Buzz of new iPhone hits sales of earlier models

Santosh Pradhan, a young business executive, is an iPhone fan.

Though he desperately wants to own one, he does not want to settle for anything less than the latest model, due to be launched on October 4.

He's just one of the hundreds of Apple fans in the country who have deferred the purchase of Apple iPhones for the last two months.

Some hope Apple Inc would lower the prices of its earlier models -- the iPhone4 and 3GS.

Others are waiting with bated breath for the latest model, rumoured to be the iPhone5.

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The hype is telling on iPhone4 sales.

Mumbai, New Delhi, Bangalore and Hyderabad grey market sellers, for instance, have reported a drop in sales of the iPhone 4, ahead of Apple's imminent announcement.

"While the iPhone 4 is available with Aircel and Airtel, our customers prefer to buy from us, since we can offer a better price and a variety of accessories that users like to buy along with the device," says an electronics shop owner at Mumbai's Crawford market.

The iPhone 4's retail price is Rs 34,500 for the 16 Gb model (in Aircel & Airtel stores), while imported iPhone 4 units are available at the grey market for prices starting at Rs 26,500 for the 16 Gb model.

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Mobile retailers in Bengaluru and Hyderabad say they would take start taking pre-orders for the Apple iPhone 5 (not its official name), as soon as the company announces the shipping dates in the US.

"We know there would be a new iPhone and we are keeping a close eye on leading technology websites that have been talking about two new iPhones," says an electronics retailer in New Delhi's Gaffar market.

According to estimates last year, imports of mobile handsets rose to more than eight million units per month.

Handsets imported by the grey market evade value-added tax, octroi and entry, taxes the legitimate handset market has to bear.

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The grey market can thus offer cheaper devices.

According to a Frost and Sullivan report, India is the second-largest mobile handset market in the world after China, and is expected to grow even more, with an estimated 208.4 million phones to shipped by 2016, at a compounded annual growth rate of 11.4 per cent between 2010 and 2016.

The smartphone market is expected to grow tenfold to 30 million units by 2016, compared with about Rs 2.9 million units in 2010.

According to unconfirmed reports, iPhone 5 is expected to boast of better hardware and software compared to iPhone 4, including an eight-megapixel, dual-LED flash camera and an A5 dual-core processor that is found in iPad 2.

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This would give stiff competition to other dual-core smartphones.

Apple is also said to have improved the speed of its A5 chip to 1.2 or 1.5 GHz, with 1Gb RAM. iPhone 5 may also feature iCloud, which would store photos, apps, calendars and documents, instead of these being stored in the phone memory.

Apple is also rumoured to be increasing the screen size of iPhone 5 to compete with Android smartphones, probably opting for a four-inch screen, compared to the current iPhone 4's 3.5-inch screen.

The new iPhone, according to a report from research firm Piper Jaffray, is expected to help Apple double its marketshare in the smartphone category globally and close in on the Android.

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Apple's share in the smartphone market in the second quarter stood 19 per cent, according to market research firm Canalys, while Android's share was 48 per cent.

Sellers on e-commerce sites like eBay have already put iPhone 5 accessories -- phone cover, charging units and screen guards -- on sale.

While Apple officials in India did not comment on the launch date of iPhone 5, telecom analysts believe the company would push its smartphone sales by launching the device within four-six weeks of its launch in the US.

It had launched the iPad 2 just two months after the US launch, and the same may be expected of iPhone 5's launch in India, analysts say.