iPhone 3G was launched amidst high fanfare in developed parts of the world with consumers queuing up for hours to get a first hand experience on the highly desired handset. There were stores across the world where the iPhone 3G sold off like hot pan cakes and retail shops ran out of stoke of the product. It was amidst this that Apple announced its plans to launch iPhone 3G in India in alliance with Vodafone and Airtel.

Consumers in India finally had a reason to rejoice as the launch was almost coinciding with the global launch deferring by only few weeks. Consumers had earlier felt let down when they did not got a chance to experience the first version of iPhone. The highly interested consumers resorted to grey markets to procure iPhones. Bharti and Vodafone announced advance booking schemes for Rs 4000 to cash on the iPhone 3G hype prevailing during the global launch. The final price of the model was still unclear but consumers largely felt that it will be near about the same price as that offered globally i.e. $199.

On August 22, 2008 the iPhone 3G was launched in India which was considered to be a high profile media event. But then came the dampener. The tie-up announced that iPhone 3G will be priced at Rs 31,000 for the 8GB version and Rs 36,000 for the 16 GB version.

It came as a cruel shock to Indian subscribers who were looking forward to migrate to the revolutionary iPhone models.

It leaves one wondering to know the reason behind such an alliance between operators and Apple where the operators are almost functioning as mere resellers of the iPhone unlike in global markets where Apple-Operator alliance provide advanced VAS to mobile subscribers.

The obvious and absolutely just question bothering the consumers is why the iPhone is priced so high in India.

Globally Apple has followed a model whereby the handsets are offered at subsidised rates mainly banking on the premise that more revenues may be earned from the VAS offerings and the subscribers are locked in for a predefined duration with the service provider. iPhone 3G was offered for $ 199 in most parts of the world i.e. roughly for a figure close to Rs 8000.

Indian mobile subscribers want to know what special offerings are Airtel and Vodafone offering which is exclusive only to iPhone subscribers. They want to know if the services are of similarly advanced level as those offered globally. The Apple-operator alliance also needs to answer at first place as to why the iPhone 3G is being offered when 3G services are not available in India. It is like being charged for a meal at an AC Restaurant when the AC itself is not working.

Additionally marketers are also confused with the iPhone positioning in India. Globally iPhone is being perceived as a value for money feature-rich smartphone. But in India the positioning has turned to be a premium segment product. This contrasting positioning is mainly due to the premium price being charged in India. Observers say this might prove detrimental to Apple in India if ever it decides to offer the products competitively priced since it will lead to confusion of positioning among the consumers.

Analysts associated with the handset industry also say that Apple has also lost a rare opportunity to challenge Nokia’s hold in the Indian market. Majority of these analysts feel that it made sense for Apple to follow the volume driven model in India rather than offering the iPhone at a premium in India. They say that grey market for iPhone in India will flourish under the present scenario.

Indian consumers have a strong felling of being left out to global peers when it comes to introduction or launch of new telecom services or products. With Apple launching iPhone 3G in India barely a month after the global launch, the mobile subscribers felt a sense of relief that for a change they won’t have to wait too long for the experience. But in the end it is the price shock which has left them bitter. Consumers can now continue with their prevailing handsets and buy an iPod instead. It works out to be cheaper.