We Indian people always keep lamenting that how come the same mobile for which we pay 40000 bucks is available at a price of only 100 Dollars in US? If we convert that amount to Indian Rupees, it comes out a modest 12000 Rupees. Imagine if Iphone becomes available at that price point! What a fun it would be to see almost every person operating Iphone! So, what’s the mystery behind cheap locked phones?
A locked phone is basically a phone which is contractually bound to a particular service provider. For example, A $100 Iphone is US would be on contract from Verizon or At&t. It would be a two year deal in which the user would have to use that particular network for atleast two years. In these two years, the service provider would earn back the discount it provided on the cheap locked phone at the beginning through data plans, roaming plans, call tariffs etc.
This kind of contractual scheme was first started in India by Aircel around a year and half ago. It was providing Iphone 3S at a price point of only Rs 10000 with a one year contract. This scheme did help Aircel earn good profits because at that time, Iphone 3S’s production had been already stopped. So, they took leftover pieces from the dealers in order to clear up the stocks. These smartphones they acquired at a really low cost. At the same time, they offered these on contract. Thus, it guaranteed Aircel the returns from a user for a two year time. So why did Aircel did not go further and offered other latest smartphones on contract. One theory could be that the new devices would be a little expensive to acquire and moreover, if they are not able to sell those well, losses would follow. This is just one side of this multi- faceted story. A country like India has a huge potential. All the international firms are realising this and the trend to bring their flagship products to India within a fortnight of its international launch has started. Needless to say that this move is paying off great. We would try to unearth the exact reason that why no Indian carrier offers a cheap locked phone. We would be do our best to talk to the market resources who are actually into this business, so that we get the real facts on board and not same guess work or made up stories. Stay tuned!