iPhone : Not for Me Not for All

Like many others I was also expecting the iPhone cost to be to in the range of Rs 10, 000 to Rs 15,000 ( $199 - $250) . But the iPhone cost in India is $700+ which is equal to Rs 31,000 in India . This will ensure that a people like me will keep distance from the product , or in other words will be forced to think of alternatives.

So has the pricing been wrong for the companies ? will this affect the overall product sales ? or let me ask a very basic question , which class is this product targeted at ?

Let us first understand the perspective of the companies ( Airtel / Vodafone ) , In US and UK the mobile companies sell the iPhone with an 'agreement' , the cost of the mobile is obtained from the customers, through their usages of services plus additional fees of usage of the iPhone.In India the mobile service providers are only charging the cost of the iPhones and no additional fees for the usages and thus they are trying to justify the high prices.

Now let us analyse the behaviour of the customers according to the following :

Target Audience :

The iPhone is targeted at the youth and on to the SEC A1 , SEC A2 group. Amongst these categories the youth is the primary target . At this price level , the price would act as deterrent , and why perhaps in Chennai it already has , no long lines were seen in front of the Airtel /Vodafone stores which were seen all across the world. The youth cannot afford the product at such a price range the older segment would not like to invest so much , particularly at this stage of the economy ( inflation at 12.6%)

Consumer Behaviour :

The consumer behaviour is the most important thing to consider. In this technologically advance era the day when Apple launched the iPhone in US , its cost was known to all. In India too we all knew the $199 price range for the 8 GB model. We had already calculated the equivalents and added some buffer etc and arrived at the price level which seemed acceptable to us . To be more precise if the product was available at that price range then it was 'Value for Money'. Al tough some might say that iPhone is more a Status symbol than a Value proposition.

But the bottom line is that the moment we knew about the price the first reaction was 'Whew it is expensive' . The customer therefore has now even a mental blockade which prevents him to purchase a iPhone.

The discussion would be incomplete without considering the perspective of Apple Computers , world over Apple is targeting the product for a 'Mass market' hence the price range of $199 for an advanced product as against an initial price of $499 for technologicaly inferior phone . I am surprised that how Apple top management can indulge in this marketing myopia. The company can make profits only when their iPhone sell. At this price they would not achieve numbers they would have expected in India.

So will the prices fall , certainly they will , they do in the electronics market . In India the iPhone is available is available at as low as Rs 14,000 so i don't see the logic that the prices won't fall, also to put things in perspective and make the comparisons more clear just consider the fact that today a family can buy a Desktop for Rs 25, 000 and a Laptop for Rs 30,000 and an iPhone for Rs 31,000.

At current price levels the Market penetration cannot be achieved , may be that may be the current strategy of these companies ( Market Skimming ) but one thing is for sure , whatever may be the strategy , it is keeping one customer away from the iPhone.

PS: Well already there are many alternatives available for iPhone at 1/4th the price in India. Ask my Boss Arun he will tell you why his 'Beauty' is better than iPhone