ECONOMY: With China Weakening, Apple Turns to India

Discussion in 'Economy & Infrastructure' started by Indx TechStyle, Feb 11, 2016.

  1. Indx TechStyle

    Indx TechStyle Perfaarmance Naarmal Senior Member

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    ECONOMY: With China Weakening, Apple Turns to India
    [​IMG]

    San Fransisco: As red-hot sales in China show signs of cooling, Apple Inc executives are touting India's growing appetite for iPhones. In an earnings call in which the company reported meager iPhone growth and forecast its first revenue drop in 13 years, the Indian market stood out as a rare bright spot for Apple.

    Sales of the company's flagship smart phone climbed 76 percent in the country from the year-ago quarter, Apple Chief Financial Officer Luca Maestri said on the call. And Apple CEO Tim Cook suggested more growth is on the horizon, noting the median age in India is just 27.

    "I see the demographics there also being incredibly great for a consumer brand, and for people that really want the best product," Cook said. "We have been putting increasingly more energy in India."

    Growth in India is a tantalizing prospect as Apple grapples with the economic downturn in China, its second largest market. While revenue in Greater China rose 14 percent in the last quarter, Apple is beginning to see a shift in the economy, particularly in Hong Kong, Maestri told Reuters in an interview.

    India cannot immediately offset Apple's woes in China, said analyst Neil Shah of Counterpoint Technology Market Research. The company averaged only about 450,000 smart phone shipments per quarter in India in 2015, compared with more than 15 million per quarter in China, Shah said.

    What's more, nearly 70 percent of smart phones sell for less than $150, leaving just a sliver of the market for Apple's high-end phones. The company's smart phone market share stands at less than 2 percent, Shah said.

    But the Indian market seems to be turning in Apple's favor. With 4G coverage spreading, Indian consumers will likely be more open to investing in smart phones, Shah said.

    Young consumers are already willing to spend heavily on the device at the center of their digital lives. As in China, Apple products are coveted status symbols.

    "The love for the iPhone is there," said Carolina Milanesi, chief of research and head of US business at Kantar Worldpanel ComTech, a consumer research firm.

    Apple's next task is expanding distribution in India, where its products are sold through third-party resellers. The company has filed an application with India's Department of Industrial Policy and Promotion to open its own stores, an Indian official told Reuters earlier this month.

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  3. HariPrasad-1

    HariPrasad-1 Senior Member Senior Member

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    It is a smart move by apple. there is nothing left in china. Even cheap manpower advantage which used be there in past is also being lost. The new attarctive destination is india. We can provide innovation, a brilliant man power for R & D, Manpower which can provide leadership as well as low cost work force. Chinese downfall shall be faster than its rise.
     
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  4. sasum

    sasum Atheist but not Communists. Senior Member

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    Will there be Chip-level manufacturing like in China? Or just assembling, packaging and distribution like Dell Computers?
     
  5. Gessler

    Gessler Regular Member

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    It's good that Foxconn is already here. They can really get the production & jobs going.
     
  6. Indx TechStyle

    Indx TechStyle Perfaarmance Naarmal Senior Member

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    Govt plans $10 billion investment in two semiconductor plants
    A senior govt official also said India will invest $400 million to develop a micro-processor
    [​IMG]
    File photo. India imports 65% of the electronic products sold in the country, mainly China-made. Photo: Bloomberg


    New Delhi: In line with the National Democratic Alliance (NDA) government’s flagship ‘Make in India’ programme, the centre plans to spend billions of dollars to put in place an ecosystem for electronics manufacturing in the country.

    The government plans to invest $10 billion in two computer chip manufacturing facilities that are due to come up, R.S. Sharma, secretary, department of electronics and information technology, said on Thursday at the first “Indian Electronics Expo” that was organized by the Electronics and Computer Software Export Promotion Council.

    Sharma also said that India will invest $400 million to develop a microprocessor.

