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HindustanTimes Wed,22 Oct 2014

Apple may stoop to conquer India

Madhavan N, Hindustan Times   September 16, 2013
First Published: 00:41 IST(16/9/2013) | Last Updated: 00:46 IST(16/9/2013)

The hype surrounding Apple products is such that “pre-ordering” and things going out of stock lend a special mystique to it. It kind of makes customers who buy the products early feel like winners and the others like losers.

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This column today is about the mystique that is running into a new challenge — and opportunity.

Last week, Apple unveiled an upgrade of its operating system iOS and also two new models, the iPhone 5S and the 5C. The 5S is, of course, for the high-end customers who grab the best/latest, but the focus for nations like India should be on the 5C, intended to be a cheap iPhone. As I joked, this is an oxymoron, like an “affordable yacht”.

The pricing got us confused more. The iPhone 5C is priced at about $100 (Rs 6,350) for the 16 GB storage model when it comes with a telecom contract in the US but it is as high as $560 (Rs 35,500) when it is unlocked and without a contract.

C’mon, why would anyone pay Rs. 35,000 or more for a lower-end iPhone? Is Apple fooling people? The 5C is intended (as the belief largely goes) for Apple to take on rivals like Samsung in Asia.

Typically, Apple has to maintain an “unattainable” mystique and the imposing price — as I see it — is part of the brand strategy to give people an impression that is expensive. In Stage II, I expect Apple to team up with Indian telecom service firms and also drop the price at the same time.

Also, earlier versions of iPhone are selling even cheaper in the US, at throwaway prices with telecom plans. So I expect Apple to carpet-bomb the lower end of the markets in league with service providers by Diwali. I think Apple wants to have the cake of an upscale model and eat it too by playing the game at the lower end and retain its profit margins.

In short, the game is shifting to distribution strategy. It should be fun watching what Microsoft and Samsung do on that front — or not!


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