For many, Apple’s highly anticipated event yesterday was to be the answer to everyone in India, China and everywhere else in the developing world who craved some iOS magic in their life. Not to mention that it was expected to completely blow Samsung and other Android devices out of the water.
Did it? Well, no. Apple’s website, in traditional style, displays the 5c front and center, claiming that the 16GB phone will retail at a mere $99. Potential consumers may be rejoicing as they realize that $99 translates to under Rs 6500, making it their cheapest shot at owning an Apple device. In comparison, Micromax, which has 22% of the market share in India, sells their smart phones from Rs 2500 to Rs 8000.
But there’s a catch: that very same Apple device will cost $549 off-contract.
In China, where one-third of the world’s smart phones are currently being sold, $549 translates to 3359.88 yuan. In a country where that’s about the average monthly salary, buying an iPhone is akin to someone in the U.S. saving up to buy a second hand car.
In India, that $549 price point equates to about Rs 35,000 and that’s not even including the taxes. Ergo, not anywhere close to a cheap shot at owning an Apple device. Again, that means that buying an iPhone means giving up at least a month’s salary – and then only if you’re among the privileged few.
In a country where over 50% of the population falls below the poverty line, splurging on an iPhone, even the new ‘cheap’ version, is akin to soft, rich individuals buying a brand-new top-of-the-line home entertainment system from a top brand-name with a big TV, full surround sound, and a Laz-e-boy for good measure. That is to say, coveted and beautiful, but possibly unnecessary.
According to a recent survey conducted by Upstream, a third of individuals in emerging markets said they would not pay more than $100 for a smartphone. Oops?
For the company itself though, the new pricing presents a silver lining. For consumers in the West especially, the iPhone has never been quite so affordable. Wireless provides like AT&T require a minimum of a 2-year service agreement with a minimum data plan of $20 a month. With that $99 price tag, that means the 5c will cost about $579 for two years, as compared to the minimum of $679 the 5s would cost. This could also be a prime opportunity for Apple to suck in more consumers, enabling a whole new generation of Apple neophytes.
At the very minimum, the iPhone is now at least potentially available to millions more than it ever was, and therefore has the potential to sell more now than it ever has - even if it’s still out of reach for half the world’s lower-income population.