Iphone Price

What is this Apple...?

Yes, the iPhone 5s and iPhone 5c are expensive. Why, did you expect otherwise?

The news of iPhone 5c (Review I Pictures) and iPhone 5s (Review I Pictures) prices in India went viral earlier this week as speculation turned to confirmation a day after the leak. Going beyond the typical bartering-of-body-parts-to-buy-an-iPhone joke, we saw some creative entries on Twitter among the many people who raged against Apple.

I'll confess - I too was part of the fanfare, taking some potshots. And why shouldn't I? Smartphone costs have been soaring sky-high since the past few years; before the iPhone 4S launch in November 2011, smartphones used to cost as much as Rs. 30,000. Then in the last two years, that bar was raised to Rs. 40,000. Now this year it is Rs. 50,000 with the likes of Samsung Galaxy Note 3 and Nokia Lumia 1020 flirting with the mark, before the iPhone 5s well and truly crossed that mark. But we had plenty of warning about this.

The first indication was in the India pricing new iMacs launched last month. The whopping Rs. 14,000 jump for the base model was a clear sign of things to come. But one important thing to remind all the ranters is that the weakening Rupee has shown no mercy to any electronics manufacturer.

But one big difference here is that brands other than Apple are very likely to drop the price of their phones over the course of their lifespan. In fact, they already have - the Galaxy Note 3 and the Lumia 1020 currently are available online for Rs. 47,000, having launched closer to the Rs. 50,000 mark. But, if the past trends are any indicator, it is unlikely that Apple will change the price of the iPhone 5s until the next-generation iPhone is launched next year. That's what the history indicates - the iPhone 4S launched in 2011 started at a price of Rs. 44,500 and stayed there till the iPhone 5 replaced it in 2012 for Rs. 45,500, which is the price that it was available for until the announcement of the new iPhone.

If you look at the INR-USD equation closely, the price increase was inevitable. On November 2 last year, the day the iPhone 5 was launched in India, 1 dollar was equivalent to 53.6 rupees. The day the iPhone 5s was announced globally (September 10) the corresponding rate stood at 64.7. The day Apple announced that the iPhone 5s is coming to India (October 10) and the day the prices were officially announced (October 16) the figure stood at 62.2 and 61.6 respectively. While the iPhone 5s costs the same as the iPhone 5, in dollar terms ($649), in rupee terms the price increase is anywhere between Rs. 5,200 and Rs. 7,200, depending upon which date you pick to calculate the equivalent price. Add that to Rs. 45,500 (the iPhone 4S price) and you are not too far away from the iPhone 5s MRP.

Bear in mind that the price is likely to have factored in currency fluctuations, given the rupee's volatile recent history. The iPhone 5s' price doesn't look crazy now does it? We can argue about it all we want, but having seen the numbers myself, I feel there's very little chance that the phone could've been priced any cheaper.

The iPhone 5c's price is very "reasonable", and quite aggressive, by Apple's standards. Using the same exchange rate as the iPhone 5c, the price of the iPhone 5c should've been around the Rs. 45,500 mark, the same price at which the phone is available for in China (4488 yuan). In fact the price of iPhone 5s is nearly identical in India and China, so by pricing the iPhone 5c at Rs. 41,900, Apple is hoping to reach the more value conscious buyer (yes, I know how ridiculous that sounds for phone that costs over Rs. 40,000). Another way to look at the iPhone 5c is that it's a phone that encloses all of the iPhone 5's hardware plus a better front camera, slightly bigger battery and India-ready LTE support, but without the premium aluminium-glass packaging, and costing a few thousand Rupees less than what used to be the Rs. 45,500 iPhone 5 India price.

In closing, what remains to be seen is whether people will still buy the new iPhones despite all the complaints about the price, or will Apple finally be forced to break tradition and dip the price to more "acceptable" levels