Indians' thriftiness an obstacle for Apple's monetization strategy

Summary:Financing plans, discounts, and cashbacks will put the iPhone in the hands of more Indians and drive more traffic to India's nascent iTunes store, but Apple can expect a hard sell converting these thrifty newcomers into paying consumers.

Discounts for new Indian iPhone purchasers will boost the reach of the iTunes store but this may not directly translate into sales.
 
Forrester mobile analyst Katyayan Gupta told ZDNet said that Apple's efforts to make the iPhone more affordable will ultimately broaden the reach of the Indian iTunes store--where songs sell for about 9 rupees each (six cents).
 
Earlier this year the device manufacturer struck a deal with local banks to finance iPhone purchases, which allows the device to be paid off in six or twelve month instalments. Recently it started offering discounts to students; smartphone owners who trade in their devices; and a ten percent cash refund to American Express credit card holders. 
 
"It's a very smart move in my opinion," Gupta said. "By discounting, Apple expands the number of people who use their products which gives them a chance to cross sell and upsell iTunes content.
 
He added content will increasingly become the currency via which handset manufacturer drive profits.
 
However, Katyayan said Apple will not enjoy the rewards for a while. Specifically it must address the Indian aversion to paying more for a better user experience.
 
"The Indian psyche is such that people are value sensitive. If they compare two products they'll always buy at the cheaper price, foregoing the customer experience," he said.
 
The expansion of Apple's robust ecosystem will challenge this behavior, however, this will take time.
 
"I think it will change, it's bound to change, but not in the near term. For a considerable period of time it's going to remain the way it is but it will improve--gradually."

Topics: Smartphones, Apple, India

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Mahesh Sharma earned his pen licence in his homeland, where he covered the technology industry for ZDNet, SMH, Sky Business News, and The Australian--first as an FTE, and later as a freelancer. The latter fueled his passion for startups and empowered a unique perspective on entrepreneurs' passion to solve problems using technology. Armed... Full Bio

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