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With China's Oppo getting the Green Light to Open Flagship Stores in India, Analysts think Apple Could be Next

1 cover oppo stores in india approved


In July Patently Apple posted a report titled "Apple is Designing their Largest Retail Stores ever for India with Enough Class to make them Tourist Attractions." The report noted that Apple's top retail team of experts were in India to meet realtors. The report further noted that Apple was reportedly planning to open their largest Apple's Stores to date in India in terms of raw footage. The Indian report notes that the first Apple Stores in India will be between 10,000 and 15,000 square feet or roughly double the size of other global stores. The stores reportedly will be so beautiful that they'll be considered must-see tourist attractions.


A new report today provides a tiny ray of hope that Apple may be closer to getting the approvals for their new stores, though not exactly anything close to a green light.


Reuters is reporting that "India has given Chinese smartphone maker Oppo the go-ahead to open its own single-brand retail stores, boding well for rivals like Apple Inc which are seeking similar approvals.


Oppo has become the first pure play smartphone brand to win such a clearance in the world's No. 3 smartphone market, where Apple has been vying for a bigger market share."


It should be noted that Xiaomi already has a store in India and plans for another 100. So the Reuters report on this point is a little off center claiming that Oppo will be first.


With that said, the Reuters report quoted Tarun Pathak, an analyst at Counterpoint Research saying that the approval for Oppo "might mean approval in the near future for Apple, whose sales in India are mainly driven by its older generation iPhones. Opening a retail store will boost Apple's newer generation's also the experience that having a store allows you to offer to consumers" (Reuters).


In the Big Picture it's more Complicated working with India


While it sounds hopeful, we've been hearing about positive developments just aroung the corner for years with little reality to back it up. On the positive side of the ledger there has been some movement regarding foreign retail outlets being allowed to enter India behind the scene as noted in our August report titled "The Politics of Opening an Apple Retail Store in India Continued Today."


In the big picture Apple is fully aware that they're behind in India and are digging in and planning for the long haul. Yet the negotiations with the government, at least in press accounts, are that the two sides aren't seeing eye to eye on allowing parts to come into the country at a reduced tax rate for a period of time to allow a new supply chain to be built.


Of course if Apple is given the green light on their flagship stores, it will buy them three years to finish their negotiations that would open the door for manufacturing more iPhone models.


Yet it's hard to be optimistic about India. They want to have foreign plants making smartphones in India like in China but lack skilled labor and the will to allow companies like Apple to help build a new supply chain in India.


A new report from Reuters posted by India's Economic Times on Monday, states that "India's ambitions to become a smartphone-making powerhouse are foundering over a lack of skilled labor and part suppliers along with a complex tax regime, industry executives say.


Prime Minister Narendra Modi has championed a manufacturing drive, under the slogan 'Make in India', to boost the sluggish economy and create millions of jobs. Among the headline-grabbing details was a plan to eventually make Apple iPhones in India.


Three years on, as executives and bureaucrats crowded into a Delhi convention centre for an inaugural mobile congress last week, India has managed only to assemble phones from imported components.


While contract manufacturers such as iPhone-maker Foxconn Technology Co and Flextronics Corp have set up base in India, one of the world's fastest-growing smartphone markets, almost none of the higher value chip sets, cameras and other high-end components are made domestically.


Plans for Taiwan-based Foxconn to build an electronics plant in the state of Maharashtra, which local officials said in 2015 could employ some 50,000 people, have gone quiet.


According to tech research firm Counterpoint, while phones are assembled domestically because of taxes on imported phones, locally made content in those phones is usually restricted to headphones and chargers - about 5 percent of a device's cost.


"Rather than feeling that India is a place where I should be making mobile phones, it's more like this is the place I need to (assemble) phones because there is lower duty if I import components and assemble here," a senior executive with a Chinese smartphone maker said.


Others listed the lack of skilled engineers and a sparse network of local component makers. They also cited high-profile tax disputes between India and foreign companies such as Nokia. Nokia eventually suspended mobile handset production at its southern India facility.


The government realistically now says that it has a phased program to manufacture phones, aiming to step up value added locally every year. The Phased Manufacturing Program began in 2016 with the manufacture of phone chargers and batteries and envisages the production of higher-end components by 2020."


How this translates into Apple opening new iPhone facilities in India any time soon remains in the great unknown. Yet Apple remains positive about India. During Apple's May financial Conference Call Apple's CEO stated that "We set a new March quarter record for India where revenue grew by strong double digits. We continue to strengthen our local presence across the entire ecosystem and we're very optimistic about our Future in this remarkable country with its very large young and tech-savy population, fast growing economy and improving 4G infrastructure."


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