iPhone disconnects in India
India may have the world’s fastest growing wireless market, but Apple (AAPL) didn’t set its hopes particularly high when it launched the iPhone 3G there in August. It reportedly shipped only 50,000 units to its partners on the subcontinent, with plans to double that number by the end of the year.
If so, those partners may have a lot of unsold iPhones on their hands come January. According to a long postmortem published this week in the Delhi-based newspaper Mint, Apple has sold only 11,000 iPhones in India, a country of 1.14 billion that buys 8 to 10 million cellphones a month.
“IPhone’s launch in India has been dubbed the biggest failure of a top-notch brand from a well regarded company in recent times,” wrote Priyanka Mehra and Shauvik Ghosh in a piece that underscores the difficulty of adapting Apple’s U.S.-based smartphone strategy to markets around the world.
Price, according to the authors, is only part of the problem. Although most Indians buy cheap cellphones on a pre-paid basis, there were plenty of potential customers who could afford the 31,000 rupees ($716 at the time) that Bharti Airtel and Vodafone Essar were charging for the 8GB iPhone. According to Mint, Nokia (NOK), Samsung and RIM (RIMM) are all doing good business in India selling smartphones that cost even more.
But Steve Jobs had announced before the launch that Apple would be priced at $199 globally — less than 10,000 rupees — a promise he couldn’t deliver on in India because local cellphone companies don’t subsidize cellphones with lock-in clauses the way carriers routinely do in the United States and Europe.
“This built a false hope in the minds of those consumers who wanted to buy it and turned away those who could have actually bought it,” Prathap Suthan, creative director of advertising agency Cheil Communications India, told Mint.
Moreover, he says, Bharti and Vodafone, lacking experience in the complex Indian retail environment, dropped the ball in terms of marketing and distribution. By selling iPhones exclusively at their own outlets, they’ve antagonized the big retail chains that dominate the market in India.
“A brand like Apple need not be told that an iconic product needs iconic advertising, a solid marketing push,” says Suthan, “The company failed to strike a connect with Indian consumers.”
For more of Mehra and Ghosh’s analysis, see livemint.com here.
[Thanks to Chris Foresman at Ars Technica's Infinite Loop for the link.]
Dear iphonerulez,
The way Americans like you sees India probably one of the reasons why American products failed there.
FYI, I-phone are not even sold (officially) in Malaysia. Probably our telcos would see this kind of problem would come. plus the profit sharing agreements.
I agree with some of the readers that Indian probably look more into faeture than hype..
Anyway, India have more than 1 billion citizens. What you might not realize is that there are more billionaire in india in any other countries in Asia, with 4 in the top 10.
go figure!
What the crap? Let me bring those people to light who think people in India want services for free.
1. In India, an iPhone 3G cost around $600+ while in US it is $199.
2. In India, even though you get an iPhone without contract but it is a misleading coz you cannot use the iPhone on any other network other than Vodafone or Airtel. So even though, you are getting a “non-contract” iPhone but it is still “locked”.
3. In India, you are paying $600+ for a 3G iPhone but the network is 2.5G (EDGE).
In US, ATT also sells a $600+ iPhone without any contract but tell me seriously how many of you guys have bought those over $199.
Bottom line, in India iPhone is a total rip off.
people who are being cocky about being able to buy iPhone and running Indians probably don’t know, that people here change hi-end phone with the seasons. he real reason it did not sell was because unlike americans and europeans, are not slaves to service providers and don’t like to be tied down one service provider.
another thing if Apple didn’t want to make money then why come to India? we were happy with our Nokias and Samsungs…which by the way make products that are way better than iPhone.
and for your information i am one of the 11000 who bought an iPhone and love it!!
Okay, so after reading so much crap about india, let me tell you how indian’s get iphones.
Step 1. Find Relative/Friend in the US.
Step 2. Get him to buy an IPhone.
Step 3. Get him to Jail Break it.
Step 4. When he comes for a wedding/funeral he gets it along.
Step 5. Give him the 10,000 or so rupees for his trouble.
