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Apple Horse Trading in India

Discussion in 'World Economy' started by AbRaj, Jan 5, 2017.

  1. AbRaj

    AbRaj Captain FULL MEMBER

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    [​IMG]


    Apple Horse Trading in India
    By Tim Culpan
    PRASHANTH VISHWANATHAN/BLOOMBERG
    Tim Culpan
    Jan 3, 2017 11:01 PM EST

    Apple Inc. wants to be able to open its own stores in India.

    India's government wants Apple to make iPhones locally.

    And so the horse-trading begins.

    To open single-brand stores, foreign companies must buy 30 percent of their components in-country. Round one of the Apple-India tussle ended with victory for the visitor when officials announced a three-year grace period on that stipulation back in June.

    Now round two is underway, with Apple seeking tax concessions, including lower import and manufacturing duties, Shruti Srivastava of Bloomberg News wrotelast week. India doesn't look eager to give more ground because of the precedent it would set, Srivastava wrote Tuesday.

    That puts the ball back in Apple's court, with the world's largest company able to trade its three major assemblers -- Foxconn Technology Group, Pegatron Corp. and Wistron Corp. -- off against each other. Whichever of the Taiwan trio is most eager and able to take one for the team in India would secure itself huge brownie points in Cupertino.

    According to the Times of India, Wistron looks set to be that company and will fly the Apple flag when it starts "Make in India" iPhone assembly in April. With most of the supply chain still in China, and manufacturers facing dozens of challenges to operate in India, my sense is that Wistron would employ what I call the Brazil Solution.

    Bite of the Apple
    Wistron has the fewest iPhone-making facilities among suppliers
    Source: Apple Supplier Responsibility Report


    Instead of a fully fledged soup-to-nuts manufacturing operation, Foxconn (aka Hon Hai Precision Industry Co.) helped Apple get around Brazil's import tariffs by shipping partially assembled iPhones to the South American nation for local workers to slot together like Lego.

    Assuming the Times of India report is correct, it's possible that Apple agreed to pay for some or all of the equipment to be installed by Wistron, a strategy the California company has deployed on and off for more than a decade. In return, such facilities cannot be used to make products for competitors. Given the iPhone's annual cycle, this could result in a lot of idle time for Wistron in a country where laying off workers is extremely difficult.

    As the smallest of the three iPhone assemblers, Wistron can least afford the cost of setting up a dedicated Apple plant in India because electronics manufacturing is all about economies of scale (I doubt Foxconn's Brazil operation made much money). Yet it's also got a lot to gain by being the most eager to take on the task. The terms of the contract between Apple and Wistron -- and what was offered to other partners -- will be one of the industry's best-guarded secrets.

    Whatever the deal, such a move is just the kind of concession from Apple that Indian officials need to take back to their constituents so they can give ground elsewhere, including on tax breaks and product-labeling requirements.

    After years of doing business in China, Tim Cook has learned a lot about giving and saving face. Now it looks like he's deploying those lessons in India.

    This column does not necessarily reflect the opinion of Bloomberg LP and its owners.



    To contact the author of this story:
    Tim Culpan in Taipei at tculpan1@bloomberg.net

    To contact the editor responsible for this story:
    Paul Sillitoe at psillitoe@bloomberg.net
     
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  2. AbRaj

    AbRaj Captain FULL MEMBER

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    Why Apple’s India setback on tax breaks is far from a defeat
    According to a media report, Wistron is set to be the company that will fly the Apple flag when it starts “Make in India” iPhone assembly in April

    Tim Culpan

    [​IMG]
    India is not eager to give more ground to Apple because of the precedent it would send. Photo: Reuters
    Taipei: To open single-brand stores, foreign companies must buy 30% of their components in-country. Round one of the Apple-India tussle ended with victory for the visitor when officials announced a three-year grace period on that stipulation back in June.

    Now round two is underway, with Apple seeking tax concessions, including lower import and manufacturing duties, Shruti Srivastava of Bloomberg News wrote last week. India doesn’t look eager to give more ground because of the precedent it would set, Srivastava wrote Tuesday.

    That puts the ball back in Apple’s court, with the world’s largest company able to trade its three major assemblers—Foxconn Technology Group, Pegatron Corp. and Wistron Corp.—off against each other. Whichever of the Taiwan trio is most eager and able to take one for the team in India would secure itself huge brownie points in Cupertino.

    According to The Times of India, Wistron looks set to be that company and will fly the Apple flag when it starts “Make in India” iPhone assembly in April. With most of the supply chain still in China, and manufacturers facing dozens of challenges to operate in India, my sense is that Wistron would employ what I call the Brazil Solution.

    Instead of a fully fledged soup-to-nuts manufacturing operation, Foxconn (aka Hon Hai Precision Industry Co.) helped Apple get around Brazil’s import tariffs by shipping partially assembled iPhones to the South American nation for local workers to slot together like Lego.

    Assuming The Times of India report is correct, it’s possible that Apple agreed to pay for some or all of the equipment to be installed by Wistron, a strategy the California company has deployed on and off for more than a decade. In return, such facilities cannot be used to make products for competitors. Given the iPhone’s annual cycle, this could result in a lot of idle time for Wistron in a country where laying off workers is extremely difficult.

