TechyTrends

August 22, 2008 saw the entry of much hyped iPhone 3G in India. The launch was limited to few cities where it was expected that consumers would indeed line up as in the Western World to grab the revolutionary mobile phone model by Apple.

While few people indeed queued up outside the retail shops in few places, they were surprised to know that there was no one ahead and behind them in the queue. And the same response from consumers continues to hold almost true even after so many months of the launch.

The consumer feedback to iPhone in India is indeed surprising. Because it was expected that Apple would gain significantly from entry into Indian market which is one of the most lucrative mobile services market in the world.

But the hope crashed soon after the launch. No one had had anticipated such a thumbs down response from consumers in India to a gadget which has bagged so many accolades and awards globally for its path breaking product.

So what failed iPhone in India.?

The answer to this is certainly the marketing strategy employed by Apple in India for the iPhone 3G.

Firstly Apple launched iPhone 3G in India at a time when 3G was not even present in India. Its partners in India, Airtel and Vodafone too do not offer 3G services. So even if the handset was compatible to offer 3G services it was of no use to the end-user who did not had access to 3G services.

Secondly Apple had mainly followed a strategy if tying up with a single operator in a country. For instance Apple offers iPhone in USA in tie-up with AT&T. But in India Apple chose to tie-up with multiple operators i.e. Airtel as well as Vodafone.

iPhone in USA was offered initially for $ 199 monthly rental and host of other VAS mainly procured by the consumers through Apple’s App Store for iPhone. In India the iPhone has not been positioned as a value for money product. The price range coupled with the fact that data services are primarily being positioned around iPhone both by Vodafone and Airtel has resulted in a scenario where the iPhone is confined to a limited market. This has greatly shrunk the addressable market of the model in India.

Moreover the marketing of iPhone has been very limited in India. For the operators the iPhone is just another bundled service offered to the subscribers. Compare this with the market situation in USA especially where operators are now building their business case around iPhone. AT&T for instance is greatly dependant on iPhone now. The company is incurring tremendous margin pressure due to its iPhone offerings. But the trade-of sounds profitable as the company has been notching up new subscribers rapidly. The lock-in period ensures that the company would not face customer churn significantly for atleast two years.

iPhone has crossed 10 million mark globally since its launch last year in June. But in India there is still no clarity on the number of takers for the popular model. Indian operators Bharti Airtel and Vodafone declined to comment on the performance of iPhone when queried by TelecomTiger.

The failure in India has also resulted in loss of revenues from App Store, the VAS stores set-up by Apple. In the event of few takers for iPhone it makes the feasibility of rolling out App Stores that much more difficult for Apple.

Apple is expected to announce a new version of iPhone for the global markets very soon. In fact the company is also speculated to be planning a range of iPhone models.

Apple is yet to enter China. The operators in China are clear on the business model for iPhone and are demanding higher revenue share from Apple. They also want a share of revenues generated out of App Store.

The Indian consumers have proved it that they won’t vie for a product purely on the hype surrounding it. They want a justified marketing offering revolved around the product or the service.