Indian Family Wipeout Over iPhone: The Dangerous Lure Of Consumer Tech Debt

One case is not enough to pass judgement on a complex thing. And one death linked to monthly payments on an iPhone is definitely not enough to say it's the surest way to get caught in a debt trap.

But the view changes when there is more than one case of human tragedy over debt after an expensive purchase like an iPhone. From time to time the media reports stories about people dying due to self-harm over financial disputes and demands linked to expensive gadget purchase. Most of these cases involved young people, or the age group known as Gen-Z.

The latest case involved three deaths: Kunal Chandgude, 19, and his parents who fell off a cliff in Maharashtra while in a family standoff over paying EMIs for an iPhone.

In India, macroeconomic consumption surveys and wealth distribution data show less than five crore households have a monthly family income of Rs 75,000. Assuming that the average price of this 'aspirational' phone is Rs 75,000, most households run the risk of falling into a debt trap.

The question of whether the iPhone is pushing lakhs of families to debt needs a serious look. At least 42 per cent of iPhones sold in India this year will be on EMIs, independent market research firm Counterpoint Research said in a report.

The wipeout of an entire family in Maharashtra showed the aspiration to own a premium smartphone, fuelled by aggressive retail financing, has turned into a psychological and economic trap that seeks a deadly price from families unequipped to handle modern consumer tech debt.

Chandgude bought an iPhone on EMI but found himself unable to make the payments. After an argument with his parents over his demand for money to pay the latest instalment, he ran out of his house and made his way to the edge of a hill, leading to a three-hour standoff that ended in tragedy.

His father, Murlidhar, 48, who spent a lifetime working as a driver to support the family, lost balance and fell off the cliff while making a final attempt to physically grab his son. His mother, Sangeeta, jumped after them in shock and despair on seeing what had just happened.

What can be a more extreme result of an aspiration that is possibly pushing lakhs of Indian families into a debt trap?

Independent market research shows that buying high-end smartphones on borrowed money has become common. This tendency has moved from the cities to smaller towns and villages.

Consumers are moving away from cash and one-time payments amid steadily rising device prices. The smartphone industry has encouraged this after realising that the only way to maintain growth in a price-sensitive market is to sell the illusion of affordability through monthly instalments.

Data shows that tier-2 markets are now the single most financing-driven segment for smartphone purchases, outpacing major cities, a study this month by Counterpoint Research said.

To hide the unaffordability of these premium devices, the retail market kept stretching out repayment periods by keeping the monthly cash outflow seemingly manageable and extending the lifecycle of the debt.

Today, the average smartphone financing tenure in physical retail stores has reached 10 months.