Why iPhone is costlier in India than US?

Apple iPhone costs just $199 in the US but if you want an iphone in India you'll have to pay at least Rs 31,000 so the big question is why is there a price disparity in this Apple device.

According to Sanjay Kapoor, President Mobility, Airtel, this is due to the fact the device in the US comes bundled with a 3-year lock in period, which is not the case in India.

This essentially means a consumer in the US buys the iPhone for $199 which is just the cost of hardware. He then pays $150 to activate the handset and then subsequently a part of the tariff plan he chooses goes to Apple.

Whereas in India the cost is upfront Rs 31,000 which represents not just the cost of owning but also using it. It is interesting that telecom giants Airtel and Vodafone are making no margins on this high end device.

When Steve Jobs launched the new 3G iPhone from Apple's stable in June, the trendier new version created buzz because of the price almost half of the earlier version. But when the same iPhone came to India the price was a party pooper.

The much-awaited multimedia rich mobile phone will finally be available in India on Friday. Airtel and Vodafone will give a network locked 8GB iPhone for Rs 31,000 and a 16 GB version for Rs 36,000.

But another big question is that what advantage does iPhone provides to Indian telecos. It is believed that the service will keep them ahead of competition who do not have the iPhone advantage at least not as yet.

But equally important is will the 200,000 iPhone aspirants who have pre registered with Airtel for the iPhone really turn into a purchase or will the big cost fizzle out the iPhone mania, stay connected to find out anymore.