Fighting Android, The Apple iPhone Strategy

It is easy to see an Apple iPhone selling for $199 and feel that it affordable. Or for that matter any phone selling the US. Only when the same super-out-of-the-world-phone launches in an unsubsidized form, we know the actual price for the same. Cutting the price of an iPhone 4 from $199 to $99 isn’t much, if you see the larger picture that is a 15% cut in price, not 50%. Specifically from an Indian perspective, the USD has gone up by more than 15%.

Apple iPhone 3GS

Apple won’t make cheaper iPhone models. They do not believe in that. Nor would they license iOS like what Google does with Android or more appropriately what Microsoft does with Windows Phone. So how else can they take a hit at the 500% growth that Android has seen in India and several other countries? 1

Simple, keep the older gen iPhones in supply and keep making them cheaper. That’s what Apple has done for a long time in US as well. Just that with the 3GS continuing for 3 years, the strategy is much more aggressive now.

Apple believes that hardware specs of a three year old 3GS is still good enough to sell today and given many around me are using it, that isn’t false. I am using the iPhone 4 that is a couple of years old and I am pretty happy with it. I wouldn’t mind keeping it for some more time. And if I am fine with that, an average consumer sure is. If the iPhone 4 arrives for Rs 20,000 or a bit more in the near future, I am sure it would sell in very good numbers.

But there is a small disconnect and that is more behavioral in nature. People don’t want to be seen using an OLD phone. Or put another way, people want NEW, even if it is slower, not as smooth and isn’t running the best in the class software. The factor that works for Apple here is the brand name. The iconic iPhone title that people have always wanted but couldn’t afford.

With the 3GS at Rs 9,999, either you are buying an iPhone or your are buying a new Android with old OS. Your choice!

1 – the underlining assumption here is of course that Android sells more because it has a variety of manufacturers churning out devices at every possible price range.

Annkur P Agarwal is a contributing editor with OnlyGizmos

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