As far as I know, Indian's won't buy a low cost iPhone, even if it is priced at the equivalent of the most expensive android.
Reasoning is simple, over here people have to buy the flagship device. An expensive device, sold as a "low cost device", will still not make the cut.
That is why the GS3s sold like hot cakes before their recent price cut. After the price cut, online vendors have pointed out to a dip in sales.
To be successful in India, apple would have to place the "low cost iPhone" with some good marketing as targeting a different audience. They will probably do this too.
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True, I have seen men with iPhones who have bought the slate version and "masculised" it by etching graffiti style logos on the back, and covering it with a plastic screen guard like thing. It looks good, but I hate the plastic feel.
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They can prove their liking for India, by launching the iPhone 5S at the same time as the launch in the US
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Because people here have the psychological mindset that the price you pay must be justified by the size of the product.
This is exactly why India has lately seen a surge of SUV-styled cars (read bigger cars) that retail at the price of a normal car. Buyers don't seem to mind the cheap interiors or higher fuel consumption -- especially when fuel consumption is said to be the biggest deterrent for vehicle purchases.
