India could force Apple to alter supply chains for greater market share

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A new Indian regulation could have an interesting impact on Apple’s supply chain. For the hi-tech behemoth to open its own shops in India, it must source at least 30% of its components locally. As we all know, most of its products are made in China – or other Foxconn locations – and it would not be able to meet the Indian rule, just ratified by the finance minister. Apple has a relatively small market share in India, where less expensive devices are more popular, but the Californian company is eyeing growth there.

According to Livemint, there could be ways round the rule: Apple could argue that its software could account for the 30%, and open development centres in India; or it could sign a franchise agreement with a local retailer, in a business model that would look a lot like McDonald’s. Apple could providing training and support while dictating layout, procurement and sales procedures. But, as Bloomberg notes, its products are still potentially too expensive, and competition is strong.

Meanwhile, Foxconn is to build a Huawei smartphone factory in Guizhou. Interestingly, the capital’s airport, Guiyang, currently has no services to Europe or the US.