Apple to Bolster Presence in India Through Tax Concessions and New Factories

[MacRumors]

Following reports this month that Apple has been in talks to manufacture its products locally in India, as well as set up a distribution center in the country, an article by Bloomberg today suggests that the Cupertino company is now asking India to offer up tax concessions on iPhones created within its borders.

According to people familiar with the matter, Apple is asking for lower import taxes and manufacturing duties, which could lead to lower-cost iPhones -- a solution that Apple CEO Tim Cook has admitted is needed in India.

In a separate report by The Times of India, industry sources claim that Apple is looking to build an iPhone manufacturing plant in Bangalore, India and begin production as soon as April. Specifically, Apple supplier Wistron is said to be the partner for the Bangalore facility, and the plant is poised to be a major contributor to the Indian iPhone supply chain by the end of 2017.

Top sources in the company confirmed to TOI that Apple is "very serious" about beginning assembly operations --and thereafter full manufacture -- in India by the end of next year. "Bangalore is being looked at seriously," said multiple sources within the company. Local manufacture will help Apple price its phones competitively as full imports attract 12.5% additional duty.

Earlier in the year, Apple announced plans to build an iOS App Design and Development Accelerator in Bangalore in order to support engineering talent and boost growth in India's iOS developer community. Around the same time that the Accelerator was announced, the company revealed plans for a new development center in Hyderabad, India focused on Apple Maps development.

The concessions and new Bangalore-based facility are the newest steps in Apple's attempt to bolster its presence in India. This year, Apple struggled with the government's rules on foreign direct investments, but a ruling over the summer finally cleared the way for Apple to begin expanding its retail presence in the country. Despite India's own growth as the third-largest smartphone market in the world, Apple sold 35 percent fewer iPhones in India throughout 2016 than it did in 2015.

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Article Link: Apple to Bolster Presence in India Through Tax Concessions and New Factories

 

[Juicy Box]

Despite India's own growth as the third-largest smartphone market in the world, Apple sold 35 percent fewer iPhones in India throughout 2016 than it did in 2015.

No wonder why. Even Apple's cheaper phones are pretty expensive for a very poor population.

When there are so many other cheaper phones that can do much of what expensive iPhones can do, it is hard for Apple to compete.

 

[RickeshPatel]

No wonder why. Even Apple's cheaper phones are pretty expensive for a very poor population.

When there are so many other cheaper phones that can do much of what expensive iPhones can do, it is hard for Apple to compete.

The population in total actually isn't as poor. The income gap is wider but there's still a large percentage of the population that can afford the things we do in America. India's economy is now larger than the U.K's by the way.

 

[Juicy Box]

The population in total actually isn't as poor. The income gap is wider but there's still a large percentage of the population that can afford the things we do in America. India's economy is now larger than the U.K's by the way.

I didn't mean everyone in India is poor. But, it is a very poor country.

Also, comparing the UK economy to India isn't exactly a good comparison. I think India has like 20 times the amount of people that the UK has. Maybe more.

My wife is Indian, and we talk about visiting India every once in a while. The way she talks, the middle class of India would be like living in poverty here in the US.

Yes, not everyone is like that, and it is getting better over time. But, I don't think Apple has much of a chance to have a large market share of India, unless they have a much cheaper phone. Also, many of the feature of the iPhone do not work in India.

 

[Jyby]

Apple should bring manufacturing back to America... If other countries want our products they should pay more than Americans are paying..

 

[Mavelous]

Apple should bring manufacturing back to America... If other countries want our products they should pay more than Americans are paying..

Maybe Trump can make some crony deals to get it done......AND lower that pesky minimum wage

 

[Jyby]

Maybe Trump can make some crony deals to get it done......AND lower that pesky minimum wage

That's aweful. Apple and Tim Cook should do it themselves without a deal. And wages should be raised not lowered, but that's getting off topic.

 

[kstotlani]

Apple should bring manufacturing back to America... If other countries want our products they should pay more than Americans are paying..

And they do.

 

[patrickbarnes]

You don't "bolster your presence" *through* tax concessions. You do it *for* tax concessions.

 

[Sefstah]

Trump will tax the world to import products to the US, so it doesn't matter

 

[thewitt]

Trump will tax the world to import products to the US, so it doesn't matter

And does it make you feel better to make baseless, false statements against the President eject?

 

[patrickbarnes]

And does it make you feel better to make baseless, false statements against the President eject?

This is a thread about India, not Putin's stooge.

 

[MalcolmTucker]

The population in total actually isn't as poor. The income gap is wider but there's still a large percentage of the population that can afford the things we do in America. India's economy is now larger than the U.K's by the way.

There's certainly a legal advantage for Apple to perform business in India. A few years ago, India Chip manufacturer, MediaTek, won a patent lawsuit against Qualcomm. The Supreme Court in India ruled that MediaTek didn't need to pay patent royalties they mimick functionality in Qualcomm chipsets it manufacturers.

Do note- at issue was 4G LTE technology and specifications.

The Supreme Court-equivalent ruled that it was up to the assemblers of the final products to self-regulate (and self-identify) they licenses they believe they owe a royalty to.

So with a ruling like this, in India, Apple could build phones that infringe on other patent portfolios intellectual property, then basically refuse to pay royalties to IP rights-holders depending on the way the wind blows and the price of the stock that day.

 

[Cineplex]

Apple should have built its spaceship there. India and China are more important to Tim than the domestic market.

