India is really pissing on Apple, expecially after the major financial commitments that Tim announced last week.
Moving forward.... Since the rule applies to "single-brand" stores, maybe Apple could modify its retail strategy in India to increase the emphasis on 3rd-party accessories. Those accessories are not Apple-branded products. Potentially Apple could create a retail model (just for India) that heavily includes Apple products, but also includes enough focus on the non-Apple products to fit legitimately in the multi-brand category.
That is a rather jaundiced viewpoint. Apple have asked to dump used phones on the Indian market, and India has rightly said no to the proposal, which I think most countries would do that had local manufacturers of competing products who were actually investing in the local economy.
The store ruling is similar. They have a rule that benefits the local economy that existed before Apple made their application. Why should India make an exception for Apple?
A $10M investment in a facility working on maps is hardly major, and it isn't actually a case of Apple establishing an actual direct presence in India, their map venture is in reality more a case of them engaging a local Indian firm to do work for them. If the proposed investment by Foxconn goes ahead, that certainly would be a lot more significant, but once again, Apple itself would still not have a direct presence in India, which I don't blame them for in the least, given the high-handedness of the Indian Judiciary and Tax department. I don't think Tim Cook wants to be subpoenaed to appear in an Indian court, every time some minor local supplier thinks they have a grievance, which is what happened to the chairman of Samsung Electronics, Lee Kun-hee. I wonder if the arrest warrant is still outstanding.
What is wrong with Apple selling refurbished phones at a reduced rate in India? If they are high quality and Apple certified, it gives the Indians a way to get into the iOS ecosystem at a lower price point they could otherwise not afford. It seems more that the Indian government is worried that people would buy them over what is produced there, but choice is good right? Competition is good right? That is unless Apple is providing the choice and competition.
Can anyone shed more detail on this subject? From a quick look it feels like other countries work hard to keep foreign companies out or at least make it difficult. Is this something the US needs to step up a bit or not?
Well, there are a LOT of Indians, so even if the median income is low, there are still plenty of people who are earning a lot more than that, and can (and do) easily afford to buy Apple products.
You are right. There are apparently 160 million households that make between $50,000 - $250,000 and 16 million that make more. So that looks like a decent customer base.
One, this is the rule in India, so it's by no means unique to Apple. Everyone has to play by it. Two, it's dumb from India's standpoint, since it impedes opportunities for local employment (I am surprised that the government does not consider that 'local sourcing') and future and/or collateral (e.g., Maps-type) investments that would result from from the presence of the foreign retailer.
Three, perhaps most importantly (and thankfully), it'll probably be overturned. This is typical of the 'process' that has to be seen as being followed.
It's a bad rule. India could do so much, but the web of government regulations and protectionist crap is impeding business opportunities and pushing the price of products up.
I'm not sure why Apple even wants stores in India. Their annual median per capita income is $616, ranking them 99th among 131 other countries. How many Indians can even afford an iPhone?
88% of all the wealth belongs to 20% of the population. Of those 140M people, make more than $5K on average. Of those, 140M make more than $30K on average.
That 140M are obviously rich enough to buy an Iphone and the equivalent pop in the US is probably only 225M
Because we are not an undeveloped dirt poor overpopulated sewer.
Sure we are. Obama has surely tried his best to turn the USA into a dirt poor, underdeveloped, overpopulated sewer, with his illegal and criminal, open borders policy, inviting the scum of the world, terrorists and all sorts of illegals to come here.
As for India, Apple needs to stop sucking up to these third world trashy countries, that have massive amounts of corruption.
One, this is the rule in India, so it's by no means unique to Apple. Everyone has to play by it. Two, it's dumb from India's standpoint, since it impedes opportunities for local employment (I am surprised that the government does not consider that 'local sourcing') and future and/or collateral (e.g., Maps-type) investments that would result from from the presence of the foreign retailer.
Three, perhaps most importantly (and thankfully), it'll probably be overturned. This is typical of the 'process' that has to be seen as being followed.
It's a bad rule. India could do so much, but the web of government regulations and protectionist crap is impeding business opportunities and pushing the price of products up.
Any proof of that? Prices of other smartphone brands are lower than in the more developed countries
That is a rather jaundiced viewpoint. Apple have asked to dump used phones on the Indian market, and India has rightly said no to the proposal, which I think most countries would do that had local manufacturers of competing products who were actually investing in the local economy.
The store ruling is similar. They have a rule that benefits the local economy that existed before Apple made their application. Why should India make an exception for Apple?
A $10M investment in a facility working on maps is hardly major, and it isn't actually a case of Apple establishing an actual direct presence in India, their map venture is in reality more a case of them engaging a local Indian firm to do work for them. If the proposed investment by Foxconn goes ahead, that certainly would be a lot more significant, but once again, Apple itself would still not have a direct presence in India, which I don't blame them for in the least, given the high-handedness of the Indian Judiciary and Tax department. I don't think Tim Cook wants to be subpoenaed to appear in an Indian court, every time some minor local supplier thinks they have a grievance, which is what happened to the chairman of Samsung Electronics, Lee Kun-hee. I wonder if the arrest warrant is still outstanding.
