“Design In California. Assembly By China. Apple Hold All The Power”
– Inscription on the back of an iPhone Clone that I tried out in Delhi a couple of days ago.

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The Apple iPhone has been priced at Rs. 31,000 for the 8GB ($710), and Rs. 36100 ($830) for the 16 GB version in India. Apart from a select early adopters – that is, those who haven’t yet bought the 2G iPhone from the grey market, off Ebay (delivery by FedEx) or directly from the US – it’s likely to receive a lukewarm response. I’d be very surprised to find buyers queued up outside retail showrooms, which is something of a norm in the US.

Why At A Premium?
The problem is that instead of being priced cheaper than the US version, or at least on par, the iPhone has been priced in India at a premium. From what we’ve heard, the iPhone will be locked-in, but the tariffs will remain unchanged: hence, the price is only comparable with AT&Ts no-contract version, the pricing for which was announced last month:

Therefore, the iPhone is at a 18.5 percent premium, while most people have in mind the prices for a new iPhone 3G with a 2 year plan – $399 price for 8GB and $499 for 16 GB model. The other problem is that 3G won’t be launched for at least another year in India, and unlocked 2G iPhones are available in India for between $400-$500.

Unlocked iPhones
While no numbers are available for iPhones already active on Airtel and Vodafone networks – there are many, and the operators are well aware of them. The question is – will Airtel and Vodafone disable access to unregistered iPhones in India?

iPhone Clone
I tried out an iPhone clone a few days ago – bought from China for around Rs. 5000 ($115). While the interface wasn’t as smooth as that of an iPhone, it had all the features, and then some more: by shaking the phone in a particular direction, one could change the wallpaper, or change song being played. There was an Apple logo at the back, and the inscription mentioned above. At even double the Rs. 5000 price, it’ll easily outsell the Rs. 31000 iPhone.

Update (Aug 22nd): A longer version of this post appeared in the Financial Express today