The brand of a mobile phone is one of the most important factor influencing consumers’ buying decision while most people don’t really care about advice being offered by the sales person at the mobile phone shop. Cost too is an important consideration and goes on to explain why iPhone failed in India.

In terms of features, multimedia (especially music) and camera quality of the phone do play an important role. Men or women who are single are much more likely to buy latest phone models and are also concerned about the looks of the phone when making a purchase while the 30+ group prefers “ease of use”.

This survey does give some idea about how India consumers make their mobile phone buying decisions but it definitely missed certain important parameters especially battery life, warranty, company’s support network and internet connectivity.

Why iPhone failed in India?

iPhone 3G is now the largest selling mobile phone in the US according to TechCrunch. Apple sold nearly 7 million iPhone units in the last quarter itself surpassing Motorola Razr as well as the BlackBerry Curve.

But the story is very different if we look at the iPhone 3G sales in India for the same period. According to numbers published in Business Today, Apple managed to sell only 4,000 headsets in India so far since the official launch that happened some three months ago.

iPhone-sales-India

While these are official numbers (and some people still buy iPhone from grey channels), they do indicate that the high price of iPhone ($800+) is kind of playing spoil-sport here in India.

And the mobile phone operators put the blame on Apple since it is the one who fixed the price of iPhone in India – “As a service provider, we are simply providing the iPhone experience to our customers. The price of the phone has been fixed in tandem with Apple and there is no room for us [Airtel] to keep a profit margin.”

What does entry of Virgin Mobile means to Indian consumers?

For the last one month, there has been lot of buzz created around with the launch of Virgin Mobile into the Indian market, and many people have been comparing it with the likes of another UK telecom major, Vodafone.

However Virgin Mobile does not have neither the network nor the spectrum to start its mobile operations. It is just an agreement with Tata Teleservices wherein Virgin Group has a brand franchise arrangement targeted primarily at the youth segment.

Neither is the arrangement under MVNO (Mobile Virtual Network Operator) format. Under this format, companies buy airtime in bulk from service providers for resale to consumers. Virgin Mobile is just using Tata’s distribution network and complement its existing brand Tata Indicom.


According to a Morgan Stanley report, the offerings of Virgin Mobile are cheaper by 25-30% than similar schemes of competitors. Also, it has launched innovative schemese such as paying customers 10 paise for every minute of incoming calls they receive, contrary to olden days when you had to pay for an incoming call.

Even the TV advertisiements of Virgin Mobile have struch a cord with viewers owing to its smart placements and humour.

The Virgin Mobile service is currently available in select cities only and has been strategically focussed on high street stores and malls where there is more orientation towards youth.

In future, the offering may widen to cover more cities but the scale of operations and offers may be limited such as to have a niche customer base and also not to overlap with existing setup of Tata Indicom services.