 

[konqueror4u]

Apple should bring manufacturing back to America... If other countries want our products they should pay more than Americans are paying..

Apple is a MNC dude as a highly skilled worker I understand why companies need global presence. They will do business as per their growth strategy and it cannot be called greed as it is the natural tendency of a person to earn more. Apple needs other countries it is not the other way as you said. Apple cannot just rely on one market for growth. China and India has 33% of worlds population and cost of labor is 300%-400% cheaper then US and apple has to compensate the costs involved in R&D and developing software and still be competitive in global market so it has to cut the operating costs. I don't think imposing tariffs will help here as MSRP of the products goes north by 35%-45%. Ideally the only solution is to lower the minimum wage to the level of other countries in the world. US corporations need global presence for their growth it is not the other way. High paying jobs are not going to be there any more we should be competing with the world to retain jobs be it manufacturing or high technology jobs. I don't think companies will restrict their customer base to just 300 million people. I am just stating the facts. I have no intention to hurt others I am sorry if I did.
[doublepost=1483130225][/doublepost]

There's certainly a legal advantage for Apple to perform business in India. A few years ago, India Chip manufacturer, MediaTek, won a patent lawsuit against Qualcomm. The Supreme Court in India ruled that MediaTek didn't need to pay patent royalties they mimick functionality in Qualcomm chipsets it manufacturers.

Do note- at issue was 4G LTE technology and specifications.

The Supreme Court-equivalent ruled that it was up to the assemblers of the final products to self-regulate (and self-identify) they licenses they believe they owe a royalty to.

So with a ruling like this, in India, Apple could build phones that infringe on other patent portfolios intellectual property, then basically refuse to pay royalties to IP rights-holders depending on the way the wind blows and the price of the stock that day.

Mediatek is not an Indian chip manufacturer it is taiwanese manufacturer and a global MNC . I think the issue is between Xiaomi-Qualcomm and mediatek where there was out of court settlement I believe as

http://www.ibtimes.com/xiaomis-patent-deal-qualcomm-could-pave-way-us-rollout-hurdles-remain-2210042
http://www.androidheadlines.com/201...lleged-patent-infringement.html#disqus_thread

Qualcomm leads in India with patent number.

 

[sudo1996]

The population in total actually isn't as poor. The income gap is wider but there's still a large percentage of the population that can afford the things we do in America. India's economy is now larger than the U.K's by the way.

In America, even people in the ghetto have iPhones...

 

[konqueror4u]

I didn't mean everyone in India is poor. But, it is a very poor country.

Also, comparing the UK economy to India isn't exactly a good comparison. I think India has like 20 times the amount of people that the UK has. Maybe more.

My wife is Indian, and we talk about visiting India every once in a while. The way she talks, the middle class of India would be like living in poverty here in the US.

Yes, not everyone is like that, and it is getting better over time. But, I don't think Apple has much of a chance to have a large market share of India, unless they have a much cheaper phone. Also, many of the feature of the iPhone do not work in India.

Right now apple sells $650 iPhone at $1000 in India. I think it can increase its market share for sure if it can price it at $650. India is the worlds fastest growing major economy.
[doublepost=1483132328][/doublepost]

In America, even people in the ghetto have iPhones...

In India there are no two year contracts or upgrade plans like US. If people were asked to pay the full price of iPhone with out installments I think situation will be no different.

 

[sudo1996]

In India there are no two year contracts or upgrade plans like US. If people were asked to pay the full price of iPhone with out installments I think situation will be no different.

The phone is still expensive in the end, and someone has to pay for it. With the contracts, you pay for it through monthly service charges.

 

[konqueror4u]

The phone is still expensive in the end, and someone has to pay for it. With the contracts, you pay for it through monthly service charges.

I agree but with monthly charges you can find more customers.

 

[vvswarup]

Apple should bring manufacturing back to America... If other countries want our products they should pay more than Americans are paying..

Apple doesn't manufacture anything. It designs the components and pays suppliers to build them according to Apple's specifications.

If there existed a contract manufacturer Apple could collaborate with to "bring manufacturing back to America", one could have at least some basis for criticizing Apple for not creating jobs in the US. Such an entity doesn't exist today. Notice that I put that phrase in quotes because the job of assembling iPhones never existed in the USA.

 

[ARSC]

People here have to understand all iphones sold in india are without any contact so people buy them outright. The buying power has increased so much.

But apple will never have a large chunk of market share as alot of people prefer phones below 300 dollars. Brands like ViVO, OPPO, Xiaomi, samsung etc are making money.

 

[konqueror4u]

People here have to understand all iphones sold in india are without any contact so people buy them outright. The buying power has increased so much.

But apple will never have a large chunk of market share as alot of people prefer phones below 300 dollars. Brands like ViVO, OPPO, Xiaomi, samsung etc are making money.

I think the whole point of manufacturing in India is to lower the prices and attract more customers into its ecosystem.

 

[69650]

The richest company in the world wants tax concessions from one of the poorest countries in the world where children sleep on the streets. Cook has absolutely no sense of social responsibility.

 

[Sefstah]

And does it make you feel better to make baseless, false statements against the President eject?

Are you still in denial that Trump IS your President? If you have listened to the mans plan, you would know this was true. So does making baseless false statements make you feel better?

 

[ganja24]

whats up with Tim Curry and the indian flag? is he still American?