Apple Retail Stores Coming to India?

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Original poster
Apr 12, 2001
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Indian business newspaper Mint reports (via iPhone Hacks) that Apple may be preparing to open retail stores in India, dramatically increasing the company's presence in the country.
Apple Inc. may open its own shops following the Indian government allowing full ownership of single-brand retail stores by foreign companies, according to a senior official of the department of industrial policy and promotion (DIPP).

The maker of the iPad and iPhone has been in discussion with the department for some time and is keen to re-enter Indian market after an earlier bid to do so in 2006, said the official on condition of anonymity.
According to the report, Apple's interest comes as Indian regulators have eliminated ownership requirements that had previously required single-brand retail outlets such as Apple Stores to have at least 49% domestic investment.

One potential hurdle does remain, as ventures with high levels of foreign investment such as what Apple would offer will be required to source 30% of their product value from small businesses in India. But regulators appear willing to address that requirement as well depending on Apple's official analysis of the viability of a retail effort in India.
When asked whether the 30% local sourcing clause will be a hindrance, the DIPP official said, "Let Apple finalize its business plan and the investment it wants to make. If they tell us that the 30% sourcing is a problem, at that stage we will look into it," he said.
The report notes that Apple attempted to create an Indian presence back in 2006 with a tech support center, but the company quickly abandoned those plans.

Article Link: Apple Retail Stores Coming to India?
 

sergey19

macrumors member
Oct 13, 2010
96
0
So lets see...

Retail stores in China, factories in Brazil, and now possibly retail stores in India.

Seems like Apple is really going after BRIC countries...

But come on :apple:, what about Russia?
 

Small White Car

macrumors G4
Aug 29, 2006
10,905
1,182
Washington DC
Hmm. Apple's having trouble with a 30% requirement? Who could have guessed??

:p

But seriously, they could probably address the local-ownership part by finding a company to manage the workers. That's how most US office buildings handle security or cleaning services. They just hire one company and that company sends workers that they pay.

Apple could do that for all of their floor staff and that would probably account for more than 30% of their operating costs.
 

pandamonia

macrumors 6502a
Nov 15, 2009
585
0
If its anything like the call centers that have moved their the customer service will be crap.

An iPhone will be around 1,000,000,000 rupees or something. something 90% of india can't afford.
 

WildCowboy

Administrator/Editor
Staff member
Jan 20, 2005
17,361
1,314
But seriously, they could probably address the local-ownership part by finding a company to manage the workers. That's how most US office buildings handle security or cleaning services. They just hire one company and that company sends workers that they pay.

Apple could do that for all of their floor staff and that would probably account for more than 30% of their operating costs.
That wouldn't work. The requirement is 30% of the value of the products being sold. From the article:

However, proposals involving FDI beyond 51% will have to mandatorily source at least 30% of the total value of the products sold from Indian small industries, village and cottage industries, and artisans and craftsmen.
 

Small White Car

macrumors G4
Aug 29, 2006
10,905
1,182
Washington DC
That wouldn't work. The requirement is 30% of the value of the products being sold. From the article:
Well, we don't know what Apple's overhead on the stores is so we can't say for sure it's impossible. But yeah, you're probably right that it isn't 30% even if they outsource every function of the store.
 

reevans

macrumors member
Jan 11, 2007
65
9
Canada
Prohibitive costs due to corruption and red tape

Anyone who has tried to start a foreign owned business in India knows how many barriers there are to set up and operate. Indian officials are many and have their hands out for bribes and payoffs.

Corruption has nothing to do with poverty but is based solely on a moral choice. These choices that are commonly made in India are to the detriment of the entire country and keep them in poverty in my opinion. I have seen it first hand and am anxiously waiting for India to grow up and leave bribery as a way of life behind her.

Apple can expect that half of the money needed to open a store in India will end up being paid in bribes. I can't see Apple doing that.
 

WildCowboy

Administrator/Editor
Staff member
Jan 20, 2005
17,361
1,314
Well, we don't know what Apple's overhead on the stores is so we can't say for sure it's impossible. But yeah, you're probably right that it isn't 30% even if they outsource every function of the store.
What I'm saying is that overhead doesn't factor in at all. It's about the actual products being sold in the stores. 30% of their component value need to be sourced from Indian small businesses and craftsmen.

It's about supporting Indian small industries and craftsmen, not service jobs.
 

Indian99

macrumors newbie
Jan 20, 2012
2
0
Ignorance/Bliss

Sounds like Pandamonia needs some lessons about the World. Or I think you are comfortable in thinking like the frog in the pond that "this is the sea." Pandamonia, there is a big world out there other than USA. Or you may be one of those Americans for whom the IGNORANCE IS A BLISS. I think you have no clue about the exchange rate of US Dollars vs Indian Rupees. BTW, I agree with Avatar74 :)
 

Small White Car

macrumors G4
Aug 29, 2006
10,905
1,182
Washington DC
What I'm saying is that overhead doesn't factor in at all. It's about the actual products being sold in the stores. 30% of their component value need to be sourced from Indian small businesses and craftsmen.