Step 6. Get a SIM from Bharti or Vodafone and plug it in.
While 20-30 dollar phones form a large part of the market, they dont have any sort of absolute majority on the market. There is a very large part of the population which routinely buys and keeps switching between phones which cost upwards of 200 dollars.
Well this is what happens when a company ignores the fact that - many battles can be won by numbers alone and Indian market is one such battle. Nokia did a great job in providing only those features which make 1.3 billion Indians love their cell phone and love Nokia. Apple has a lesson to learn from Nokia here.
Some one commented “It’s quite pathetic that India actually expected …bla bla bla” does not realize that 1.3 billion can make or mar a company’s future in just one quarter! We in US and Europe are captive of T-Mobiles, Oranges and AT&Ts of the world and we seem to have perfectly accepted this slavery of paying premium price for things we don’t even know how to use.
Times have changed, with technology changing so rapidly people are more aware of whats ‘good and ok’ for them and they can differentiate between ok and good. I think now its time for a business overhaul for Apple like premium legacy companies which think that people will buy $500 i-phone one thanks giving and 3 months later Apple will sell them i-phone 2.0 with 3G. Come on! now can anyone at Apple tell me who can make a entire new hardware in 3 months?? Apple has a history of, well, yes sort of ‘cheating with its customers’…which people have now started to oppose!
It’s quite pathetic that India actually expected a $200-iPhone w/o the provider subsidies. Unfortunately for India, Apple is in the business of making money. As for Vipin’s argument about the iPhone lacking “features,” bitch please!
I would have got an iPhone, had it not been locked with service providers. Paying full price for a locked phone simply doesn’t make sense at all.
I hope Apple learns from this experience and avoids service providers in the Indian Market for their future products.
Apple sells in India not through the organised sector. Just to put facts in perspective, a single grey market operator in Delhi and Mumbai may have sold the 1,000 phones we are talking about. Indians are becoming very net savvy and do not want to buy things which they can get at a bargain later. American mobile companies are subsidizing the Iphones for the Indians. That is the true fact. Sales of Iphones are excellent and it is being well recieved in India.
Four reasons I can think of
(1) Price: after promising to be $199 everywhere in the world, it did not happen.
(2)Lock-in: Why would I pay the full price when the phone is locked into the provider?
(3) Absence of 3G in India
(4) Selling only through the provider outlets: which adds to the feeling of lock-in.
I was very interested but point 2 was the deal breaker for me
Mr.iphonerulez
For your information Lamborghini is being sold in India.Its not that we cant afford Iphones. We can get much better phone than dat, and still at a lower price. But I think u r the loser. U r ready to pay for a phone which is robing u in d daylight. U r goin for look and feel of the phone. but not quality. Ya, d UI of iphone is unmatchable. But at a heavy price. u r locked o that phone. no video, no ble tooth sharing, no message forwarding. You can’t change the connection. you cant increase the memory. What the hell? Y to buy such a phone a such a high price. I went for HTC P3400 instead of Iphone. It cost me around 200$. n it has all the above mentioned features. It lacks 3G.
Well I thought of buying a iphone many times. But then I was greatly disapointed with my ipod. and I was sure that the iphone will come with crappy software as well. I mean itunes sucks. god knows what softwares iphone uses on the client end. I rather wait for gphone even if it costs more i will buy it. Atleast my jobs does not have a monopoly on the hardware as well as the software. Ipod sucks = i phone sucks.
Who cares whether they want the iPhone or not. It’s their loss. Let India stay the land of the $10 Nokia and the $300 Acer. If they can’t afford iPhones then that’s just the breaks. At least they’re smart enough to know that running water, food and electricity comes before iPhones.
If Lamborghini started selling cars in India, they’d be a sales failure, too. It’s not that Lambos are junk or that an Indian can’t appreciate it. They just flat out can’t afford it. I wouldn’t expect Lamborghini to put out an affordable Indian Gallardo just for that market.
Screw it. There are just some things that are out of reach when you live in a world of poverty. No concessions need be made by Apple. Just accept the poor iPhone sales in India and move on to where people can afford it.
