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Apple Inc. (AAPL) CEO’s India Visit, May Be A Failure

Apple stock

Apple Inc. CEO – Tim Cook – intends to give a push to his bestselling iPhones, and for this purpose, he recently made a visit to India. However, chances are the trip did not pay off as expected.

Apple does not meet the criteria

Citing people with the direct knowledge of the matter, a Bloomberg report informs that as per India’s Foreign Investment Promotion Board’s (FIPB) ruling, Apple will be required to comply with a regulation to procure 30% of the components locally, and then only it will be allowed to sell through its own retail stores. Currently, the US firm does not meet the criteria as it makes most of its products in China.

Apple, Inc (AAPL) Tim Cook

As per the report, companies with cutting-edge technology are provided waivers by India, but Apple cannot be certified for the exception as per the panel’s decision. The Indian Finance Minister – Arun Jaitley – needs to ratify the FIPB’s decision, and it could still be overruled, the report said.

Apple Inc. has tried hard to elevate the sales of its devices around the world, and for this purpose, it has made use of its stylish stores from New York’s Fifth Avenue to Tokyo’s Ginza. India is price-conscious, and most phone sales take place at small, congested street-corner shops where the carriers do not subsidize handsets through calling plans.

Ankur Bisen, the senior vice president of retail and consumer products at Technopak Advisors – a retail consultancy – said, “The stores are a very important piece in Apple’s brand-building strategy in India. They will help bring the brand alive to customers.”

iPhone – pretty expensive for most Indians

Apple offers its products at a premium to Indian consumers. More than 80% of the phones sold in the country cost less than $150 while the cheapest new iPhone – the 4-inch iPhone SE – costs Rs. 39,000 or equivalent to $577. The firm made a push to bring in and sell lower-priced refurbished iPhones in India, but was turned down due to the intense objection from the rivals.

In India – in the next five years – a billion new smartphones are projected to be sold backed by increasing incomes and new technologies. And, Cook is trying to capitalize on these growth prospects.

Apple Inc. is facing slowing growth in established markets, and for this reason, the Cook has likened India to China a decade ago. Only 2% of the shipments were made to India, but the iPhone sales in India increased by 56% in the March quarter as more consumers from India’s burgeoning middle-class aspire to Apple devices.

Apple has made use of several techniques such as ads, monthly-payment options and expanded distribution through third-party vendors so as to ramp the sales in the country. A Times of India report stated that the firm was able to grow its revenue to $1bn last year because of all these.

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Aman is MBA (Finance) with an experience on both marketing and Finance side. He has work as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, playing PC games and cricket.

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