In Sydney, the iPod is as conspicuous as it is ubiquitous. Almost everyone I know has one - or wants one. I have harcore technophobe friends who are now passionate proponents of podcasting. And, like half the people on a given Randwick-City express bus, mine has become an essential part of my daily commute.
Like mobile phones (and to a lesser extent computers, especially laptops) they've become so common and affordable that they're virtually disposable. For example, I've had two - and I confess that I've been considering a vanity upgrade. My first was green mini. It suffered battery failure early last year and I replaced it with a 4gb nano. Now, I'm eyeing off the second generation nanos - I
have always had a thing for pink...
But I digress. My point: despite market saturation in the affluent west, iPods are almost unknown in India. This surprised and mystified me - India is a developing country, but it's also home to more than a third of the world's software engineers. It has a sprawling, wealthy, tech-savvy middle class; internet cafes abound; MP3s are a way of life; and even rickshaw drivers own mobile phones. Like the iPod itself, India is all about the effortless integration of technology and recreation.
Nonetheless, Occam's razor pointed to cost and yesterday's
Telegraph confirmed this hypothesis. (Also reported
here and
here.) The local price for a 2gb nano is US$222.27, the second highest price on earth after Brazil, where they're US$327.71. More importantly, with average average annual earnings of just US$720, India has the lowest per capita income of the 26 countries where iPods are sold. It would take an average worker 112.67 days (more than five months) to cover the cost of an iPod; it would take an average Swiss worker just 1.17 days. The cost is under two days work in Canada, the States, the UK, Sweden, Denmark, Ireland, Austria, the Netherlands, Japan, Hong Kong, and - of course - Australia. But they're also expensive in China (37.2 days) and Brazil (34.6 days).
These figures are derived from
Commsec's iPod index data, which converted local prices to US$ to compare the strength of currencies. It's an
even more gimmicky version of the Economist's
Big Mac Index. Western media is tackling the report more directly, discussing its prediction of
an AU$ slump. This is a disappointing angle given that the index can't control for the biggest independent variable in its data - intentional price discrimination by Apple. As such, it's pretty useless for analysing global currencies. On the other hand, it does highlight some disparities in Apple's pricing practices, and so perhaps points to
Apple's predictions about currency fluctuations. For example, I'd infer that Apple has a tendency to set a higher price in countries where it fears inflation - why else the relatively high price in China, where iPods are manufactured and transport costs are practically non-existent?
It's understandable that Apple wants to keep the price standard across markets, income disparities notwithstanding. This protects quality and shields against parallel imports. But if I were into conspiracy theories, I might wonder whether Apple is keeping the iPod especially expensive for a reason. It could be argued (if not very convincingly) that it's saving their x-factor by limiting their global reach, compensating for market saturation by subtly establishing the iPod as a marker of western affluence, and leveraging globalisation to protect the iPod's association with aspiration. I can see the ad campaign now. "Those white earphones signify much more than "I'm listening to music, don't talk to me": they stand for a better life."
In any event, Apple is clearly taking a deliberate approach to global pricing. And why not - the iPod is its flagship product,
the symbol of all that is cool and market-conquering about the revitalised Apple. It has every reason to be cautious about the revenue it raises and the image it projects. But it will be interesting to watch its approach in developing markets over the coming years, especially in India and China. I suspect that Indian incomes will catch up to western pricing more quickly than Apple will adapt its prices to accommodate low income regions.
Perhaps even more interesting: I think the Indian market is more than ready to start buying MP3 players in droves. If the iPod is out of the question, it will buy the best alternative it can afford. My (altogether unqualified) tip to the technology world: take your iPod rivals to India, discount them heavily, and watch as the beast slays itself.
Tags: india, ipod, media
Current Location: Kolkata, India
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