Well, if you were in India last week you could not have missed the big news – the famous Apple iPhone has finally made its debut in India. Well, I mean atleast officially. This came after years of its debut worldwide. This after half the Indian population had already sneaked in the iPhone from all the surrounding countries. And this after even the endangered guerrillas in the Congo basin may have started owning one. So, Mr. Steve Jobs, welcome to India! Glad that you could finally find this country on the map.
Before I delve more into this post – please don’t get me wrong here. I like Apple and have always admired their products. There may be two thoughts about the quality of their products, however no one can deny they have always been different from their peers and have always stretched the boundaries of innovation. I own some of their products and long to own some more too. My only challenge with them is that I have always believed that Apple has always made suckers out of the consumers. And as consumers the unfortunate thing is that we have allowed Apple to do that honor on us!
To prove my point – take a look at the price range of the iPhones which were rolled out in India. It is somewhere around 35,000 Indian Rupees (this is nearly about 800 USD) with a forced service plan. The same phone in US, if I am not wrong, costs around 200 USD. I am assuming that most of the iPhones are manufactured somewhere in and around China. So it should be relatively cheaper to transport iPhones from there to India.
My argument here is not about India (or any other similar country) can afford it or not from an economic sense. (I personally believe that the count of people in India who can afford iPhone is much bigger than the population of United States). Also, I believe a lot in Capitalism where the seller should be able to decide their own price. Same thing holds true for the Consumers who can decide for themselves if they want to accept or reject the same price. However, my argument here is about what kind of view does Apple (and its associated business partners) have about Consumers in countries like India.
Here is my simple anology. I tried comparing the ‘affordability factor‘ of iPhone in US and India. A fresh under-graduate software engineer typically makes about 4500 USD/month in United States. (I am being location agnostic here). If he/she were to buy iPhone in US today that would be about 5% of his/her monthly salary – assuming the cost of iPhone to be around 200 USD. Counter-part of the same software engineer in India typically makes about 50000 Indian rupees. If he/she were to buy the same iPhone in India today at the cost of 35000 Indian rupees, that would be about 70% of his/her monthly salary. The difference between 5% and 70% is very telling here.
Now, if iPhones were to sell at the same price as it is sold in US and even if Apple (or its partners) decided to make a 20% markup on that – the same iPhone would be 20% of the monthly salary of the Indian Software Engineer. The difference between 5% and 20% between the two counterparts is reasonable IMO. However, difference between 5% and 70% says a lot on how Apple views the same consumer segment in two different geographies.
Once again, I am not trying to be a populist out here to say that Apple should do concessions. Indian consumers, IMHO, have a powerful buying capacity. However, my opinion is that they are getting sucked in a big scam here.
On the day of the launch, the providers who launched iPhone in India proudly published the photograph of a smiling young lady who they claimed to be the proud first owner of the iPhone. If I were in the shoes of that young lady today, I am not sure if I would be feeling good about getting duped as a ‘sucker’.
Thoughts and fires are most welcome!