Friday, April 27, 2007

Cheap Phones in India?

There's an interesting article on how the iPhone could provide some pricing power to the vendors on Telephony Magazine's website: The iPhone effect.

I do agree that the iPhone could bring pricing power to the vendors. All the me-too phones will be priced close to the $350-$450 range. Looking at WiMAX I feel like reviving the concept of a killer device! The killer app for personal mobile broadband is certainly checking email/gmail, finding local Google Maps (which hopefully is integrated with the GPS). Mobile TV will be a hit once the power/battery issue is resolved, i.e. either new more powerful batteries come out, or watching mobile tv in a place where the device is powered externally, either in a car, coffeeshop or a friend's home...

But I am not convinced about the observation made in the article, and in numerous other articles & analyst reports, that phones in the developing world are sold at low prices. A lot of the middle-class people I know in India buy their phones outright, with no carrier subsidies. And the phone prices typically range from Rs. 10,000 to Rs. 20,000. That is about $220 to $440 @ Rs.45 = USD 1.

And these are not high-end phones, but phones very similar to the 'middle-end' phones that we in the US use.

Obviously this is a large investment for a (economically speaking) middle-class person, but this is the largest cellphone segment in India right now. The lower-class user base (the drivers, peons, small grocers, ), who buy the really cheap and often second-hand phones, is growing pretty fast.

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