Amid Stalling Smartphone Market Growth, Apple May Get the Go-Ahead to Open Indian Retail Stores

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After several years of breaking records in smartphone sales, Apple hit a bit of a rough patch in the first quarter of 2016. This past April, it was reported that Apple sold 16 percent fewer iPhones in the first quarter of 2016 than it did in the first quarter of 2015.

There’s no question that the smartphone market in the US and many other developed countries is a bit saturated, and although Apple gained a bit of momentum back with the release of the 4-inch iPhone SE, and will likely recover a bit more with the release of the iPhone 7 and iOS 10 this fall, it will likely be tough for the company to relive the record-shattering days of years past. Growth in two of the world’s largest smartphone markets – the US and China – have simply stalled.

This past January, Apple began looking at opening retail stores in India, itself the second largest smartphone market in the world. According to Counterpoint Research, India overtook the US early this year to become the world’s second-largest smartphone market.

However, Apple has failed to see much success in the emerging market. According to CNBC, Apple only holds a 1.9% market share in India. Recently, however, the company has set its sights on India, filing an application with the Indian government this past January to open its own retail stores in the country. However, a Foreign Direct Investment rule in the country requires that a company must manufacture at least 30% of their products within India before opening a retail stores there has hampered Apple’s efforts, until now.

Just this morning, the Indian government made a decision to relax the FDI rule, giving companies three years to establish a manufacturing presence in the country while selling their goods in branded retail stores.

According to TNW, the company may even get an additional five years – eight total – if it proves that it deals in ‘cutting-edge’ or ‘state-of-the-art’ technology that is, at the moment, unavailable in India. Three years, however, is plenty of time for Apple’s main supplier, Foxconn, to open its planned $10 billion manufacturing plant in Maharashtra.

If all goes well for Apple, the company should get the go-ahead to begin opening retail stores in the country soon. Previously, iPhones were only available to Indian residents through third-party resellers, and the brand lacked a strong presence in their smartphone market.

The addition of Apple retail stores in the country may be enough to dramatically boost the company’s market share in India’s smartphone market – meaning a huge revenue and momentum boost for Apple.

What do you think about the stalling smartphone market? Has technology growth finally slowed?
Let us know in the comments below!

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