    As the smallest of the three iPhone assemblers, Wistron can least afford the cost of setting up a dedicated Apple plant in India because electronics manufacturing is all about economies of scale (I doubt Foxconn’s Brazil operation made much money). Yet it’s also got a lot to gain by being the most eager to take on the task. The terms of the contract between Apple and Wistron—and what was offered to other partners—will be one of the industry’s best-guarded secrets.

    Whatever the deal, such a move is just the kind of concession from Apple that Indian officials need to take back to their constituents so they can give ground elsewhere, including on tax breaks and product-labeling requirements.

    After years of doing business in China, Tim Cook has learned a lot about giving and saving face. Now it looks like he’s deploying those lessons in India. Bloomberg
     
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  3. AbRaj

    AbRaj Captain FULL MEMBER

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    Chinese State Media Warns Beijing Of India's Takeover As World's Manufacturing Hub
    Edited by Veer Arjun Singh | Updated: Jan 04, 2017 20:58 IST
    [​IMG]


    China can't afford to lose manufacturing jobs without a breakthrough in upgrading its industry.
    Beijing: Apple expanding its business in India could have other tech giants follow suit and threaten China's position as the manufacturing powerhouse, Chinese state media said today, adding that Beijing will have to upgrade its manufacturing to further attract offshore production.

    "Apple's possible supply chain transfer to the South Asian country adds further pressure on China as its domestic manufacturers show a growing interest in offshore production to low-cost countries," the state-run Global Times said.


    Even as US President-elect Donald Trump pledges to bring manufacturing jobs back to the US, China's competitors seem to be further expanding their businesses offshore. An Apple manufacturing partner is working to build an assembly facility in India, the article said.


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    "Whether India is ready to embrace the supply chain transfer and replicate China's success as a manufacturing powerhouse is another story. But the evolving landscape highlights the need for China to design a strategy to retain manufacturing jobs and upgrade its manufacturing industry to maintain competitiveness," it said.

    Apple's three major assemblers - Foxconn Technology Group, Pegatron Corp. and Wistron Corp - are all Taiwanese and any one could be willing to set up India operations.

    Despite Apple's bumpy journey to expand operations in India when its application to open stores was rejected because at least 30 percent of mobile parts production was not localised, an opportunity seems to have opened up as senior Indian officials have softened their stance, it said.

    Apple's three major assemblers - Foxconn Technology Group, Pegatron Corp. and Wistron Corp - are all Taiwanese and any one could be willing to set up India operations.

    If Apple decides to set up assembly facilities in India, more global tech giants may follow suit and China is likely to see a further transfer of the supply chain given India's abundant supply of working-age labourers and low labour costs.

    "And it won't be difficult for Wistron to make a large investment or generate jobs. Apple's partner Foxconn has displayed the potential for job creation in India," it said, adding,

    The article said that China can't afford to lose manufacturing jobs while it has not made a major breakthrough in upgrading its industry. It also warned Beijing of Donald Trump's plans to draw manufacturing jobs back to the US.

    It however said China's skilled labour was its edge over India.

    "Industrial competition between China and India comes down to the labour force, where costs and the level of skills are two major factors that influence business decisions. Although China has an edge having nurtured skilled workers over past decades, a majority of Indian states have an absolute labour cost advantage over China," it said.

    Advising China to scale up its manufacturing, the article said it should upgrade through restructuring and reorganisation of technologies, talents, capital and other resources.
     
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  4. AbRaj

    AbRaj Captain FULL MEMBER

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    Apple iPhone ranks as India’s most reputed smartphone, Samsung number two: Study
    [​IMG]India’s Most Reputed Mobile Phone Brands 2017 Report featured 72 mobile phone brands from 12 countries, including 29 Indian brands.

    Apple iPhone has been ranked as India’s most reputed mobile phone brand, in a study by BlueBytes. It was conducted in association with TRA Research and iPhone received the highest positive media appearances. According to the study, Samsung is the second most reputed brand in India. However, Samsung scored 67 per cent less than Apple thanks to the Note 7 fiasco. At the third position is the Indian consumer electronics company – Micromax – with a Brand Rep score 94 per cent lower than Samsung. The fourth and fifth positions were bagged by Xiaomi and Nokia respectively.

    The study featured 72 mobile phone brands from 12 countries, including 29 Indian brands. India’s Most Reputed Mobile Phone Brands 2017 Report also featured 15 brands from China and 8 from the US. Chinese multinationals Lenovo, Huawei, and Motorola ranked sixth, seventh, and eighth respectively. LG and Intex Technologies featured on ninth and tenth positions respectively.
    “Reputation can be seen as a currency that the brand can earn through positive action, communication, or sometimes erode due to lack of the same. Reputation has to be consistently maintained, monitored, and enhanced. In a cluttered space like the mobile phone industry, with diverse brands attempting to capture consumer attention, customers buy and recommend on the basis of reputation, making it the most important influencer of buying decisions,” said Pooja Kaura, Chief Spokesperson for India’s Most Reputed Brands.

    The study evaluated brand reputation by analysing media perceptions and consumer perceptions in major English and Hindi print media (newspapers and magazines) across 9 cities between November 1, 2015 – October 31, 2016.

    First Published on: January 4, 2017 4:01 pm
    © The Indian Express Online Media Pvt Ltd

     
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