Indians are extremely price conscious - value buyers to the core. They will not buy something that sells for a fourth of that price elsewhere, and will sell at that price later. Indian cell providers are still in the subscriber-grab phase, will hop on to iPhone as it gets cheaper!!!
PED!
You’re letting us down: “If so, it may have a lot of unsold iPhones on its hands come January.”
How could you write this sentence? Apple’s partners have this problem. The partner’s OWN the UNSOLD phones, not Apple! Apple is OK; it has the money in its pocket.
Come on PED. Wake up already.
ex ped: Good point. Will reword.
Personally I think Vodafone and Bhartitel got greedy with their pricing and are trying to push off the blame on Apple. Before the launch they responded to SMS inquiries about pricing with substantially lower figures like Rs 22,000-something. This may have been salesman opinion but was certainly misleading. When the iPhone launched, Vodafone stated that there would be enough customers paying the inflated price because the iPhone was not for everyone. Right… Only for those oblivious to the scammy nature of all this.
Then there’s the other thing that goes on in India. When shopping for a Sony Wega, we noticed it had the lousiest picture quality of all brands. Knowing it was superior, we made a few adjustments that improved the quality to where it should be. Yet, after getting the Wega, when we saw that section again, the Wega quality was reset to the bland fuzzy picture we had first seen. And this is in a well known department store in Mumbai.
I would not be surprised if the competing brands stay on top with kickbacks and not quality, in the phone market as well.
come on. some facts please. if this IS true then it makes it even more remarkable that apple was able to sell 7 million iphones last quarter. If the largest cell phone market was not participating, then global demand for the iphone must be absolutely enormous to be able to not only make up for the Indian short-fall, but also to blow past ALL sales estimates by huge margins.
Baloney!!
Iphones have been selling in India even before its official release.
There are no numbers only hearsay supporting this thesis.
iPhone 3G may launch on India’s Bharat Sanchar Nigam Ltd (BSNL’s) 3G network in December. Look for better pricing from BSNL vs Vodafone and Bharti Airtel.
http://idannyb.wordpress.com/2…network-in-december/
We may see another lower priced iPhone model for the India’s pre-pay market sometime in 2009.
What about iPhone in China? Things are moving fast - http://idannyb.wordpress.com/2008/11/13/official-iphone-3g-in-china-coming-soon-we-think-so/
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Silicon Valley veterans like to joke that Steve Jobs must be surrounded by a reality distortion field; if you get too close to him, you start to believe what he's saying. Thanks to the success of the iPod, the launch of the iPhone and the renewed interest in the Mac, Apple has made believers out of millions of customers - and made a lot of investors rich. But Philip Elmer-DeWitt believes that an ounce of skepticism never hurts when writing about the company. He should know. He's been covering Apple - and watching Steve Jobs operate - since 1982, first for Time Magazine, then for Business 2.0, and now for Fortune.
Dear Potax from West Lafayette and iphonerulez from Brooklyn
I understand your frustration about getting fooled (again and again) by service providers into buying some crap (ofcourse if you cant use 3G on EDGE…I guess you won’t understand this either) for $200. And on top of it we can’t do anything about it in US. I sympathize and empathize with you at the same time. But look, lets do a simple math. Lets imagine you actually bought your I phone for $500 (like affluent people in India are paying), which I am sure people here in US are not paying. Now multiply this with 11,000 ..ok ok I’ll make this simple. Answer is 5.5 Million Dollars. While the $20-30 phone from Nokia you have been bad mouthing, in 1 year alone Nokia sells 13million of then in Indian subcontinent…now to make math even simpler…that number of Nokia phones alone is more than the amount what apple got in dollars! Bingo!!…See what I mean here.
The question is NOT why didn’t Indians buy i-phones, bigger question is why do we get fooled in US when rest of the world can see what Apple did??
We can issue vicious rebuttals about all the countries and cultures across the globe all day long no one is clean when it comes to fighting with a PIG but when it comes to making money, do your Math and you’ll make money and don’t get jealous :).