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Strategy to counter iPhone setback
Few Takers

New Delhi, Sept. 21: Apple iPhone distributors in India — Airtel and Vodafone — are shipping their unsold consignments to other countries where they operate.

Industry sources said the two companies had imported around 40,000 iPhones since their launch in India in 2008 but had not been able to sell more than 20,000 units.

“One iPhone distributor recently offloaded part of their unsold consignment to Sri Lanka, where it also operates, and hopes to get a better response,” an industry analyst, who did not wish to be named, told The Telegraph.

India’s No. 1 cellular operator Bharti Airtel is in Sri Lanka for a year and already has one million subscribers.

UK-based Vodafone is in that country longer than Bharti, having launched its service in 2006 in association with Telekom Malaysia.

Since 3G is available in Sri Lanka, chances of iPhones selling well are higher.

India will get 3G, which allows data transfers at very high speeds, enabling users to access applications such as streaming videos, only by October 2010.

In India, iPhones have a good demand in the grey market. “Grey market sales in the country (India) have been higher. Around 60,000-80,000 iPhones have been sold till now,” industry sources said.

The phones are unlocked, meaning subscribers of any operator can avail themselves of the gadget. Prices, too, are lower.

Besides, the phones have been available since 2007, well before Apple announced its India foray, the sources said.

An Airtel spokesperson, however, said, “Apple iPhones are doing as well as any other smartphones in India.”

The company, however, did not reveal sales figures of specific handsets. Vodafone, too, did not comment.

The smartphone market in India, including iPhones, is estimated at 6 million units in 2009, with revenues of around Rs 7,800 crore.

US-based Apple launched its iPhone 3G in India last year. It is planning to launch a faster version — iPhone 3G S — later this year.

Analysts say the new version will sell if the pricing and marketing strategies are suited to India.

“If the iPhone is to increase its sales in India, it needs a price correction and a India-specific strategy which probably aims at larger volumes at lower margins,” said Romal Shetty, telecom analyst with consultancy firm KPMG.

Pricing and locking the handsets to only two service providers had been the main reasons for low sales.

The 8GB version costs Rs 31,000 ($710), while the 16GB iPhone is priced at Rs 36,100 ($825). The corresponding prices in the US are $199 and $299, respectively.

Apple faces competition in India from other smartphones, including those built on Google’s Android operating system, as well as BlackBerry devices from Research in Motion and Nokia, Samsung and LG products.

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