Apple 3G iPhone brightens up grey market

MUMBAI: The launch of Apple iPhone by Bharti Airtel and Vodafone Essar seems to have revived the dwindling sales of the gizmo in grey markets.

The reason: the price tag announced by the two GSM giants is too high and all those who had been waiting to buy it officially, are now rushing to the grey markets to get the 16GB iPhone for as low as Rs 20,000-Rs 22,000.

“Sales had dipped after it was announced in May that Airtel and Vodafone will bring iPhone to India. Many postponed buying the phone from us. However, since the prices announced are almost 50-60% more than at what we sell, we are getting back business,” said a dealer at Heera Panna, Mumbai’s best known grey market for all high-end phones.
The two companies are selling the 8GB version for Rs 31,000 and the 16 GB model for Rs 36,100. However, at Vodafone stores, the gadget is now available at Rs 29,640 for 8GB and Rs 34,580 for 16 GB version. This is because Vodafone is not keeping the Rs 1,500 margin in the sales made through its own stores.

According to another dealer, “We were selling the 16GB version for Rs 28,000 till July. But then sales dipped anticipating the operators would have similar price tags. So we reduced prices, which has improved offtake.”

Both these dealers have sold over around 40 units each since the iPhone was launched almost 10 days ago. Accendia Consulting principal analyst Alok Shende said, “Experience across product categories in India is that high prices create a grey market that eventually cannabalises legitimate sales of products.”

The same was true of laptops, computers and video games until prices were brought down to an extent that grey market sales became ineffective, he added.

Foreign travellers who come to India bring iPhones, which are locked to networks. They are then unlocked by the dealers. “It takes not more than 15 minutes now. Most people can unlock it on their own using softwares available in the market,” said one of the dealers, who began with charging Rs 3,000 for unlocking the iPhone last year and now takes only Rs 500.

Apart from this, those travelling from India to the US or other countries where iPhone is available, get the devices for their friends and relatives. “On my last trip to the US, I got six iPhones for my family. I unlocked them on my own and they are all working fine. I paid just $200 (around Rs 8,600) per handset,” said an analyst working with a research firm in Bangalore.

Source : Economic Times