Apple may soon open retail stores in India after months of delays. India is a fast-growing market for smartphones, and the Cupertino-based smartphone maker has little presence in the country. Last month, Apple CEO Tim Cook met with government officials during his visit to India.
Android dominates, but Apple getting popular
On Monday, the Indian government issued new rules exempting foreign-owned companies that aim to open stores selling a single brand of products from procuring 30% of the products’ content locally. This exemption, which lasts three years, can be extended to eight years in the case of companies selling “cutting edge” items like Apple’s Macs and iPhones.
According to Gartner, Indians will buy an estimated 139 million smartphones this year, but Android models costing less than $120 dominate the market. In India, sales of Apple devices increased 56% during the last fiscal quarter, said the Silicon Valley giant. According to Gartner, total sales of Apple products in India were around 2 million units last year.
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“People feel pride after buying an iPhone, that’s what Apple is all about,” said Anshul Gupta, a personal technology analyst with Gartner. “That’s how they maintain the premium image.”
Friendly to foreign tech firms
To make India more predictable for foreign technology companies, the government, led by PM Narendra Modi, focuses on policy changes that also affect other sectors like aviation and the military, but the rules do not always work as planned.
In March, the government announced that online retailers like Amazon, which sell many brands are legal under Indian law. It also said that such retailers must serve as marketplaces for third-party merchants and could not sell goods directly to consumers. This protected local merchants but threatened to upend the business structure of Amazon and local competitors like Flipkart and Snapdeal.
The policy announced on Monday will not have much impact on the overall technology industry in India, but it will clearly help Apple open stores in the country. The new rules will give Apple and other major Chinese phone makers like Lenovo and Xiaomi an ability to set up shops in India to showcase their products. No formal response has been received yet from the U.S. firm on its applications to open stores, reports The New York Times.
On Monday, Apple shares closed down 0.24% at $95.10. Year to date, the stock is down by over 11%, while in the last year, it is down almost 25%.