It's about supporting Indian small industries and craftsmen, not service jobs.
Then it would say "30% of components," right? Why does it say "component value?"

I took that to mean it's exchangeable to other things as long as the money works out. Like, if you sold a $100 item made in China but paid someone in India $30 to do the work of selling it, you're at 30% of the value.
 

Indian99

macrumors newbie
Jan 20, 2012
2
0
Ignorance/Bliss

If its anything like the call centers that have moved their the customer service will be crap.

An iPhone will be around 1,000,000,000 rupees or something. something 90% of india can't afford.
Sounds like Pandamonia needs some lessons about the World. Or I think you are comfortable in thinking like the frog in the pond that "this is the sea." Pandamonia, there is a big world out there other than USA. Or you may be one of those Americans for whom the IGNORANCE IS A BLISS. I think you have no clue about the exchange rate of US Dollars vs Indian Rupees. BTW, I agree with Avatar74 :)
 

mkrishnan

Moderator emeritus
Jan 9, 2004
29,776
12
Grand Rapids, MI, USA
Speaking as an Indian, I'm waiting for the recursive jokes to begin...
:D No, you go first. :D

But come on :apple:, what about Russia?
BRIC is the place to be. I thought it was rumored last year that Apple would have a Moscow store before year end? Further west in Russia, though, it sounds like people are still doing things like going to Finland to buy Apple stuff. When you consider China (and India) for that matter, the number of large cities in China is huge -- there's probably room for a huge amount of retail expansion outside of Beijing, Shanghai, and other largest cities.

An iPhone will be around 1,000,000,000 rupees or something. something 90% of india can't afford.
Your math (and research) skills are less than impressive. The iPhone 4S is already on sale in India since 11/2011. AFAIK 4S prices go as low as around RS45,000 and 3GS around RS20,000.

Anyways, the issue of Indian FDI and retail rules is a complicated one. I think things have moved slowly in the right direction, though. I think I ended up debating this on Twitter a while ago with other MR'ers, but my feeling is that keeping global products out of the hands of the Indian middle class just doesn't make sense. In the much longer term, both India and China have huge undeveloped potential in terms of highly skilled knowledge workers developing technology not just for American and European users but for other Inidans and Chinese. We're just seeing the beginning of that. Having the iPhone in those Chinese or Indian hands increases the likelihood that some of that innovation will be on iOS, and people here may well end up benefitting from that as well.
 

coffey

macrumors newbie
May 21, 2008
13
0
If its anything like the call centers that have moved their the customer service will be crap.

An iPhone will be around 1,000,000,000 rupees or something. something 90% of india can't afford.
I agree.

A decade ago tech companies tried to outsource their technical support to India and it was a disaster. Cultural and language differences made the support useless. I am surprised that Apple considered it at any time and I hope it is not part of their plan for India.
 

Chintan100

macrumors member
Jul 6, 2009
49
0
India
If its anything like the call centers that have moved their the customer service will be crap.

An iPhone will be around 1,000,000,000 rupees or something. something 90% of india can't afford.
Weak at math? An iPhone 4S 16GB is 44,500 Rs. (~ 885 USD). I bought one before a month.

And do you know how much 10% of India is? :)

Boy, you are really weak at math. :p
 

3282868

macrumors 603
Jan 8, 2009
5,281
0
Speaking as an Indian, I'm waiting for the recursive jokes to begin...
lol sorry, that was funny mate :)

At least the call centers will be local (sorry, couldn't resist) :)

Happy Friday everyone!

- UPDATE: Apple did use call centers based in India for AppleCare Tech Support a few years ago. It was rare, but AAPL did so as a test to lesson the strain on North American call centers that are primarily based in Canada (and a few in the U.S.). Due to complaints from AppleCare owners as AppleCare is a 3-year paid upfront option unlike what the free/"pay per call" service support from other tech companies such as Dell, this practice was ceased. I believe JD Power hit AAPL hard in customer satisfaction when this occurred.
 
Last edited:

416049

macrumors 68000
Mar 14, 2010
1,844
2
Anyone who has tried to start a foreign owned business in India knows how many barriers there are to set up and operate. Indian officials are many and have their hands out for bribes and payoffs.

Corruption has nothing to do with poverty but is based solely on a moral choice. These choices that are commonly made in India are to the detriment of the entire country and keep them in poverty in my opinion. I have seen it first hand and am anxiously waiting for India to grow up and leave bribery as a way of life behind her.

Apple can expect that half of the money needed to open a store in India will end up being paid in bribes. I can't see Apple doing that.
maybe for most other companies but since its apple most of these barriers will probably magically disappear.
 
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