Why the iPhone doesn’t rule in India

This recent news report stated that Apple has found the going tough in the Indian smartphone market. Smartphones offered by RIM and Nokia outsell the iPhone by a ratio of 1:6 and 1:18 respectively. Analysts have offered two reasons for this “anomaly”. First, it is suggested that India lacks the wireless infrastructure to support the main features of the iPhone. Second, analysts claim that the Indian consumer is not mature enough for luxury products like the iPhone. The iPhone is a phone for the classes, not the masses.

Apple accounted for 2.6 per cent of India’s smartphone shipments in the quarter ended June 30, trailing RIM’s 15 per cent, Samsung Electronics Co.’s 21 per cent and Nokia’s 46 per cent, IDC estimates.

iPhone, iPhone 3G and 3GS

Image via Wikipedia

While the above points may hold some weight, another major issue seems to be that Apple is not offering enough value to the discerning Indian consumer. Apple wants to charge a premium in the Indian market, but the Apple Experience, that it is so famous for, is missing. Let’s elaborate.

First the price premium. The iPhone 3GS retails at 20,000 rupees. That is around $400 as per the current exchange rate and around $1600 as per rough PPP calculations. Compare this with Android, RIM and Nokia offerings that start at less than half the price.

The cheapest iPhone 4 costs $705 at Reliance’s iStore, while the cheapest iPad 2 sells for about $603. In Apple’s US online store, the iPhone 4 starts at $199 with an AT&T Inc contract and the iPad starts at $499.

BlackBerrys under $200 made up 40 per cent of their shipments in India in the quarter ended June 30, said TZ Wong, an analyst for IDC.

Second, the missing Apple Experience. There are no Apple stores in India. If one wants to buy an iPhone, you buy at full price (with reverse subsidy) from a carrier, or visit an Authorized Reseller (which have many locations) or a Premium Reseller (who have less locations). There is no online store. At a typical showroom of an authorized reseller, the iPhone would be one of around 30 smartphones on display. It would be the most expensive smartphone on display. Some of its accessories would not be available for sale at the same site. And one would need to set up the phone on your own computer. If you don’t have access to a computer, well you may have to take it to another location (a Premium Reseller) to get it set up.

If you decide to take the plunge and buy an iPhone, you still don’t get the full Apple Experience. If you need to get your phone repaired, you will need to take it to a Authorized Service Center. The authorized reseller from whom you purchased it cannot fix it for you. There aren’t many service centers going around – for example, only 5 service centers in Delhi fix an iPhone. That’s about 1 service center per a potential 8 million customers (there are 41 million mobile subscribers in Delhi). Once you get to the Service Center, you will find out that they only repair stuff during a fixed 5 hour window, on weekdays. You cannot call them to fix an appointment, you cannot set one up online. Once your drop off your iPhone, they will give you a time when you can come and pick it up. Till then, you are without a phone.

Oh – and by the way, if you are visiting India and your iPhone needs service – tough luck. They don’t honor the warranty on an iPhone that is not purchased in India.

Compare this with the near magical experience in an Apple store and one might start to understand why the Indian consumer is not sold on the iPhone.

However, the Indian smartphone market presents a great opportunity to Apple. It is the world’s second largest cell phone market with 602 million subscribers and 866 million mobile connections. Smartphones are expected to take off in a big way. And with the advent of the iPhone 4S, coupled with a cheap iPhone 3GS, one can expect Apple to start increasing its share of this high potential market (more on this later!).

Smartphone shipments in India are poised to jump almost eightfold, or an average of 68 per cent a year, to 81.5 million units by 2015, according to IDC.

Read more at Tough for Apple selling iPhones in India: IDC – The Times of India.

India reaches 900 million phone connections

India had nearly 900 million telephone connections at the end of August, signifying a tele-density of 75. 866 million of these were mobile connections, of which 70% were active subscribers. Urban mobile tele-density was 158. There are still ample growth opportunities for mobile services providers in rural areas. Reduced growth rates (less than 1% increase per month) reflect increasing saturation of urban markets.

Map showing the population density of each dis...

Image via Wikipedia

Read more at India adds 7.3m mobile users in August; total at 866m – Reuters -.

India going LTE

India is going LTE. Close on the heels of Bharti Airtel’s plans for an LTE roll out in Kolkata, Reliance Industries has announced that it will be rolling out a pan-India LTE based 4G network in 2012.

