Apple Curry Favors India

What would you do in the country that has only 4% of its population that earns more than $5 per day to eke out its existence if you wanted to sell in that country? Normally, the laws of economics would tell you to adapt your product to the market show its strengths and provide a strong selling point to boost your sales. But, we all know that economic theory is only for the text books and the school kids. Since when did economists even believe what they actually said? Since when did economists even say what they thought without someone else turning round and proving the exact opposite the next day? Well, now Apple has decided to sell its iPhone 5S not cheaper, but even more expensive than in the US for the Indian market in particular and they are now relishing at the idea that they could spice up their accounts with sales in the country.

Apple’s theory is against what has traditionally happened in India with regard to the sale of smartphones.

  • The average smartphone sold in 2010 for the price of 30, 000 rupees ($480).
  • Then, Apple decided to take that one step further and sell its iPhone 4S at 40, 000 rupees ($641).
  • Since they have brought out their iPhone 5S in India on November 1st 2013, they have been selling it at a recommended retail price of between 53, 000 rupees and 72, 000 rupees.
  • That’s between $850 and $1, 155.
  • The iPhone 5S costs $199, $299 and $399 for the 16GB, 32GB and 64GB versions in the USA today.

The iPhone may be the must-have thing; although the cost of an iPhone is way off what the real expenses incurred add up to.

  • Apple may only have 10% of the market for smartphones these days, but it rakes in 50% of the profits that are available in the industry.
  • It can’t be the labor costs that increase the price of the iPhone.
  • The people that are paid in China to manufacturer the phones are paid an average hourly wage of $1.78.
  • The real cost may include the fear of being fired if they set off alarms in the security gates they have to walk through and living in dormitories and in squalid conditions.
  • Estimates show that the cost per iPhone of each worker is about $12.50 today and that’s hardly a high percentage of the total cost.
  • That’s all so Apple can sell us the iPhone at an extortionate price of hundreds of dollars. The components are only worth a measly $188.

Today Apple is banking on Indian prestige-seeking. If it makes the iPhone expensive, then the wealthy few will want it even more. It’s the country of ostentatious show and conspicuous consumption par excellence. Now, the others are following suit as any manufacturer selling in India certainly believes that if they sell their smartphone at a lower price than the iPhone, it will be seen as worthless, cheap and low quality. It might just bring in 10 billion rupees for Apple between now and the end of the year. Yes, that means in just a few weeks.

Maybe it’s all about conspicuous consumption, but it certainly has a lot to do with invidious consumption and creating that must-have-look-at-me product that you hold in the hand creating the envious gaze of the poor people as you walk on by. It’s superior socio-economic status these days wherever you are. If you’ve got it, it’s flauntable.

Exploiting the masses is one thing by raking in the millions for the benefit of purely commercially gain is something that we question no longer. An Apple a day keeps the Treasury department at bay. Clearly Apple is synonymous with making money (which in itself is alright when the company is a commercially business). They are not in it for charity.

But, the factory workers are being driven like slaves and the masses in the West have been turned into enslaved consumers with the purchasing of Apple phones at extortionate prices. It’s highway robbery to the power of millions these days.

Apple never cared about anything else but improving the quality of the phones and they had no qualms about getting that any which way they could.   Now it’s the Indians that are going to pay for the scam.

About The Author

tothetick

Professional team of writers/analysts analyzing the financial markets.

Comment on Facebook

Leave A Response

* Denotes Required Field