Why the iPad mini matters for Apple in India

So Flipkart (India's Amazon), just started selling the iPad mini in India starting at Rs. 21,900 (about $400) http://www.flipkart.com/apple-16gb-ipad-mini-wi-fi/p/itmdfwgjthu4feut. This, at a time when the 16GB Nexus 7 is retailing for Rs. 19,999 ($368) in India http://www.cromaretail.com/NEXUS-7-ASUS-1B019A--7%22-Tablet-(Brown)-pc-16045-162.aspx. (Flipkart does not sell the Nexus 7). This is a big deal for Apple to foray into the Indian market. India has always been a very price sensitive market. The key to doing well in India is to provide a great bargain, hence the dominance of android in the smartphone market. Carriers do not subsidise smartphone costs in India, which means that to get an iPhone 5 in India, you will end up spending anywhere upwards of $750. Android phones retail at less than a $100 and a decent android phone (the galaxy nexus) will cost about $350-400, less than half the cost of an iPhone. Very few people in India will have experienced using an Apple product. Macbooks and the iMac are too expensive (the macbook air starts at about $1300). We completely skipped the iPod revolution, jumping from the walkman to the mp3 and FM radio playing Nokia featurephones and now smartphones. The tablet market is an emerging market. No one has yet taken control of this market in India. The 7" galaxy tab 2 starts at $368 and the 10" galaxy tab 2 starts at $550.

In summary: iPad mini - $400 Nexus 7, Galaxy tab 2 7" - $368 Galaxy tab 2 10" - $550 iPad 4th generation - $590

Anything priced above $500 will in general have a hard time selling in India, especially a "luxury" device like a tablet. The iPad mini hits the pricing sweet spot where it is a great device at a price that doesn't leave you feeling like you were robbed. For Apple, the iPad mini could be the gateway device for the consumer in the developing market to enter the world of Apple. Now only if Apple sorts out their distribution network in India, it has potentially a billion more consumers waiting.