Grey market finds no takers for 2G iPhone

Grey market for the iconic Apple iPhone in India has shrunk dramatically with the official launch of the 3G model in the country.

On August 22, the country’s two leading mobile operators, Bharti Airtel and Vodafone, introduced the Apple 3G iPhone exclusively for their customers at Rs 31,000 for the 8 GB and Rs 36,100 for the 16 GB phone.

Grey market operators in Delhi and Mumbai say that the 2G iPhone, which was launched last year in the US by Apple Inc and was available for around Rs 24,000 to 27,000 in the grey market, has virtually disappeared from the market because of the relatively higher price tag compared to the newly introduced 3G version.

Says a leading grey market operator based in Delhi: “The 2G phone is not coming to us as you can get a 3G phone from the official market at Rs 31,000. So why should anyone pay Rs 25,000? Also, Apple, which was selling the 2G phone at $399 bundled with a connection, is now selling the 3G at $199 also bundled with a connection. So, obviously, why would anyone buy an older model?”

Grey market operators in Delhi say that a few months earlier they were selling over nine to 10 phones a day. And while no official figures are available, over 5,000 Apple 2G phones have been sold in India according to industry sources in the grey market.

However, grey market operators also say that the difference between the official price of the 3G phone and that of the grey market is not steep enough for customers to make a beeline in the grey market.

A dealer of phones in Delhi’s Palika Bazaar said: “At the moment, we are only catering to customers who are not ready to wait for the delivery of the phone from the operators. They are paying a premium of only Rs 1,000 to get it from us.” In this case, most of the grey market dealers have made bulk bookings of phones with Airtel and Vodafone, which they are re-selling at a slight premium.

A dealer in Mumbai’s Heera Panna building points out: “Considering the fact that in the US the Apple 3G phone offer with AT&T is locked in a two-year agreement with an operator (which costs around US $2,000), in India the difference between the official and grey market price will not be more than Rs 2,000 to Rs 5,000. That will not be too attractive as the official phone with a one year warranty looks more attractive”.

There are others who say that they will be able to unlock the 3G phone if customers can get it from their relatives abroad. “We can unlock the phone so that it can be used for any operator and not only for Airtel and Vodafone for Rs 1,500.”