iPhone a Flop in India | Lessons for Online Education Startups

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This is a guest post by Vikrama Dhiman. He is an accidental software product manager who has worked with teams across India’s IT centers – Bengaluru, Hyderabad, Mumbai, Delhi, Chandigarh as an Agile Software Development Coach and a Product Manager with Internet companies.

iPhone has been a massive failure in India. Yes, there are two hundred and seventy people [I made up that number] worrying about iPhone 4.0 not releasing in India but most just do not care. And, this in a country that is obsessed with everything fashionable in Umrika [that's desi for America]. So, what went missing in India?

Well, post-facto analysis can be misleading, but here is what most analysts thought the consumers said before they decided not to give into the iPhone mania:

  1. What were Apple and Airtel smoking when they priced the iPhone at INR 31,ooo [700 dollars]? How can something cost USD 200 in US and USD 700 in India?
  2. So, what you are saying is that even after paying this much, you will give me a locked phone whose provider I can’t change?
  3. What is the use of 3G when there is no 3G bandwidth in the country?
  4. What kind of a phone does not have SMS forwarding [esp when 70% of mobile users forward at least one message a day in India]?
  5. I am sorry, but what is it that iPhone is good at?
  6. Did Apple think that they will compete with a Prada and win?
  7. Is it even half as robust as Nokia? We know what happened to that delicate thing called Matiz [just not suited for Indian market].
  8. Where will I get this thing repaired?

So, there were failures in terms of feature-market & price-market & sentiment-market mapping. I think one of my friend summed it up well: Basically, neither did the iPhone fall in “Value for Money” segment, nor the “Status/ cult” segment for majority of people. One can also generalize and say that most products fail to take off because the mapping with the market fails in terms of features, price or sentiment. If we closely analyze then we in the online education start-up community seem to be failing there too. Either the customers do not perceive any value in them [key operative -> customers do not perceive and not products are not able to articulate] or they are not status/ cult symbol [like say LinkedIn Premium Account] for majority of people. Majority is a number and is obviously a function of your business model. Right now, most online education business models seem to be focused on get free users->convert some to paid users. This model has two challenges-> getting free users and then getting them to pay. Other than LiveMocha, none of them are more than a million plus users right now. And from whatever little I know, not many of these users are paying. Hence, this does not seem to be working as expected. Is there a mapping issue with the market? Let’s review the questions we highlighted above, again from a customers/ users perspective with regards to <insert the product here>:

  1. Why should I pay for this thing?
  2. So, learning online seems to have its own baggage/ inconveniences and you still say that nothing beats face-to-face. Humn!
  3. What is the use of those extra features you packed in, when I don’t need them?
  4. What is the use of this bandwidth intensive feature when I don’t have the bandwidth?
  5. I am sorry, but what exactly are you good at?
  6. Do you think you will compete with neighborhood teachers and win?
  7. Is it even half as robust as enrolling in an evening class?
  8. Where is the money back guarantee?

What do you think which educational web startup answers these questions well? Is it also  successful? 

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  • Felixjamestin

    Us apple-fanboys shall organize a bandh over this atrocious post. Bombay bandh on the way!

    • http://kirstenwinkler.com KirstenWinkler

      Where were you when I wrote my post about the reason why I will buy an iPhone? :)

    • vickidhiman

      You obviously do not fall into the majority sentiment here :)

  • vickidhiman

    Thanks Kirsten for giving me this opportunity to write on this fantastic blog :) I am excited to contribute and waiting eagerly for other contributors.

    • http://kirstenwinkler.com KirstenWinkler

      My pleasure. You know that I am a big fan of your writings so it was a no-brainer to ask you :) . Looking forward to your future posts!

  • chinamike

    What I liked about this is that it went to one of the key features and turned it on its head— so you (online company) really think you are better than offline classes and neighborhood teachers? Well, show me!

    • http://kirstenwinkler.com KirstenWinkler

      Exactly! And I think this could be difficult.

