Apple to Expand in India

Apple Inc. (NASDAQ: AAPL) seems to be on course with its plans for expansion in India. According to a local publication known as FactorDaily, the Cupertino, California-based tech giant will open 3 of trademark Apple Stores in the area within the next one and a half year. Recently, the iPhone maker obtained an approval from the government of India to launch single-brand stores in the region. The 3 Apple Stores are set to open in Delhi, Bangalore, and Mumbai before the beginning of 2018.

The CEO of the tech giant Mr. Tim Cook is anticipated to travel and meet Prime Minister Narendra Modi, where he is most likely to unveil plans for the new retail stores. At present, a team of 40 or more executives of Apple is looking for the perfect locations for the new stores. Moreover, the property needs to be 10,000 square feet at a major high street area.

The net investment for each of the stores of Apple is estimated to be valued at approximately $3 million to $5 million. Currently, the Cupertino, California-based tech corporation does not operate any retail stores in the country and most of the products of Apple are sold through third party merchants and distributors. After the easing of policies, the Asian nation has permitted the iPhone maker to create single-brand stores in India, without being required to fulfill the requirement of sourcing a minimum of 30 percent goods from suppliers in the country.

The expansion of Apple into the potential market in India is part of its greater strategy to boost the sputtering sales of its iPhone device. Even the most lucrative foreign region of Apple—China – witnessed a sales decline of 26 percent in the previous quarter. Despite being an untapped market, India was able to report a 56 percent surge in sales during the same period.

The Apple CEO touts the Asian country as a new high growth area and anticipates that a rapidly growing LTE infrastructure as well as a population mostly aged 25 years old and under are some factors that can improve the sales of its iPhone device. It appears like the tech giant is not deterred by the market metrics in India—the country’s consumers opt for less expensive mobile handsets within a price range of $100 to $200 with huge screens, in comparison to the high-end Apple iPhone.

Apple’s expansion will get another boost when Foxconn—the iPhone supplier—opens its Indian assembly plant. The tech corporation’s Taiwanese partner is nearing its purchase of a 1,200 acre land to open an assembly plant in the Maharashtra region in the country worth $10 billion. The plant will be opened by 2018, and another 10 facilities will become operational by the year 2020.

The new stores and facilities will give employment opportunities. With Apple’s own retail stores, Apple can maintain a high level of control regarding its supply chain, service, as well as pricing. Furthermore, the process will become much simpler with the elimination of 3rd party merchants.

Just recently, another plan of the tech giant to sell refurbished iPhones in the country has been rejected by Indian officials after a major criticism from environmentalists and competitors. This event has not discouraged Apple as it also intends to build a technology center in Hyderabad, India amounting to $25 million.

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