The iPhone 5 Frenzy Is Missing From the World's Second Largest Market

We're almost through the week that was iPhone 5. Every year Apple (Nasdaq: AAPL  ) launches a new and improved version of its golden goose, and every year the media and analysts ratchet up expectations to ever-higher levels -- witness this headline in The Guardian:

iPhone 5 sales could see Apple boosting US economy, says JP Morgan economist

According to The Guardian, "When it was originally unveiled, the iPhone was so universally revered that wags dubbed it the 'Jesus Phone.' Five years on, its power is so great that its latest iteration could perform the miraculous feat of saving the U.S. economy."

The contrarian subcontinent
Meanwhile, while most of the world is worshipping at the altar of Cupertino, the telecoms of India -- a nation with a population of 1.2 billion from which to draw subscriber bases -- seem immune from all the iHype.

But it's not because they're oblivious. The Indian telecoms say the terms Apple demands from them to sell the iPhone won't work in their very price-sensitive marketplace. Indian news website Firstpost spoke with an executive (who wished to remain unnamed) from one mobile operator who said: "We don't like [Apple's] business proposition. They want us to sell a huge number [of the iPhone], which doesn't make commercial sense."

It partly comes down to what's affordable for most of the Indian population. The selling price for a smartphone has to come in at $150 or less.

The other reason is it's more profitable for the telecoms to sell their own phones. Rajat Mukarji, Idea Cellular's chief corporate-affairs officer, told Firstpost that not only were Apple's terms impractical for India, but that "[w]e also have our own schemes for our postpaid business and our own handsets, which we want to promote."

U.S. carriers hoping for a miracle
But the iPhone still walks on water for most of the rest of the world, even though the major U.S. carriers -- Verizon (NYSE: VZ  ) , AT&T (NYSE: T  ) , and Sprint Nextel (NYSE: S  ) -- keep seeing the high iPhone subsidies cutting deeply into their profit margins. Those carriers are hoping for a third strong smartphone ecosystem to arrive and take away some of Apple's pricing leverage, certainly before next year's iPhone 6 also solves world hunger.

The iPhone 5 frenzy merely underscores the effect Apple has on the whole tech world. To get the full scoop on one of the preeminent names in technology today, grab your copy of the Fool's new premium report on Apple. It comes with a full year of updates, as well as an overview of the must-know opportunities and threats for every Apple investor.

Fool contributor Dan Radovsky owns shares of AT&T. The Motley Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of and creating a bull call spread position in Apple. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.


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