Mukesh Ambani during World Economic Forum 2007

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Reliance’s choice of LTE as the basis for its 4G offer is significant, ending the hopes of backers of mobile WiMax that their standard could become the basis for services in one of the world’s largest mobile services markets. Reliance has reportedly been trialling TD-LTE with Nordic vendor Ericsson since the early part of 2011.

Currently restricted to data services, Reliance plans to entice customers with tablets starting from $60. It is expected that telecom policy changes will eventually allow companies to offer voice services via VOIP.

It plans to provide data connectivity with speeds of 50-100 Mbps, much faster than 3G services currently on offer, at cheaper prices.

Read more at India set for first 4G services with Reliance Industries in pole and Mukesh Ambani readies plans to roll out 4G data services, low cost tablets in 2012 – Economic Times.

Good week for 4G LTE

Last week was a good week for proponents of LTE. In the US, Sprint announced that its current WiMax based 4G network will be replaced by a LTE based network by 2013. In the UK, initial trials of the LTE based 4G network are underway in Cornwall. And in India, Bharti (the largest operator in India and the 5th largest in the world) was reported to have commenced a LTE rollout in the Kolkata circle.

LTE (Long Term Evolution) holds  great promise as it can enable download speeds of nearly 100 mbps while on the move and stationary download speeds of around 300 mbps. This can enable technology leapfrogging by allowing rapid adoption of high-speed broadband in non-urban areas, without the high costs of fixed line infrastructure.

Read more at Bharti taps China’s ZTE to begin 4G roll-out in India – The Next Web4G LTE broadband trial kicks off in rural UK – The Next Web, and Sprint Is Ditching 4G WiMax for 4G LTE: What It Means for You.

Accessing Facebook through SMS

A Dutch firm has introduced SIM cards that enable users to access Facebook through SMS, with no need for a dataplan. This has been introduced as a subscription service in Argentina. Implications for this in India are immense, with the large installed base of 600 million mobile connections, rapid growth in FB adoption and low SMS prices. 50 rupees ($1) for all you can FB without a dataplan is conceivable!

 

Read more at Facebook for SIM uses SMS; no data plan required — Mobile Technology News.

BT Openreach to offer 300 mbps broadband in UK

The UK will get 300 mbps broadband speeds next spring. BT Openreach, which manages backend telecom infrastructure, will deliver these speeds through fibre connections to customer premises. Customers with existing copper connections will also be able to get their speed bumped up to 80 mbps. This will further improve the UK’s 10th rank in the global ICT index through increases in both the penetration of broadband (currently at 31 per 100 people) and in the highest possible downstream speeds (currently at 41 mbps).

BT Openreach van. (Vauxhall Vivaro)

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Read more at Openreach to transform broadband speeds.

Apple leads the App Wars

Apple is winning the App Wars across several metrics. As seen in the below infographic, there are more than 450,000 apps for the  iPhone and iPad combined and 71% of the iPhone apps are paid apps. Android is a clear number two in the $15 billion App market.

Infographic via WebpageFX.com

Indian call center industry no longer the biggest

More people work in call centers in the Philippines than in India. The growth rate of India’s call center industry has slowed as it faces demand and supply side pressures. Many clients are moving work back onshore, operating costs are increasing and the jobs are loosing their luster.

An Indian call center

Image via Wikipedia

India now faces stiff competition from the Philippines, according to recent research from IBM. The study for the Contact Center Association of the Philippines estimates that 350,000 Filipinos work in call centres, compared with 330,000 Indians.

via BBC News – India’s call centre growth stalls.

Indian consumers can say NO to pesky telemarketing calls/SMSs

The Telecom Regulatory Authority of India (TRAI) has come out with ads that inform mobile customers of new rules about telemarketing calls and SMSs. This will be a welcome relief to harried consumers who are subject to a flood of unsolicited messages and calls on a daily basis. However, the TRAI has also put a restriction of 100 outgoing SMS per day for pre-paid and 3000 SMS per month for post-paid plans. This may affect operator revenues negatively as SMS is a highly favored communication medium among young adults across the world. For example, the average American teen sent 3339 texts per month in 2010 (4050 for women and 2539 for men).

 

Image via Times of India