IPhone: The super brand of the decade

August 22nd, 2008 - 1:51 pm ICT by IANS  

It’s the coolest design on the planet. It’s the super brand of the decade. And it has come to India - at midnight. The iPhone, like so many things Mac, defies logic.Apple products, pulled out of Steve Jobs’ jeans at Macworld expos, tend to get fans screaming and queuing up, cash in hand, a day before launch. Experts point out missing features and flaws, but they don’t care.

They must have one.

At over Rs.31,000, the iPhone will sell in India at over three times its US price of $199. If you list the features, you can get them at less than half the price.

My little old Nokia, for instance, has the same two megapixel camera and 3G support, and even BlackBerry service and video recording (the iPhone has neither).

But that’s missing the point. You’ll pay for the uber-sexy design and interface, the brand, and the hype. And if you’ve been waiting for it two years, you’ll shell out Rs.31,000. You can console yourself with the pretty good assisted-GPS thrown in.

And you’ll ignore the gaps, because it’s so cool to flaunt an iPhone and its amazing multi-touch interface and outstanding display and music-hey, it is a video iPod at heart.

Sure, you can’t change the battery if it dies. You can’t record video. You can’t use an SD card to add more memory. You can’t use most enterprise apps.

So why will Apple and the carriers price this phone so absurdly high in India?

I don’t know. But I expect it’s for ultra-premium positioning, skimming the market, and allowing a whopping margin to the carriers-so that they agree to do all the marketing for Apple.

The only other such deal done by Airtel and the other carriers was with BlackBerry. The handsets were priced sanely there. But the telcos then had the promise of higher monthly revenue, around Rs.1,000 for the BlackBerry service.

There’s no such special service requirement for the iPhone, until 3G comes in (2009). And though they’ve created different tariff plans for the iPhone, the additional monthly revenue isn’t comparable to Blackberry service.

I’m hoping the higher charge will also cover better service, but I don’t really believe that for a minute. We’re used to poor service and support. For instance try getting a spare battery or service for an expensive BlackBerry handset, and you’ll know what I mean.

But in India, people do expect to service phones and keep them running indefinitely, and a whole cottage industry usually fills the gaps. I expect the corner shops will change iPhone batteries too, at a price.

While Apple’s skimming strategy will work for a few months, it will also ramp up a thriving grey market, where the phone will be available - unlocked - at less than half the price.

And I have colleagues already calling dealers to find out when they’ll stock ‘cracked’ grey-market models for Rs.15,000, and those who’ve already placed orders with visitors to and from the US, after hearing the India price.

Did Nokia and the others losing sleep over the iPhone? I’m sure they did, and worked on frantic plans to counter it, and I’m equally sure that they have relaxed somewhat after hearing about the price, which puts it in a premium niche that will not make a dent in the eight-million-odd phones selling monthly.

Nokia is countering the iPhone with the N96, priced at 35k for 16GB, but with features to beat the iPhone: from a 5 megapixel, Carl Zeiss equipped camera and video recording to DVB reception (not yet available in India) and, of course, flexible storage and a swappable battery, as with most smartphones today.

But the N96 is not an iPhone, and that’s where Apple scores and hopes it will skim the cream, the thousands patiently waiting for two years for the world’s coolest gadget. The pricing will drop-maybe by year -end, perhaps even at the fall festive season.

But well before then, you’ll see iPhones in a lot of hands, young and old.

(Prasanto K. Roy is chief editor of CyberMedia’s business publications. He can be reached at pkr@cybermedia.co.in)

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