Improve infra for Apple to invest

Apple chief executive Tim Cook’s four-day visit to India did not lead to announcement of any major investment decisions. But the visit was important for the potential it holds for future. Apple is the world’s top technology giant and the most valuable company with $ 233 billion in reserves, looking for opportunities to expand and invest. India has till now not figured much in its market map. Its most important product, iPhone, is yet to make a major impact in India. Though iPhone sales have registered an increase in the recent past, it is not the market leader, as it is in countries like the US and China. But sales in China have slowed down for various reasons including the economic slowdown there. Therefore, for the first time in the last 13 years, the company’s revenues and profits declined in the last quarter and so it is looking for new areas of growth.

Tim Cook opened Apple’s first development centre in Hyderabad to work on its Apple Maps project and announced the decision to set up an app design and development centre in Bengaluru. These are R&D-oriented ventures and not investment projects. But Cook revealed some of his future plans like bringing Apple Pay – the company’s mobile payment and digital valet service -- to India and entering alliances with big telecom players to take part in the 4G revolution. He met some important telecom industry leaders too. But there was no clear word on setting up production facilities in India. Apple has for some time sought permission to import and sell its refurbished iPhones in India at a cheaper price, but the proposal has not found favour in the country. The possibilities of manufacturing iPhones in India and opening retail stores were discussed in Cook’s meeting with Prime Minister Narendra Modi. Opening of stores will call only for some changes in rules, but setting up manufacturing facilities may be more demanding.

Most of Apple’s production facilities are based in China. But production costs are rising there. China is also the iPhone’s biggest market. The Chinese government’s policy of encouraging home-grown technology firms and demands on Apple to compromise on its privacy policy, which the company is averse to concede, may create problems in future. Though Apple is still investing in China, as seen by its recent big investment in a ride-hailing company, it may be looking for other options. India will have to improve its infrastructure and make changes in many of its rules if it wants the company to consider the Indian option.