AWT News Update: March 17, 2017

Image via NASA

Image via NASA

Happy St. Patrick's Day. Today we look at ways that Apple is planning on staying "in the green" by expanding sales in two of the planet's most populous countries:

  • Apple will restart sales of iPhones in Indonesia in about two weeks following promises to build an R&D center in Jakarta
  • Over 100 small franchised Apple Authorized Retailer locations are expected to open in India 

The text version of the podcast can be viewed below. To listen to the podcast here, click the play button on the player below. Note to Apple News readers: you’ll need to visit Apple World Today in order to listen to the podcast.

Text Version

This is Steve Sande for Apple World Today, and you’re listening to the AWT News Update for March 17th, 2017. Happy St. Patrick’s Day, and if you’d like to know more about the actual St. Patrick — who had nothing to do with leprechauns or green beer — please follow the link in the show notes.

In order to keep reaching new heights in terms of stock price and market capitalization, Apple needs to continually grow its market in places that traditionally haven’t been big consumers of its products. Today we have two stories that talk about how Apple is making moves in two very populous countries.

First, Apple is about to restart iPhone sales in Indonesia in two weeks. The company had sold iPhones up to two years ago, but was told to stop doing so when new requirements in the country that were designed to encourage local manufacturing cropped up. The regulations would require Apple to make sure that 30% of the components in each iPhone were made locally in Indonesia. Well, Indonesia is the world’s fourth most populous country, with over 260 million citizens, so Apple couldn’t just ignore the request. But it also couldn’t guarantee that Indonesian iPhones would use locally source parts. So what’s happened is that Apple promised a research and development center in Jakarta that will receive $44 million in investment over the next three years. Apple is also working with one of its primary suppliers — Foxconn — to encourage the manufacturing of components in the country.

The next expansion is in the second most populous country in the world, India. Apple is planning to expand the number of Apple Authorized Reseller locations in the country by adding over 100 small stores. These stores will be 450 to 500 square feet in size, and will be franchised operations set up on ‘high-rental, high-street locations” in large cities in the country. The first group of stores is already being set up, in locations like New Delhi, Vasan Vihar, and Malviya Nagar. Mumbai, Bengaluru, Pune, and Chandigarh will also get reseller attention in the near future. By using a franchise setup, Apple can create a network of stores operated by people who know the local market and customs. Apple still wants to open its own stores in the future, although it is prohibited from doing so due to a similar local manufacturing requirement like that discussed in the Indonesia story earlier. Apple’s been trying to increase revenues in India with some unique marketing ideas. For example, the iPhone 6 was revived for India, using 32GB of storage and being sold exclusively through Amazon. Apple also wants to sell refurbished iPhones in India, although the government is pushing back on the concept as it would undercut the “Make in India” program designed to increase local manufacturing. Apple’s request to the Indian government has not yet been answered; the company wanted to sell refurbs and get tax breaks in India in exchange for setting up production in the country. Apple’s manufacturing partners are trying their best to build iPhones locally — Wistron is about a month away from starting production of the iPhone SE in Bengaluru, while Foxconn is working on a deal to build a plant in Maharashtra.

That’s all for today; I’ll be back Monday afternoon with another edition of the AWT News Update.