    Mint had reported in January that India was planning to develop its own microprocessor design unit to cater to the growing demand for electronic devices.

    “These are part of the initiatives that we are taking to create an ecosystem that lays the focus on high-ended innovation,” said Sharma. “We have created a dedicated fund known as the Electronics Development Fund to leverage the use of venture capital funds to promote more start-ups in the country.”

    India imports 65% of the electronic products sold in the country, mainly China-made.

    If the situation is left unchanged, the country’s electronics import bill may well surpass its oil import expenses by 2020.

    While the demand for electronics hardware in India is projected to increase to $400 billion by 2020, the estimated domestic production could rise to $104 billion only, creating a gap of $296 billion, which has to be met through imports, according to a 2014 report by Deloitte Touche Tohmatsu India Pvt. Ltd.

    India has been considering setting up semiconductor manufacturing plants since 2007, but it was only in September 2013 that the government approved the setting up of two chip-making units, which are expected to draw Rs.63,000 crore investments.

    The two approved consortia are led byJaiprakash Associates Ltd, which is teaming up with International Business Machines Corp. (IBM) and Israel-based TowerJazz, to set up a Rs.29,000 crore unit in Greater Noida, and Hindustan Semiconductor Manufacturing Corp., which is in a partnership with French-Italian electronics and semiconductor maker STMicroelectronics NV and Malaysia-based wafer manufacturerSilterra, to set up a Rs.34,000-crore fab facility in Prantij, near Gandhinagar.

    “China is undoubtedly the major producer of electronic goods. Of late, many electronics giants are embarking on a China-plus strategy, mostly focusing on India,” said Sharma. “Coupled with the ‘Make in India’ and ‘Digital India’ programmes initiated recently by the government, the renewed interest in electronics production in India can help the country achieve the target set for zero import of electronics into the country by 2020.”

     
    Last edited: Feb 11, 2016
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  7. sasum

    sasum Atheist but not Communists. Senior Member

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    Amongst top 3 contract electronics manufacturers, only Foxconn (Taiwan) has a presence here, although they are not into component-level manufacturing. The other 2 giants, Flextronics (Singapore) & Jabil Electronics(St. Petersburg) have not even set up shop here. A smaller entity, Elcoteq started some low level work in 2009; now wound up not able to compete with Chinese products.
     
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  8. sasum

    sasum Atheist but not Communists. Senior Member

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    Dont jump with excitment at these announcements. Korea-based Intellect Inc, a semiconductor/chip fabrication company, announced in 2005 plans to set up a plant in Hyderabad with an estimated investmentof around $1.6 billion in two phases. This was to be the largest-ever investment proposal by any company in the Indian hardware sector in that period.The location would be the Hardware Park near Hyderabad. The Korean company, promoted by June Min, former vice-chairman of Daewoo Corporation and former senior MD of the LG group, had set up four similar fabrication plants in China and Taiwan. Named, 'India Semiconductor Manuf-acturing Company' (ISMC), the Korean company proposed to invest $600 million in phase I and another $1 billion in phase II. Commercial production, was to begin by end of 2006 or early 2007. 50 acres of land was allocated near the international airport at Shamshabad in Hyderabad. The company was to manufacture chips for SIM cards, micro processors and other applications, including telecom.
    Nothing came out of it. I put up a RTI application to DoE; got a one line reply, "the negotiations couldn't be concluded". Apparently, the canny Koreans were only interested in grabbing the 50 acres of land and build a housing project in a part of the plot.
    There is another story of SemIndia, proposed by an NRI in association with AMD. This was also a fraudulent proposition. Please Google for other such fishy projects.
     
  9. Indx TechStyle

    Indx TechStyle Perfaarmance Naarmal Senior Member

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    That was in 2005; era of congis.
    Many projects have come on ground. This one would too.
     
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  10. sasum

    sasum Atheist but not Communists. Senior Member

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