Apple’s iPhone 3GS going to compete with Android in India

On May 27 the iPhone 4 was officially put on the market of India with the price starting at 34,500 Indian rupees (around $760) for version of 16 GB with a two-year service agreement. But the price for iPhone as high as $760 (which the government is not satisfied with) makes the iconic item out of reach for the 41.6 percent of the India’s population that lives below the poverty line of $1.25 a day.

It’s no surprise that Android is a hit in India. As local report states, Apple is using its secret weapon – the unlocked, cheaper iPhone 3GS which is at the moment advertised by Indian carriers Airtel and Aircel. It will not be cheap – not available for 41.6 percent of impoverished India’s population – but the upper-middle class could afford it:

Apple has divulged plans to relaunch its iPhone 3GS, which was then only available through network operators like Vodafone and Airtel. The new unlocked version will come with 8GB internal storage at a very reasonable price of 19,990 Indian rupees (about $444). Apple’s latest iOS version 4.3 supports iPhone 3GS, making it a worthy opponent to similarly-priced Android devices with better hardware. Apple has also said that iOS 5 will work on iPhone 3GS though it is likely that not all features will be supported.

Despite Tim Cook’s assurances that iPhone is not only for the wealthy, that has pretty well been the case so far. And is spite of all talks about affordable iPhone, Apple remains a high-end play. Such a strategy has a bad effect on the Apple’s performance on key billion people markets where cheaper Androids are supplied to majority of population with lower income, including India and China.