iPhone 4 India pricing: the million dollar question

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When I saw the leaked iPhone pictures over at Gizmodo, I thought the controls on the side and the sharp edges made it look like a Nokia phone. And then I saw the launch pictures and the features. Now just the pictures and the GUI of iPhone 4 makes my current iPhone 3G look dated. While Vodafone has talked about the India launch, the pricing is not announced yet.

It dawned on me pretty late. Telecom operators in the US agreed to subsidize the handset price of iPhone 3G because of the assured monthly revenues arising from the 2-year contract. It meant for low entry prices into the iPhone and AT&T Network for several consumers. In India, Apple fans like yours truly, were hoping for $200-like pricing in India. But that was not to be. I guess the telecom operators could not offer a lower entry price and hope to garner revenues through data charges, simply because we don’t have 3G yet.

‘There’s an app for that’ benefit of the App Store is lost on India since we don’t have 3G networks. And relatively speaking – localized apps are fewer in number, similar to the chicken & egg story. On my current Airtel network I sometimes get a download speed of 80 kbps (the highest I have noticed is 195kbps). Such speeds make superb RSS Apps like Reeder and Byline quite useless. We also don’t realize the full potential of apps like New York Times (iTunes link), CNBC, IMDB (iTunes link) and several others.

The prospect of pricing of iPhone 4 lower, will be linked to availability of 3G networks. Telecom operators will perhaps get the confidence to generate revenue through monthly data charges and not load the entire cost upfront. The no-contract pricing of iPhone 4 in the US is $599 (28k)  for 16GB and $699 (32k) for 32GB – pretty similar to the current India pricing. Will it change with iPhone 4? A Rs.15,000 entry price with a 2-year cntract for iPhone 4 is mighty tempting and will be a game changer. But I doubt it will happen. The 3G networks are likely to be in place by November (Diwali season) if reports are to be believed. I doubt if we will have a contract linked low entry price for iPhone 4. Even if 3G networks are in place. Sigh.

And oh, who know when it will be launched in India, given the 3GS launch experience?

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  1. I agree – the iPhone 4 looks and sounds like a device never before… it might be available in India in the September launch of 88 countries, and could be priced on par with the 3GS current pricing (very sad for those who recently bought the 3GS!!)

    I doubt phone subsidies will happen in India, particularly on the iPhone (and other similar smartphones)… AT&T charges $40 for voice and $15 for data at a minimum. A $400 subsidy is at most 7.3 months of ARPU. On the other hand, a basic post-paid plan in India costs about $10 and add another $10 for the iPhone data plan… a similar subsidy would mean 20 months of ARPU. An Indian carrier can at most afford Rs 5-8K in subsidy for a 2yr iPhone contract. There is also the issue of enforceability of such contracts in India.

    Indian mobile operators have sometimes subsidized low end handsets in order to increase the addressable market (volumes); the ARPU curve over the last few years is a clear indication of this strategy. I guess they believe that those who want iPhones and Blackberries can afford them anyways (or that their employers will pay)…

  2. Thanks! That was a brilliant insider's perspective on the telecom market in India. The last point was the most significant – those who want iPhones and Blackberries can afford them anyways (or that their employers will pay)…

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