Apple Inc (NASDAQ:AAPL) has filed before the Indian government, for permission to begin a retail store in the country. Until now, the maker of the iPhone and iPads sold its much-sought after gadgets through resellers. The choice of the company to retail through its own outlets in India is due to certain changes. After data revealed that US domestic sales of the iPhones are likely to slow down, Apple Inc has expanded into emerging markets.
India is one of the largest markets outside of the US, and China, for Apple products. Therefore, it is strategic for the maker of the iOS devices to have its own retailing space to help speed the sales of the latest iPhones.
Emerging markets are crucial for Apple Inc (NASDAQ:AAPL). Since its biggest revenue earner, iPhone sales are declining both in the US as well as in China, markets such as India are important.
Latest data research has indicated that smartphone sale has matured and reached saturation in traditional markets in which Apple sold.
China’s massive slowdown in economy and the flattening sales there have prompted Tim Cook, the CEO, and his entourage to explore promising markets.
According to International Data Corporation data, Apple Inc (NASDAQ:AAPL) currently has 2% market share in India. However, small-sized OEMs and regional giants, Samsung Electronics, Xiaomi Corp, besides MicroMax Informatics Ltd, are all well-positioned to gain further market share.
Revised government rules
It appears that the decision by Apple Inc to directly retail in India is based on the November rule changes the government introduced. The revised laws do not require overseas companies to source 30% of their inputs locally. This is under the condition that they are selling a single brand of high-end technology products.
Thus, Apple Inc (NASDAQ:AAPL), which makes its products in China, is able to finally setup base in its second largest consumer segment, after US and China. Globally, Apple has over 460 stores, of which nearly 24 stores are in China alone. The Apple Stores in the US are known to earn the highest revenue-per-square-foot, and are expected to earn similarly in India as well.