The iPhone's Indian Pricing Riddle

The wait is finally over. An Indian with Thirty One Thousand Rupees can walk into a Vodafone or Airtel store and walk out with the 8 GB version of Apple’s 3G Iphone.He’d have to pay 36,100 rupees for the 16 GB version. The hyped 3G IPhone was launched at midnight across stores in the country.

But, it’s surprising to learn that the exact same phone costs four times as less in the United States. The IPhone 3G retails in the US for around 8000 rupees for the 8GB version and 16,000 for the 16 GB version.

So why is this?

The price of the IPhone in India has shocked many. It was definitely expected for the phone to retail cheaper. Many even pegged the 8GB version to cost no more than around 18-20,000.

Indian telecom companies Airtel and Vodafone Essar have maintained a constant approach to answering questions about the high price of the Indian Iphones.

They explain that in the US the IPhone is offered at a low price because the buyer is bound to using the service of the carrier or the telecom company that sells the phone. A carrier pre-determined for franchising the product before sales began, the majority carrier for Iphones in the US is AT&T.By paying the carrier’s monthly tariff the buyer is paying an integrated charge composed of the service fee in addition to a small part of the phone as well.

In other words the IPhone in the US is subsidized, at least according to Airtel and Vodafone. However, a more complicated reason lies behind the high pricing of the Indian IPhone.

Airtel and Vodafone want the product to be seen as a high end model. Offering an 8GB touch operated phone built with the features of an iPod, a camera and the ability to connect to the internet across the 3G platform at a price of Eight Thousand Rupees would have undoubtedly bought the phone to being the focal point of a price war in India.

There is still a way to use the 3G IPhone and buying it for less. One can always buy the cheaper IPhone in the US and use it in India but the critical aspect is to make sure that the phone is ‘Unlocked’ because the locked IPhone forces the buyer to use the IPhone with 1 service provider only.

An unlocked IPhone gives the user the option of using all features of the phone barring the internet usage facilities. But there is no reason to believe this will not change in the future. Even without the use of the above mentioned service, the phone is still a good buy at the lower price.

Hackers are still working on making the phone internet enabled and some have managed to do so thus giving the user the authentic IPhone with his own choice of a mobile carrier. With the IPhone coming to India, Airtel and Vodafone are aware of this.

For the time being, they’re banking on the hype factor to sell the IPhone before the user starts to get smarter.