Why is Apple
differentiating between India, China?
The Asian Age,
September 20, 2017
By Pradeep S. Mehta
A few months back, Apple was showing
its utmost commitment to China’s “black letter law”
The latest flavour in the mobile industry
is iPhone X. Its manufacturer, Apple, is leaving no stones
unturned in ensuring the global success of its flashy new
smartphone. It is safe to assume that Apple will devote equal
attention to the world’s largest telecom markets: China and
India. However, the company seems to be differentiating between
two peas in a pod, when it comes to regulatory and policy
compliance in these two countries. This is evident from the tech
giant’s “yes minister” attitude in China as opposed to their
“elitist” complex in India.
A few months back, Apple was showing its utmost commitment to
China’s “black letter law”. Thus, going to the extent of
planning its first data centre in Guizhou province in southwest
China, to adhere to the newly-framed data privacy and protection
laws of the country. However, in India, Apple has been asking
for a host of concessions from the government to manufacture in
the country. Surprisingly, at the same time, it got into a
skirmish with Telecom Regulatory Authority of India (Trai), over
the Do Not Disturb (DND) app. Despite the app being intended for
consumer welfare, it is not being made available on Apple’s iOS
app store. Such partisan attitude to the domestic legal and
regulatory regimes of the two countries, which are offering
similar market opportunities, is surprising.
Few experts consider China’s business environment as the “Wild
West” for foreign companies. The latest cyber security laws of
the country requires foreign digital technology companies to
store its citizen’s personal and passive data, within its
shores. The move was based considering the rising economic value
of user data, and the worldwide trend on digital data security
China is Apple’s second largest market for selling its iconic
iPhone, contributing over 20 per cent to the company’s global
turnover. Therefore, the company was careful so as not to offend
the Communist government. Subsequently, it pledged an investment
of $1 billion to operate its iCloud services “for China from
China”, in a partnership with a local data management company.
The move was made so as not to face the same fate as other tech
companies like Google and Facebook who are barred from operating
in China due to non-compliance with the country’s cyber laws.
On the other hand, Apple had the nerve to upset the Trai chief
by blocking the DND app on its app store, citing violation of
coming from a company which itself collects user data, and
readily allows other online data-driven platforms like Facebook,
Zomato, etc, to do the same through their apps available on its
The blatant disregard for Trai’s DND app signifies the
indifferent attitude of the company towards the Government of
India, including the telecom regulator. Such indifference may be
stemming from the fact that though Apple is one of the preferred
premium brands in the country, its overall market share is
currently only three per cent. The “sticker shock” of its
product prices is one of the major reasons for its low sales in
India. Also, the company’s “Make in India” move did not work out
as well as hoped.
In its bargaining with the department of industrial policy and
promotion, the company had requested for waiving the minimum
domestic sourcing requirement, concessions on import duties,
apart from various other concessions. Furthermore, its plan of
making and selling refurbished products in the country is also
against the Government of India’s policy.
Such demands may be considered as “asking for too much too
soon”, specially considering what Apple is offering in return.
Media reports suggest that Apple does not intend to manufacture
smartphones in India for exporting it to its global markets.
Apple’s local vendor Wistron’s India’s annual production
capacity is at a mere 75,000 units, whereas annual domestic
sales of mobiles in India was over 100 million in 2016. Though
the company has expressed its intention to expand its production
capacity, there is no credible reason at this stage to provide
special treatment to Apple, as it would be unfair on other
mobile makers who are already manufacturing in India.
India is one of the world’s largest telecom hardware markets and
it’s growing. The potential it holds for Apple, if priced
better, should be more than an incentive for the company to
start large-scale operations here. The cascading global
quarterly sales figures of iPhone in 2016, bearing an overall
eight per cent decrease from 2015, is forcing Apple to look at
India’s large untapped market. Their upcoming research and
development (R&D) centre in Bengaluru is not enough to woo the
government, which is striving to make India an end to end
It is time for Apple to fall in line with other mobile
manufacturers in India by adopting the policy of “when in Rome,
do as Romans do”. Allowing the DND app on their app store could
be a good start in the larger interest of consumers. If the
company can follow the diktats of the Chinese based on the
country’s domestic needs and priorities, there is no reason for
them to not do the same in India keeping in mind our ambitions.
This specially when both countries hold comparable potential in
consumption, production and global value chain contribution for
Sidharth Narayan of CUTS contributed to this article
Pradeep S. Mehta is secretary general of CUTS International.
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