iPhone Price a Disappointment- Who is to be Blamed?
iPhone prices in India was announced yesterday by Vodafone and Airtel. The 8GB model costs Rs 31000 and 16GB costs Rs 36100. This has come as a disappointment for all iPhone fans (I’m not one). Most of the Indian fans were expecting a price of 15k to 20k. With this higher price, it will just become another luxury mobile phone which can be afforded only by few.
Now the big question is who is to be blamed for the high prices? Is it Airtel or Vodafone or both together or Apple? Before we can decide (Die hard Apple fans have already blamed Vodafone and Airtel), lets have a look at some of the facts on the pricing [Source].
- Manufacturing cost of new iPhone is $173
- The current price of $199 is the subsidized price with operators taking a hit of ~$300
- According to iSuppli estimate, actual price that AT&T pays to Apple for each iPhone unit is $499.
Bharti Airtel CEO Manoj Kohli already mentioned that there is no question of subsidizing the handset in India.
“US operators are able to subsidize handsets because they can make up for that with their call charges. They charge rates like 25 cents a minute. In India, the charge is 1.5 to 2 cents a minute,”
Another reason for higher price is that Apple has not chosen for a lower margins of sales from iPhone to countries like India. Adding to this is Airtel’s and Vodafone’s margin. Combined together we have a price of Rs 31000 and 36100/-, so its not exactly the operator who has increased the price.
I feel Apple has failed again in pricing strategy in India, Earlier Apple had done the same mistake selling Macs and iPods in India. India has never been an important market for Apple and its time for Apple to change this trend.
Excellent point. While I do blame airtel and vodafone its not all their fault.
Its also true that apple was too greedy and didnt want to sell iphone at a lower margin in markets like India.
@Pallab,
Unless Apple reduces the margin, its never going to be cheap, Airtel and Vodafone does not want to promote a product which will make loss for them. Its not only Apple who is here to make money.