said YES

9% said MAY BE

There is no question that  IPhone’s launch in India has been dubbed the biggest failure of a top-notch brand from a well regarded company in recent times. So what went wrong?

There are lot of factors starting Price, marketing communication to the sales and distribution.

Apple had imported around 50,000 phones at the time of the launch but had only managed to sell around 11,000 units so far. IPhone’s failure in India has been described as a pricing failure by most.

The US is predominantly a post-paid market where consumers buy the handsets from service providers under different deals. Carriers such as AT&T Inc. can afford to sell the phone at $199 because they can recover the real cost by raising call charges or through some other options. And Apple doesn’t get hit in the process because carriers give it the actual price.

This, however, is not possible in India because it is mainly a pre-paid market. Here, most consumers change their handsets, and even service providers, quite frequently in favour of cheaper options. Also, handsets have never been traditionally sold by service providers. Apple had to tag the product with its real price because its licence holders in India, Bharti Airtel Ltd and Vodafone Essar Ltd, couldn’t have subsidized the price. “The reason why the price of an iPhone seems so high (in India) is because it is not sold on a contract. This selling process has not yet caught on here.

There was a Finance Your iPhone With ICICI, Barclays Or Axis option in India at one point to buy an iPhone. But hey, who wants to buy a phone with monthly installment? 

I hope the companies learned something from this failure.

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