Apple has an egg problem. The problem is, they tend to keep their eggs all together. They keep them all together in one basket. In terms of devices, the iPhone is that basket. Unfortunately, the markets that have made Apple the most profitable business in the world, are growing weary of rebuying the same phone every year, and Apple had to think about other baskets. They attempted to update the iPhone without the phone, the iPod, and that didn’t make much of a difference. They took the giant iPhone, the iPad, and made it even bigger, then smaller, and that hasn’t done so well. They made the iPhone tiny and put a strap on it (and dependent on a regular size iPad) and the Apple Watch is still waiting for it’s time. They took the iPhone back to 5 with the SE, and no one seemed impressed. It seems that the only other basket that worked for Apple was China, but the bottom fell out of that basket.
While Apple saw double digit losses in all it’s hardware sales, and realized that China would not be the saving grace that they believed it would be, Tim Cook began to speak of another market that would surely place Apple back in to an area of sales growth. That market is India. While most of the mobile news coming out of India over the last year has been about the Freedom 251, the world’s cheapest smartphone which retailed for around $4 American. Of course, there is much more to the story of the Freedom 251, yet that is not what surprises this blogger. The surprise to me, is a market in which the biggest news has been about how cheap a phone can be made, Apple thinks they will ease their woes with a hyper-premium priced iPhone. In any case, Apple’s plans have hit a snag.
Apple had planned to open three Apple Store locations in India. India has a rule for any foreign companies opening a store within it’s borders that at least 30% of goods sold must be manufactured or produced domestically. Apple products of course do not meet this criteria. India made an exemption for this rule though for cutting edge or state of the art goods. Apple, of course, applied for this exemption. The exemption has been denied
A source told Reuters;
“They did ask for a waiver but didn’t provide any material on record to justify it. The decision was taken only after a thorough examination of their application”
The waiver is only available for state of the art or cutting edge technology. After a “thorough examination”, India has deemed that Apple’s products are neither state of the art or cutting edge. Apple’s previous practice of holding back on new technology until it has been tried and issues worked out by competitors, and of course, costs of the technology has decreased, has proven very profitable in the past for Apple. Now it may just be costing them a very important tool in getting their product in to their “Hail Mary” market. With Apple’s policy of making repairs of their products near impossible for any third parties, how will Apple deal with India, when their only method of sale are third party vendors? Perhaps instead of car share services in China, Apple should be investing in courier services in India.