Tim Culpan, writing for Bloomberg, homes in on India’s desire that Apple build all devices sold in India in India:
A different Indian government policy, separate from the retail regulations, is pushing Apple to manufacture iPhones locally. The company isn’t keen, and the prospects in the near term are unlikely. To do so would require suppliers such as Taiwan’s Foxconn to hire tens of thousands of workers in single locations. Foxconn executives have stated their desire to avoid having China-style mega-factories in India.
If Finance Minister Arun Jaitley decides to uphold the ban, Apple has one final option. By signing a franchise agreement with a local Indian retailer, the company could get its shop fronts without the foreign investment. The business model would look a lot like McDonald’s, with Apple providing training and support while dictating layout, procurement and sales procedures.
An interesting idea. A strong precedent, giving up control of their brand in a way that Apple historically has fought against. Is that loss of control worth the money they could make in India?
I wonder if Apple could get around it by opening internet cafes or repair/training centers instead of stores.
The facilities would provide people with the opportunity to see/use Apple computers. It would be a place to go for help with Apple products. It would be a brand ambassador. It’s just no tech would be sold there. If someone wanted to buy something Apple makes, they would have to go to the Apple.com website and buy it.
Apple already has such a model in place with its APR’s (Apple Premium Resellers) They are trained by Apple, the APRs are designed like an Apple Store. Apple after sales support in India too is fantastic with a no questions asked replacement policy.
Secondly comparing it to McDonalds model is wrong simply because McDonalds already procures 100% of its supplies from India itself.
Where’s the beef?
Not sure if Mr. Culpan has ever been to an Indian McDonalds. Not that I am a fan of their junk elsewhere, but about the only thing they have in common is the yellow M. What exactly about GMO garbage and self-service at lunatic prices requires training… escapes me for now.
Apple should establish, if there is a chance to do local final assembly at acceptable quality for 30% of their products. That is what pretty much everybody else is doing to avoid huge import taxes and be able to have branded foreign shops. Given the quality of Indian-made electronics (they have none whatsoever), this could tarnish the brand. After all, the few Indians buying Apple products do it for the quality, not for the logo… Otherwise, just stick with premium resellers and give them better and more timely supply. It takes far too long for new products to become available, and the lack of BTO options is a real downer. All this can be solved without Apple-operated shops.