Wednesday, November 12, 2008

Internet and Globalization - II

The industries which sold digital content of any sort, be it software, music, movies, etc.; have all woken up to the challenges and opportunities that internet has to offer. Many of them are taking advantage of this fact and making the most of it as well. There are still other industries whose marketing efforts put them in a place where internet has been able to play a large part in their success as well as their demise.

I will take the case of Apple. Apple has a very strange way of marketing their products. They usually do not stick to a lot of TV ads, at least not in India. They are very regular at releasing updates and also make a very public show of it. They are also one of the companies that is so closed to the outside world that their product can be considered a niche product (even though it is so ubiquitous).

Apple learnt somethings about marketing the hard way when it launched iPhone in India.

About a year back when Apple released the iPhone in the US, it was an instant rage. Everyone, including the presidential candidate was talking about the iPhone. It was a phenomenon like nobody had seen before and the mobile handset companies were all shivering. Fast forward 8 months...

iPhone was launched in India. A phone that had sold more than a million pieces a month and was stocked out across US, entered India with 2 operators unlike other countries, where it was distributed by only one operator. It failed MISERABLY! Although the company would not give details, according to certain estimates only 10,000 iPhones have been sold in India 3 months after launch.

What hit them? In one word the Internet (also the piraters to a certain extent).

8 months was long enough for Apple haters to figure out every negative thing about the iPhone and publicise it sufficiently. Also, there was a lot of information available about the phone on the internet and people were immediately able to see what were the shortcomings of this phone; that was touted as the best. The internet had transferred the initial US launch hype across the world, even though the company did not put in any effort a lot of marketing happened on the net; and though the phone was not launched in India, the excitement regarding the launch was the same.

Then through the piraters and smugglers, iPhones made their way into the market. Within about 2 months of the US launch, the die-hard Apple lovers had already acquired their beloved phones through wrongful means. These were the missing phones that Apple and AT&T kept reporting. Also, the internet has made sure that the pricing is extremely transparent. Knowing that, launching iPhone at almost double the price as that of US did not make any sense, but Apple did.

All in all, the Internet alone is to be blamed for the demise of the iPhone in India. The demise occurred even before the birth. Will Apple learn its lesson?

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