    • vickidhiman

      Thanks for stopping by to read and comment. Well, I do think some companies are doing a good job of beating offline classes and neighborhood teachers but probably not that good a job of communicating or connecting :-)

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  • http://twitter.com/CEOsherpa Michael Schutzler

    Vikrama – spot on!

    • http://www.vikramadhiman.com/ Vikrama Dhiman

      Thank you for taking time out to read and comment :)

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  • Gmachlan

    Thanks Vikram.
    Beautifully written and I love your sense of humor. You bring some very concise and astute observations to the table. I would love to hear some of your observations along side of Kirsten's in the online education market.
    Jai Ho!
    St George
    Dragonslayer (retired)

    • http://www.vikramadhiman.com/ Vikrama Dhiman

      Thanks George [of the jungle of online education :-) ]. Very honestly, I was nervous [Kirsten can vouch for that] when I wrote this post as to how it will be received. But your comments are encouraging :-) Thanks again!

  • Observer

    I think online learning is different things to different people. Different languages and different countries will have very different dynamics. Finding a neighborhood Spanish teacher is probably pretty easy in the US, but finding an neighborhood Arabic teacher may be very difficult.

    In general, neighborhood teachers might be a better choice in India given the bandwidth concerns, as well as the economics. However, for places with good bandwidth, expensive local alternatives, and willingness to adopt new technologies — online language learning may be a strong alternative. Will you learn faster with one-on-one lessons online, or twice-a-week lessons in a 20 person classroom?

    Finally, Livemocha is an impressive company, and let's be fair that 1 million users is partly a function of having 14 million dollars to do advertising… I think the reality is that language learning social networks are nowhere as viral as traditional social networks. That's natural though, because the type of relationship is completely different — it is a mistake to measure the two types of networks with the same expectations for growth.

    In the end, the standard is the same one that you mentioned — the real question is what do people think is worth paying for? My only addition to that is, what people think is worth paying is changing over time.

    • http://www.vikramadhiman.com/ Vikrama Dhiman

      Thanks for stopping by to read and comment :)

      I agree with you that multiple factors influence people's perception and whether they think that your service is worth paying for can change over a period of time. Probably, some points to consider in the next post :)

      P.S. Apparently, @LiveMocha has over 6 million users.

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  • http://twitter.com/enygmatic_in Elroy Serrao

    Nice article Vikrama. Just a couple of observations:
    When you call the iPhone a failure in terms of sales (I'm assuming), several of the points you raised are indeed relevant. But you are only considering “official” figures [I'm referring the official ones, not the one's you made up ;) ]. Most of the tech savvy people and the “cool” crowd that Apple sells to already had a “jail” broken iPhone before it hit the markets here in some cases. Quite a number of them actually went ahead and got a “jail” broken iPhone even after the official debut.
    So I don't think this represents a failure of the “product” per se because the product was still selling, though not in the manner desired. I think this represents more of a marketing and pricing failure than any product deficiency.
    Secondly I think we also need to think of Apple's target market here – Is it the everyday, SMS forwarding Joe on the street or someone a lot more upmarket and maybe measure the products performance taking all this in to consideration.
    On a side note, iPhone mania actually got so bad that almost every second person in my circle had one – so much so that I bought an Android based phone instead. Then again that's just me…

    • http://www.vikramadhiman.com/ Vikrama Dhiman

      As far as I know, no celebrity was seen with iPhone, or is clamoring to lay hands on iPhone 4. That is as high end as you get.

      Yes, some tech community/ geeks are mad about iPhone [lesser now than before] but not many. For instance, no one in my team [and it is a big team] has an iPhone. I have traveled to Bengaluru recently and interacted with many [and I do mean many] techies and geeks. I kept looking for the phones they used. I could not find many iPhone users. If I thought someone fitted an Apple fan-boy [and its generally fan-boys not fan-girls], not having this phone, I'd ask them why they are not using iPhone. Mostly, I'll get the shrug. I guess “shrug” is the sentiment which describes iPhone sales in India quite aptly.