What is wrong with Apple selling refurbished phones at a reduced rate in India? If they are high quality and Apple certified, it gives the Indians a way to get into the iOS ecosystem at a lower price point they could otherwise not afford. It seems more that the Indian government is worried that people would buy them over what is produced there, but choice is good right? Competition is good right? That is unless Apple is providing the choice and competition.
Do you approve of China dumping steel in the US and every other market stupid enough to let them, with the consequence that local steel manufacturers are put out of business? The US just introduced 522% import duty on steel from China because of the dumping. Was that the wrong thing to do, given that it deprives local businesses of choice and competition?
So no Tiffany Stores in India? No Ralph Loren? No Coach? No Starbucks? No single brand outlet stores? Very strange rules.
India is a big producer of coffee beans, so yes there is starbucks and they source their beans from india. A lot of the clothing, including stuff available in the US, is actually made in india and bangladesh. So, all the clothing brands are present.
Most of the chinese, korean, japanese electronics brands (Sony/LG/Samsung/Phillips/Hitachi/Sansui etc.) have single stores in india. So, sourcing 30% locally must not be as big a problem as it is being made out to be. Most of these companies (microsoft/google/samsung/IBM/HP etc.) atleast have software development centers here, so that must contribute some part to the local sourcing too.
These rules exist since Indian economy started a transition from a protected-socialist economy to a capitalist one pretty late (1991). Such drastic transition needed to be slow, and local industry needed to be given time and space to try and compete. Many industries have regularly been freed every 2-3 years, and single-brand retail will be too one day when the time is right.
I would have more respect for India's protectionist laws if the government also prioritized welfare protections for their poor. As I understand it, their levels of income inequality are quite atrocious. With this in mind, their strict rules on foreign investments just seem to be for the benefit of their wealthy class.
Lets see Accident insurance for all at premium of Rs.12/- an year ($0.20 per year) and Life Insurance for a premium of Rs.330 per year ($6 per year) is welfare enough?
No taxes for farmers (60% of the people) is welfare enough?
Free 35 kg of rice or wheat every month to people in poverty is welfare enough?
guaranteed 100 days of wage-employment in a year to a rural household is not welfare enough?
India has many problems - illiteracy, corruption at various levels, bureacratic apathy, population, lack of oil resources etc. etc. - but lack of welfare schemes is not one of them. There is a reason india has never presented a 'surplus' budget in the 69 years of its independent existence.
Can anyone shed more detail on this subject? From a quick look it feels like other countries work hard to keep foreign companies out or at least make it difficult. Is this something the US needs to step up a bit or not?
Okay that needs a little bit of a history lesson. The fact is back in the 70s-80s all economies in the world were protectionist to a large extent. In the 90s US started pushing heavily for 'globalization' through their lackey called the IMF at UN. But you can't ask others to open their markets to you by keeping your markets closed. So, the US kept their markets more open than others, because in the net calculations US technology, manufacturing heft, knowhow would generate a lot more wealth for the US.
It did, but it also meant that other countries which started seeing the light of day, and getting their acts together. Which resulted in the rise of manufacturing in China, Software development and services in India etc. etc.
But since the biggest-baddest corporations are still US based MNCs, US still wants countries to open up, and developing countries are still looking for a good balance where they can satisfy US corporations, government, local lobbies, local industry and most importantly jobs for the poor. This balance takes various shapes and sizes in legislation and ground realities.
So no Tiffany Stores in India? No Ralph Loren? No Coach? No Starbucks? No single brand outlet stores? Very strange rules.
India is a big producer of coffee beans, so yes there is starbucks and they source their beans from india. A lot of the clothing, including stuff available in the US, is actually made in india and bangladesh. So, all the clothing brands are present.
Most of the chinese, korean, japanese electronics brands (Sony/LG/Samsung/Phillips/Hitachi/Sansui etc.) have single stores in india. So, sourcing 30% locally must not be as big a problem as it is being made out to be. Most of these companies (microsoft/google/samsung/IBM/HP etc.) atleast have software development centers here, so that must contribute some part to the local sourcing too.
These rules exist since Indian economy started a transition from a protected-socialist economy to a capitalist one pretty late (1991). Such drastic transition needed to be slow, and local industry needed to be given time and space to try and compete. Many industries have regularly been freed every 2-3 years, and single-brand retail will be too one day when the time is right.
