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Summary:

OK, now I know I have your attention! In India, the 3G iPhone goes on sale today and people are lining up to buy a device that is seriously, and I mean seriously, expensive. Bharti Airtel and Vodafone (India) are the two carriers who are selling […]

OK, now I know I have your attention! In India, the 3G iPhone goes on sale today and people are lining up to buy a device that is seriously, and I mean seriously, expensive. Bharti Airtel and Vodafone (India) are the two carriers who are selling the device in India.

On the Bharti Airtel network, the device is going to cost between $730 and $830 dollars, depending on the device you buy. Furthermore, the device is locked to Bharti’s special network. So for a family of three (mom, dad and a kid), the 3G iPhones will cost around the same as Tata Nano, the $2,300 people’s car that launched earlier this year.

The high cost isn’t stopping people from wanting the device. About 200,000 phones have been pre-ordered. “I must assure you that we are not making any profits by selling the iPhone 3G. We are only providing network services and the prices have been fixed by Apple,” Sanjay Kapoor, president, mobility, Bharti Airtel told a local blog. More than 30,000 unlocked first generation iPhones are already running on Bharti’s network.

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  1. And you’ll also be surprised to hear about the different tariff plans .. http://www.labnol.org/gadgets/iphone-3g-tariff-plans-of-vodafone-india/4269/

    You pay anywhere between $12 to $25 per month but still there’s a limit on data transfer.

  2. As shocking as the price is, the 30k unlocked first gens should have been a good indicator as to the demand. And the apple streak continues…

  3. Mr. GrayMarket Thursday, August 21, 2008

    Mr. Steve Jobs,

    Thank you so much. Business has been down for me lately. You know how hard it is to complete against all these swanky malls who sell stuff at the same cost as me. I was going to close shop.

    And then you launched your fancy new iPhone. A product everybody is drooling over. Not only do you launch it in India, you price it for 3 times what you sell it for in the US.

    Not only that you make it so easy to unlock it. Click Click and I have an unlocked phone which for all practical purposes is the same sold through those dastardly official channels.

    Thanks to you I have a thriving business. And think about the margins !

    I think you are God and me and my colleagues here at the Delhi gray market are making a small glass shrine in your honor !

    Steve Jobs Jeete Raho !

    – Gray Market Man

  4. They are going to reduce the prices in future. Apple is doing the same thing in India as they always do in US. First introduce the product at a high price and then reduce the price once the demand has saturated to some extent. In Marketing they call it skimming off.
    But I guesss biggest apple fans will end up spending more.

  5. Great comment, Gray Market Man.

    Gray Market Man zindabad!

  6. Where is the Gray Market Man going to get his iphones from without the AT&T contract? ebay? they also jacked up their price and it is no less than 800 ?
    Good luck

  7. Dazed And Confused Thursday, August 21, 2008

    Hey All,

    The exorbitant pricing is actually a function of cost, in my humble opinion. Getting the phones to India is quite expensive. But that’s not where the real cost is.

    Bharti is including 500 MB of data per month for 12 months with the cost of the phone. So if the data is free, where is the data revenue going to come from? Apple doesn’t get subsidies anymore from carriers so they need to make up the cost somewhere else. Hence the cost of the phone. By my math, a 30 dollar data plan for 2 years is 600 dollars. 200+600=$830.

    Now that’s not taking into account unsubsidized pricing. We can go into the math of cost for 500 MB of data to Bharti, but I’d wager it’s under 5 dollars a month.

    Also, I can hardly believe that the average iPhone user on Bharti uses 110 MB of data over GPRS. That’s a 10 Kbps connection if I’m not mistaken. So using 110 MB would take a considerable amount of time. Not necessarily an absurd amount of time, but enough to where I would be suspicious of the average user utilizing this amount.

    Apple’s marketing and pricing has to vary by region as some areas don’t provide the infrastructure for Apple to maximize it’s product.

    -Dazed And Confused

  8. India has wide disparities in income, sales of phones at prices over 20k would be relatively limited, and even more limited at above 25k and this segment may not be price sensitive. They have obviously done their math and seen the numbers at lets say 20k, 25K, 30k this being the price insensitive market segment would be more of less the same and reconciled to a limited market, or the numbers at 20k were not compelling enough so why not keep the extra 6-10k.

    Affordable aggressive pricing would have been below 20k ($400), probably near the 15K region but would they get enough customers at that price to cough 800-1000k plus a month on plans to recoup the subsidy. I think they know the market will be limited so why no use the ‘cream strategy’. They can also use it as a marketing/branding exercise and tap into high value consumers.

    But at 31k they should really not be locking it, that makes a mockery of the ‘subsidize hence lock’ business model. For the tech savvy crowd looking forward to the iPhone reaction in the forums has been outrage at the perceived profiteering. This is going to a niche with snob appeal and its clear from the pricing that’s exactly how it Airtel/Vodaphone/Apple trio intend to a market it. So features and other things are really not the factor and techies who would appreciate these are probably not going to be able to afford it or see enough value at 31k-36k.

  9. Nick Stamoulis Thursday, August 21, 2008

    Wow and I was complaining about AT&T’s prices… that’s pretty insane!

  10. I had prebooked for a iphone in vodafone India and was literally shocked and laughing when I received their sms indicating the prices! :) Actually preordering is not a sale as someone has to pay 10K advance (200$) to book it and then pay the full amount. I never bothered about proceeding with this after their price. It is an absolute ripoff that it is locked after paying this monstrous margins airtel / vodafone is trying to make! 95% of people who prebooked wouldn’t buy the phone because of cost! When I can get a 1st gen iphone unlocked at 400-500 USD why would I end up paying for a 3G phone when there wouldn’t be any 3G for atleast couple of years. Btw prebooking is just sending an sms expressing interest in iphone which everyone would do :)

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