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Disparity between smartphone prices in India and western countries

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Often we talk about how India is one of the most expensive places in the world to buy an iPhone — a notion which is ironic considering Apple is the richest company in the world and currently it needs people in one of the poorest markets to start buying its iconic products in droves. But there is also another disproportionate reality which many Indians don’t know about — some of the more affordable smartphones which we get dime-a-dozen in India either aren’t available to western customers or simply aren’t as cheap. The iPhone XS starts at $999 in the US, while in India currently this phone is for Rs 89,994 which converts to $ 1,289.93. In India, $290.93 is a lot of money. You’re talking about Rs 20,295.71 by the current exchange rate. This brings me to take a look at the general disparity between western markets and India which also allows brands like Apple, Samsung and Google charge extra premium all around the world based on their popularity in the west.

The disparity is real

If you run a simple Google search for best $300 smartphones in the US, then you’ll get pretty bad examples like the Moto G7, the aging Honor 8X and Nokia 6.1 which all range between $300 and $200. If you look at the smartphone market in India, most reviewers will not even talk about these phones. The best phone for less than Rs 20,000 or $291 is the Poco F1 which isn’t even sold in the US. This phone has some of the same specifications and features that one can find in the Google Pixel 3 and the Samsung Galaxy Note 9. Basically it’s flagship grade from a performance and battery life point of view.

The interesting one is the Nokia 6.1 which wasn’t a well received phone in India. So last year, HMD Global launched the Nokia 6.1 Plus with Android One with enhanced features like a screen with no-bezels, a faster Qualcomm Snapdragon 636 processor, dual cameras on the back and a new design. This phone isn’t in the US. In India, it retails for Rs 12,999 on Flipkart which makes it cheaper than the $210 Nokia 6.1 in the US. In India, this was one of the best reviewed phones.

The Xiaomi Redmi Note 7 Pro which sells for Rs 16,999 for its top of the line 6GB RAM and 128GB variant has the Snapdragon 675 processor which is on-par if not better than the Snapdragon 670 found in the new Pixel 3a. The Pixel 3a, however, starts at Rs 39,999 in India while in the US, it has a starting price of $399. This Xiaomi phone also has a killer dual camera system featuring a 48-megapixel sensor paired with a depth sensor giving killer photos. Compared to the Pixel 3a, its camera may be inferior but it’s better than a lot of phones including the OnePlus 6T which is being sold for $550 (Rs 38,425) with T-Mobile.

In India, this OnePlus 6T will be discontinued and will be replaced by the new OnePlus 7 which will start at Rs 32,999. The audience in the US will not even get the OnePlus 7 at launch and will have to make to do with a phone which is 6 months older and more expensive than the new phone which is being sold in India.

That brings me to the new iPods too which start at Rs 18,299 in India while in the US they cost $199, that’s almost a $100 difference. In Rs 18,299, there are capable phones like the Redmi Note 7 Pro which also give 128GB of storage, USB Type C connectivity, mobile telephony with dual SIM and 4G, and great performance coupled with a huge battery. You still get the headphone jack which with a decent DAC so both gaming and audio aspects are covered. If this product was sold at Rs 13,500, it would still be good value considering it’s an iPod made by Apple, but alas, that’s not the case.

Western reviewers are wrong too

One of the reasons this disparity exists is because phones aren’t reviewed on the basis of their price to capability ratio but just their capabilities. The other reason is that western reviewers live in their own bubble which means they aren’t aware or perhaps they just don’t care to review phones that are coming out first in China or India. This means they aren’t even accounting for the innovation that’s coming alive in these markets for much lesser.

A classic example is the fact that the Moto G7 has no business of being the best budget phone. A phone like the Xiaomi Redmi Note 7, not the Pro, would take its pants down in a giffy. Of course, since it’s not available in the US, it’s a fair call to not recommend it, but doesn’t mean that you don’t talk about it.

Another problem is the rating system of websites like the Verge. They rate phones on the basis of their capabilities but not price. Often I have reviewed phones which get a good rating because they provide incredible value at a certain price, but that’s not the case with websites like the Verge. They will necessarily bash the UI or the cameras of these phones even if they don’t cost a lot which is unfair considering the price.

The bashing of the UI is getting old now. Users in markets like India love MiUI, they do appreciate the extra features in Colour OS on OPPO phones and they do love the speed of OnePlus’s Oxygen OS. They don’t like the weird gestures on stock Android, they don’t like expensive apps on Apple’s products and the fact that you can’t customise iOS. Reviewers have to start behaving more like consumers, less like nerds.

Similarly, people are suddenly flummoxed about Huawei’s camera capabilities with the P30 Pro or the stuff that Oppo is doing with the Reno because these brands were always getting average reviews thanks to their cheaper offerings. Camera capabilities are getting enhanced and a lot of innovation is coming out of the Chinese brands. But since these brands aren’t that popular or simply not available in the US ( Huawei due to the ban), consumers don’t know about these products out there.

The trickle down effect

One of the big problems with western brands is that their organisations and product groups are run by folks who are fully American, European or naturalised there. This means their context isn’t localised.

For example, Google’s hardware is run by Rick Osterloh, while Apple’s iPhone hardware is run by Dan Riccio, with the software coming from Craig Federighi. In the case of Xiaomi, its India country head Manu Kumar Jain is also part of Lei Jun’s core leadership team and is a global VP for the company — so a lot of the learning feeds into its product philosophy.

For Google, one can imagine as its Pixel products pick up steam in India, it’s not hard to see them tailoring things more and more for India, hence the world. In fact, it was Google’s CEO Sundar Pichai who said, when you “build for India, you’re building for the world.”

Even for a brand like OnePlus, its founder Carl Pei is often in India like he was in Bangalore earlier in the month for the launch of the OnePlus 7 Pro. Its core product managers like Szymon Kopec are also based out of India.

For a company like Apple that’s a harder play as it’s a premium brand used to selling at higher price points. Commoditization of mobile technology has hit it, but its prioritisation of designing everything for US or Europe first will hit it hard in the long term. Once, I was chatting with an Apple product manager it was a eye opening experience that they didn’t realise how dependent people were on WhatsApp and Google Maps in India. Long story short, they didn’t understand the market that well that’s why India remains like a curveball for the company. This also results in executives not focussing its supply chain towards the market which causes problems in the long run.

But this is important for western reviewers and executives to understand — between India and China you’re hitting more than half of the world’s population. That’s the new world order, and if you design for these folks, chances are the rest are going to be fine as well because they are sitting on better infrastructure and are financially more well off.

Things are changing of course. Apple has a maps facility and an app accelerator in Hyderabad and Bangalore. Google has a lot of its products designed out of India and Pixel has always launched in India before a lot of western markets. Apple’s iPhones has just started to manufacture its phones in India which means prices may come down in the long run, but clearly, it has been late at this as the executives didn’t focus on India earlier. Same goes for Google.

If there is any company which has managed to buck this trend of price disparity, then one has to give Samsung credit. From a very early stage it had invested equally in India and some of its key western markets — which means the Galaxy S10 Plus costs Rs 73,900 on Flipkart which is approximately the same as the US at $999 for its unlocked price.

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