Don't try to tell me that the transition from a protected socialist economy to a capitalist one "needed to be slow." That's complete nonsense. The only people who "needed" it to be slow are the fat-cat government bureaucrats and politicians who line their pockets with cash. There's a lot of people who stand to lose out if the populace is able to stand on its feet. Those people want large swaths of the population to remain in poverty. The protected socialist economy was based on early India's asinine ideas of spreading the wealth around. All it did was create a bloated, corrupt government bureaucracy rotten to its core that starved the populace and continues to do so to this day. The great result of the noble ideas of Nehru was the "License Raj", a complex maze of dozens of government agencies who needed to be satisfied before one could do any kind of business in India, and even then, the government would tell you exactly how many goods you could produce and how much you could charge. My grandfather waited seven years for a Bajaj scooter. The reason was that some government officer thought it was a good idea to put a cap on how many scooters Bajaj could produce, despite the fact that the demand was twice the limit. That officer probably had a powerful buddy who was hoping to sell some scooters for a handsome profit and this officer wanted to keep his buddy happy. People think the American government is inefficient and corrupt. The Indian government redefines those terms. It is rotten to its core.
India transitioned to a capitalist economy because it had no choice, not because it wanted to give local industry time and space to try to compete. Those local industries produced substandard goods but for years, they got away with it because the government gave them a monopoly. Customers had no choice but to buy from them, so those industries happily sold third-rate trash. Finally though, the government couldn't pay its bills. India had about three weeks of foreign exchange left. It was forced to mortgage its entire gold reserves to get a loan from the IMF. In Indian culture, mortgaging one's gold is a big, big no-no and the incompetent fat cats in the Indian government brought India to that stage.
The idea that the Indian government is trying to make the transition to capitalism gradual is utterly asinine. The politicians and bureaucrats are just trying to protect their jobs. They wouldn't be able to supplement their income with a steady supply of bribes if it got too easy to do business.
Comments
http://www.samsung.com/in/aboutsamsung/samsungelectronics/india/manufacturing.html
88% of all the wealth belongs to 20% of the population.
Of those 140M people, make more than $5K on average.
Of those, 140M make more than $30K on average.
That 140M are obviously rich enough to buy an Iphone and the equivalent pop in the US is probably only 225M
As for India, Apple needs to stop sucking up to these third world trashy countries, that have massive amounts of corruption.
India is a big producer of coffee beans, so yes there is starbucks and they source their beans from india. A lot of the clothing, including stuff available in the US, is actually made in india and bangladesh. So, all the clothing brands are present.
Most of the chinese, korean, japanese electronics brands (Sony/LG/Samsung/Phillips/Hitachi/Sansui etc.) have single stores in india. So, sourcing 30% locally must not be as big a problem as it is being made out to be. Most of these companies (microsoft/google/samsung/IBM/HP etc.) atleast have software development centers here, so that must contribute some part to the local sourcing too.
These rules exist since Indian economy started a transition from a protected-socialist economy to a capitalist one pretty late (1991). Such drastic transition needed to be slow, and local industry needed to be given time and space to try and compete. Many industries have regularly been freed every 2-3 years, and single-brand retail will be too one day when the time is right.
Lets see Accident insurance for all at premium of Rs.12/- an year ($0.20 per year) and Life Insurance for a premium of Rs.330 per year ($6 per year) is welfare enough?
No taxes for farmers (60% of the people) is welfare enough?
Free 35 kg of rice or wheat every month to people in poverty is welfare enough?
guaranteed 100 days of wage-employment in a year to a rural household is not welfare enough?
India has many problems - illiteracy, corruption at various levels, bureacratic apathy, population, lack of oil resources etc. etc. - but lack of welfare schemes is not one of them. There is a reason india has never presented a 'surplus' budget in the 69 years of its independent existence.
Okay that needs a little bit of a history lesson. The fact is back in the 70s-80s all economies in the world were protectionist to a large extent. In the 90s US started pushing heavily for 'globalization' through their lackey called the IMF at UN. But you can't ask others to open their markets to you by keeping your markets closed. So, the US kept their markets more open than others, because in the net calculations US technology, manufacturing heft, knowhow would generate a lot more wealth for the US.
It did, but it also meant that other countries which started seeing the light of day, and getting their acts together. Which resulted in the rise of manufacturing in China, Software development and services in India etc. etc.
But since the biggest-baddest corporations are still US based MNCs, US still wants countries to open up, and developing countries are still looking for a good balance where they can satisfy US corporations, government, local lobbies, local industry and most importantly jobs for the poor. This balance takes various shapes and sizes in legislation and ground realities.
India transitioned to a capitalist economy because it had no choice, not because it wanted to give local industry time and space to try to compete. Those local industries produced substandard goods but for years, they got away with it because the government gave them a monopoly. Customers had no choice but to buy from them, so those industries happily sold third-rate trash. Finally though, the government couldn't pay its bills. India had about three weeks of foreign exchange left. It was forced to mortgage its entire gold reserves to get a loan from the IMF. In Indian culture, mortgaging one's gold is a big, big no-no and the incompetent fat cats in the Indian government brought India to that stage.
The idea that the Indian government is trying to make the transition to capitalism gradual is utterly asinine. The politicians and bureaucrats are just trying to protect their jobs. They wouldn't be able to supplement their income with a steady supply of bribes if it got too easy to do business.