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Govt gifts Apple ‘local sourcing norm breather’ for first 3 years

Apple has only been given a “breather” for the first three years by providing relaxation to it in local sourcing norms and the compulsory 30 per cent local sourcing clause has not been completely dispensed with, the government informed the Rajya Sabha on Wednesday.  

“We have just given a relaxation that in the first three years, if local sourcing for their retail outlet is becoming difficult, the first three years will be exempted,” Commerce & Industry Minister Nirmala Sitharaman said.

“But the average that we calculate for the local sourcing requirement will be applicable after that for five years. So, it is not that as if we have completely dispensed with that clause. We have only said that give a breather for the first three years. We may do it afterwards,” she added. 

Replying to member’s question, she said, “let me put it on record here that I have approached Apple to explain what we have done as a policy change or tweaking. We have not yet had any response from the Apple. So, there is nothing that we have approved.”

Providing details, she said the average that we calculate for the local sourcing requirement will be applicable after that for five years. “As regards the local sourcing requirement, the Apple has not even come back to us to get approved anything. What we have just said is, we just provided a relaxation,” she said.

The Government recently issued new norms allowing single-brand retail trading and exemption from local sourcing for ‘state-of-the-art’ and “cutting edge” technology with a waiver for three years, and the option to extend it for five years. Apple may have to submit a fresh application for the same.
Meanwhile, Apple CEO Tim Cook, who visited India and met Prime Minister Narendra Modi in Mayand expressed the company’s desire to set up a plant here, has said that the tech giant is “looking forward” to setting up retail stores in India to tap into the booming smartphone market here. 

“India is now one of our fastest growing markets. In the first three quarters of this fiscal year, our iPhone sales in India were up 51 per cent year-on-year,” Apple CEO Tim Cook said on an investor call. He added the company has announced setting up of a design and development accelerator to support Indian developers creating innovative applications for iOS and opened a new office in Hyderabad to accelerate maps development. “We’re looking forward to opening retail stores in India down the road, and we see huge potential for that vibrant country,” he said without disclosing further details. 

Cook had discussed issues including manufacturing and setting up retail stores in the country with Prime Minister Narendra Modi. “On a personal note, during the past quarter I visited China and India, and I am very encouraged about our growth prospects in those countries,” he said. 

Meanwhile, with iPhone sales and profits sliding, Apple has sought to highlight its growth in services as it seeks to reduce dependence on its main cash driver. In its quarterly update, Apple said profits slumped 27 per cent from a year ago to $7.8 billion on a sharp drop in iPhone sales. 

Apple sold 40.4 million iPhones in the quarter ending June 25, down 15 per cent from a year earlier, highlighting concerns over growth for the company’s iconic smartphone. It was the second straight quarter of slumping iPhone sales for the company, which until then had seen uninterrupted growth. 

Overall revenue was down 15 per cent from a year ago at $42.4 billion for Apple, which is the world’s most valuable company. Cook said the results showed “stronger customer demand and business performance than we anticipated at the start of the quarter.” Investors appeared to be reassured by the results, which were generally better than expected.  

The results underscored the challenges for Apple, which has built a huge business around the iPhone but is unlikely to see continued growth, due to a saturated smartphone market and increased competition. 

The company said its iPad unit sales meanwhile fell nine percent from a year ago, but revenues rose due to the launch of higher-priced tablets. Mac sales were down 11 per cent. Apple said its services revenue rose 19 per cent year-over-year. 

China’s Xiaomi rolls out first laptop to take on US Apple
Chinese smartphone maker Xiaomi on Wednesday rolled out its first laptop, testing the waters in a market that has been flooded with premium tablets. The laptop Mi Notebook Air, runs on Microsoft’s Windows 10 operating system, sells for 4,999 yuan (around $749 ) for a 13.3-inch display. A slimmed-down version for office use is also available for 3,499 yuan. The laptop is priced at a discount compared to many models with similar specifications from leading brands such as Lenovo, Dell, HP and Apple. It is the Beijing-based firm’s latest attempt to press ahead with its strategy of releasing top-spec devices at low prices. 

“Xiaomi will continue to roll out budget devices with key components in the same league as those on premium devices,” Xiaomi co-founder Lei Jun said during product launch in Beijing. The company also launched a new phone under its budget smartphone line RedMi. The RedMi Pro is powered by MediaTeK’s flagship processor Helio X25 and sells for between 1,499 and 1,999 yuan depending on specifications. Xiaomi’s chief domestic rival, Huawei, rolled out a tablet computer with Windows 10 and a detachable keyboard earlier this year. 

Global PC shipments have declined for seven consecutive quarters as of the second quarter this year, according to tech consultancy Gartner. Lenovo, the world’s top PC maker, reported a drop in shipments of 2.2 per cent in the second quarter, while Apple, ranked fifth, posted a 4.9-per cent drop in the same period. On the Chinese mainland, shipments slid 6.4 per cent as a slowing economy bit into demand for PCs by both businesses and consumers, Gartner said. Analysts have attributed part of the decline in the PC market to a shift to tablet computers that can handle productivity needs. 

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