iPhone Gets Tepid Reception in India

By Anjana Pasricha

25 August 2008

Apple's iPhone has made a quiet entry into India, the world's fastest growing mobile market. But as Anjana Pasricha reports from New Delhi, the iPhone's high price appears to have deterred many potential customers.

Only a scant crowd turned up for the midnight launch of Apple's iPhone in New Delhi Friday. It included a high school student, who said he wants to show off the gadget in school, and an entrepreneur who bought six sets for himself and his friends.

Daytime saw a handful more customers like executive, Abhishek Jain, turn up at a New Delhi store to buy the iPhone. Jain is hugely impressed by the device, which combines a music and video player, cellphone and web browser.

"No other phone can match it," he said. "This is the best phone available in the world. I am very excited, I am very, very excited."

But there was no sign of people queuing up for hours, or the kind of craze witnessed when the iPhone was launched in several European and Asian countries last month.

Part of the reason is the cost - the iPhone is selling for over $700 in India, triple its price in the United States. That is because unlike the United States, Indian mobile operators are not subsidizing the phone.

Airtel, one of the companies which launched the iPhone, has shrugged off the high price tag, saying it is targeting the "high-end achiever and youth segment."

But many young people, like Ankita Chaudhury, doubt whether they will buy the iPhone anytime soon.

"I don't know if I want to buy it or not because it's priced pretty high," she said.

Chief editor at technology publisher CyberMedia, Prasanto K. Roy, says the price will impact sales.

"There are lots of people who have been waiting for two years for this, and they are going to put down the money," he said. "But the numbers are clearly not going to be anywhere near what we could have expected, not simply because of the price itself, but because there is visibility of price worldwide, and this is three times the U.S. price, so you can actually order it off e-Bay including customs duty, so that actually puts quite a dampener on the whole thing."

In fact, according to a recent survey, 150,000 iPhones, bought in other countries, are already being used in India. The phones can be unlocked with software easily available in the gray market.

But the companies selling the iPhone are hoping that people will now prefer to buy it in India to get full benefits such as the guarantee.

The model being sold in India is the same as that launched in other markets - the 3G or third generation phone, although India has yet to launch 3G networks.

India is one of the biggest markets for mobile handsets - 95 million were sold last year. Most of these are lower priced phones, but there is also a huge demand for high-end phones among the growing numbers of wealthy and middle class people in the country.