Quote:
Originally Posted by raul Hey guys, no need to get worked up. Put yourself in the place of an Airtel/Vodapahone product manager and think this through.
What is your primary purpose? Sell more phones or profit? Profit. So you can sell less for a higher prices or more for lesser price. The point is the profit.
Here Apple is trying to reach ten million so it could have an influence in eventual pricing but its not unusual for companies to price higher in India and adopt the cream strategy because of the wide disparities in income levels here, as in the market for a product at a particular price is limited and this demographic is not price sensitive so you can increase prices and make more profit by marketing as a lifestyle luxury product. The product doesn't necessarily have to be a luxury lifestyle product but by pricing higher, limiting accessibility and appropriate advertising you position it as such.
What is the demographic and numbers for smart phones in India and the numbers in different price ranges, what feature set is sold for what price, what is the sweet spot? Targeting affluent college students, young professionals, business users, luxury lifestyle market, a mix or all? All this will impact your final price. At 15k the market size may be 100,000 and you make 1k profits, at 20k it will go to 50,000 and you make 6k profits and 25k to 25000 and you make 10k profits. Now people who are in the 25k band may not be price sensitive and may pay 30k+ for an 'exclusive' product, the product doesn't have to be exclusive, you can make it so by pricing high.
So all these factors come into play. Then there is also usage, since an iPhone without data is useless operators will be expecting higher ARPUs from iPhone users, and that might tempt them to price more reasonably and reach a wider market and make money from services.
So if you were a product manager what would you do? I would price at 15k/20k for 8/16 GB to reach the highest number of users and I suspect this is about the price range it will be launched at. The economy is also not doing too well, the IT sector which is a big demand driver is already feeling pain and with the US/Western banks in disarray who form a large chunk of Indian technology companies market it will get worse in the short term. So outrageous prices now will not cut it. |
If I was the manager who had to make a decision, I would have given the consumers two choices:
a: iPhone 3G without a contract for 25k plus OR
b: iPhone with a contract and plan-lock for about 16k and monthly plans starting from 800 bucks including unlimited Edge. To circumvent the risk of laws not being so strict in India and to stop people from breaching contract, collect a deposit of around 5-10k which would be deducted from monthly bills.
Everyone keeps saying AT&T can subsidize as they earn more from monthly rentals. Although its not totally wrong, but thinking about it AT&T also has to pay more than Airtel or Vodafone in India, be it for the infrastructure setup/maintenance or salaries of employees working for them. Not to forget the average annual income of people in US. So it would be only fair if we don't compare the two markets as they are completely different.