The basic model of iPhone 5C, which has hardware similar to iPhone 5 but in a plastic body, will be available for $99 (on contract) in the US. But don't get mistaken by the low price. In India, the device is expected to cost around Rs 40,000.
The $99 is a subsidized price and is applicable only when a consumer buys the phone along with a two-year contract with a telecom operator. Almost all smartphones in the US and some other developed countries like the UK are sold on the contract basis. The device manufacturer, which in case of iPhone is Apple, and telecom operators enter into a partnership. The telecom operator pays the full price of the iPhone to Apple. It then sells that phone at a subsidized price but recoups the money through the services and data plans that a consumer has to take as part of the two-year contract.
The phones sold through contract system are locked and work only with the network of one particular telecom company. People who don't want to buy the locked devices can pay the full price and buy unlocked versions. In case of iPhone 5C, the unlocked version of the device will cost $549 in the US. This price is also a better indication of its expected price in India when it is launched here in the coming months.
In India, iPhones have been usually priced 20% higher than their unlocked price in the US. In case of iPhone 5C, this works out to around Rs 40,000 at the current dollar-rupee exchange rate. Another indication of iPhone 5C price in India is its price in China. Apple has revealed that in China the device will cost around $730.
Apple has lost share in the global smartphone market in the last few quarters due to the popularity of Android phones, which are affordable and come with appealing features like a large screen. Analysts had hoped that iPhone 5C would make the Apple phone more affordable. But, its price has taken them by surprise. "The international price seems to be on a higher side," said Manasi Yadav, principal research analyst with IDC.
Analysts said if iPhone 5C comes in India with a price tag of Rs 40,000, consumers are likely to ignore it in favour of similarly priced Android phones because they have better hardware.
Anshul Gupta, principal research analyst at Gartner, said it was clear that Apple still cared about its margins. "This is certainly not the cheaper iPhone. Apple is after margins and not market share... and with iPhone 5C, they are definitely not after consumers in India," he said.
The sentiment over iPhone 5C price was shared across the world. An analyst with Goldman Sachs, which is usually bullish on Apple, termed the iPhone 5C price a "key disappointment" in a note to media.
- Apple iPhone 5C will except 40,000 INR(Indian Rupees) in India.
- Apple will sell iPhone 5C at $549 to $649 without contract.
- Flagship iPhone 5S will retail at $649 to $849 without contract.
- In China iPhone 5C will sell at $730, almost $200 more than the cheapest version of iPhone 5S.
- $99 is a subsidized price and is applicable only when a consumer buys the phone along with a two-year contract with a telecom operator in US.
- Analysts say while Apple's decision to protect margins with 5C pricing may work in the short term, the world's most valuable company my lose market share to Android devices in future.
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