Indian Prime Minister and noted iPhone user Narendra Modi has requested to meet Tim Cook during his upcoming visit to the U.S., presumably to discuss the possibility of Apple investing in R&D and manufacturing in his country.
But, if the Apple CEO has his way, Cook will also want to discuss the possibility of official Apple Stores in the country. India does not permit manufacturer-owned stores unless a certain proportion of components are sourced within the country, forcing Apple to rely on third-party resellers. Apple is working to expand its network of mobile-focused resellers in India to 500 stores, also adding a fifth distributor in the country back in June.
Prime Minister Modi will in turn be pushing for Apple to make R&D and manufacturing investment in the country. Foxconn is currently planning a $5B investment in factories in India, though it is not yet known whether these will be used to assemble iPhones. At present, Apple outsources some backend software development to Indian firms Infosys and Tata Consultancy Services. A local Apple-run R&D center might send more critical projects in India’s direction.
While starting from a much smaller sales base than China, Cook said in the July earnings call that iPhone sales in India had increased by 93% in Q3, against 87% for China. Last year, the first shipment of iPhone 6 handsets to India sold out in a lightning-fast 72 hours. Between October 2013 and September 2014, the country additionally sold 1 million iPhones, marking a new sales record.
Apple has even proven willing to take a profit margin hit to get the devices into more people’s hands — halving the credit period given to retailers and lowering its sales margin by 0.5 to 1%. Apple is expected to make the iPhone 6s/Plus available in India much earlier than was the case for previous models.
Modi is also scheduled to meet with Facebook CEO Mark Zuckerberg, Google CEO Sundar Pichai, and Adobe CEO Shantanu Narayen.
The prime minister will arrive in New York on September 24, before heading to the West Coast on September 26.