      • http://twitter.com/enygmatic_in Elroy Serrao

        Well as far as celebs go its both the blackberry and iPhone that are popular. I think Bachan Jr and Gul Panag use iPhones. Also, my own experience has been drastically different, with most people I know clamoring for iPhones. Guess the Jury is out on that one, unless you can get hard numbers instead of anecdotal information to support your point….

        • http://www.vikramadhiman.com/ Vikrama Dhiman

          Gul Panag is definitely an Apple fan. Bachchan Sr. uses Blackberry :-)

        • http://www.vikramadhiman.com/ Vikrama Dhiman

          According to a PTI report, the number one player Nokia remained on the top with a market share of 54.1 per cent in terms of units sold during the last year which ended December 31, 2009, followed by Samsung with a 9.7 per cent share and LG with a 6.4 per cent share in number two and number three spots, respectively.

          http://www.ciol.com/News/News/News-Reports/Mobi…

  • http://twitter.com/kaylxndr Kay Alexander

    Hey Vikrama, great first post! Looking forward to more insights from you.

    What would you say are the standard mobile phones in India by customer groups of
    1) normal people
    2) business people and
    3) geeks

    If I take a look around here in France it's a mix for the normal people but with a trend to touch screen devices at the younger audience as you get models from Nokia and LG at low prices with your contract these days. Business sector is clearly iPhone dominated, I'd say with Blackberries here and there. Geeks tend to go into the iPhone direction as well it seems.

    • http://www.vikramadhiman.com/ Vikrama Dhiman

      Normal People – Nokia has the clear lead followed by Samsung I'd believe.

      Business People – Blackberry, High end Nokia Phones, HTC

      Geeks – Android [I think it supports programming on the fly]

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  • http://twitter.com/kaylxndr Kay Alexander

    There came some data out from Gartner two days ago.

    “With the growing influence of local handset players in the low-end segment, the traditionally stronger, big global players have had their positions weakened. At the same time, the midrange to high-end market is getting increasingly competitive too, with a greater focus from global players on the Indian market and the launch of competitively priced midrange and high-end mobile devices.”

    and

    “The Indian cellular market is very dynamic. New carriers and many new local mobile device manufacturers have entered this already crowded mobile device market. This intense competition has led to very low call rates and low-cost devices from multiple manufacturers in the market. This market was previously dominated by just a few vendors such as Nokia, Motorola, Reliance and Vodafone.”

    You can read the press release over here: http://rte.gartner.com/it/page.jsp?id=1412313

    And if you would like to spend $1295 you can purchase the report. But if you already take a look at the table of content, I think Vikrama is right :)

    “5.0 Competitive Profiles
    5.1 Nokia
    5.2 Samsung
    5.3 LG
    5.4 ZTE
    5.5 Research In Motion (RIM)
    5.6 HTC
    5.7 Micromax
    5.8 G'Five”

    The report is over here: http://www.gartner.com/DisplayDocument?ref=clie…

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  • millenomi

    Correction: the iPhone has SMS forwarding.

    • http://www.vikramadhiman.com/ Vikrama Dhiman

      I believe that first iPhone did not have SMS forwarding.

  • AW71

    Dude Vikrama…in India there's no contract for mobile phones…whereas in Umrica they recover the money with a 2-Year contract and the $200 price for an iphone is not the regular price…did you check the unlocked price of Iphone 3G or iPhone 4? Check that first and then comment here on this blog. There's no difference….the price is same in India and US.

    • http://www.vikramadhiman.com/ Vikrama Dhiman

      Unfortunately, the first iPhone prices were higher in India. It has now come down. The penetration of iPhone has increased but the result not much :)

  • Sghosh Oxon

    Nonsense.
    Comparing Apple iphone with Android based phones is like comparing Maradona with some Chennai local club footballer. I recently bought my 3rd iphone, the Apple iphone 3GS 32GB from iStore in Bangalore, cost around 45K all taken together (set cost, plan, sim etc etc.)…but worth every penny of it. People who complain about iphone being expensive: guys, grow up and make money. And bloody stop complaining.