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Case on Pricing Strategies
The Brand name “Apple” tops in customer loyalty, it is one of the most trusted and demanded brands in the world, and iPhone is one of the most successful products of Apple. IPhone 4S model is sold in the U.S. at $199 (Rs10150), $299 (Rs15250), and $399(Rs20350) for the 16GB, 32GB, and 64GB models, respectively. This price is charged if the user makes a contract with network carrier’s, AT&T, Sprint, or Verizon. These Phones are locked and can only be locked after the contract is over. The unlocked 16GB, 32GB, and 64GB IPhone models are sold in US at $649(Rs33,000), $749(Rs38000), and $849(Rs43200)

In India, the iphones are not subsidized by network carriers, because of lack of profitability. However, the unlocked 16GB, 32GB, and 64GB models of Iphone 4S are sold at Rs44500, Rs50900, and Rs57500, respectively. Indian customers were quite upset with the price charged, as most of them could not afford it. The smartphone market in India is growing at fast rate. The number of smartphones sold in India increased from 1.7 million(17lakhs) units to 3 million(30lakhs) units from third quarter 2010 to third quarter 2011. Smartphones are becoming substitutes for music players, computers, cameras, newspapers etc. Other smartphones also provide the same features, but the experience that Apple iPhone gives you makes it one of the most desired products world over. The Price List

IPhone Price IPhone 4S in Price of IPhone in Price of IPhone in 4S models US (locked) US (Unlocked) India (Unlocked)
16GB 10150 33000 44500
32GB 15250 38000 50900
64GB 20350 43200 57500
Apple’s share in the Global mobile phone market is only 4.2%, yet it accounts for 52% of the total industry. The question now stands is “Why are iPhones overpriced?” A report from iSuppli states that the actual cost of the iPhone 4S to Apple is only about Rs10500. Apple is certainly the king of smartphones. A study reported that 93% of the iPhone users want to continue using an iPhone. On...

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