Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Google Inc (GOOG): Apple Inc. (AAPL)’s Ambitious Indian Expansion

Apple Inc. (NASDAQ:AAPL) investors are now quite accustomed to focusing on the importance of the Chinese market, which is currently the second-largest geographical segment for the Mac maker behind its domestic U.S. turf. However, in recent months that attention has been shifting south towards a new potential growth frontier waiting to be tapped: India.

Last October, Apple Inc. (NASDAQ:AAPL) significantly expanded its distribution strategy to broaden its reach. In February, there were reports detailing the company’s massive overhaul of its Indian operations, growing its local workforce and offering payment plans to make devices more affordable, among other changes. Early signs are that the overhaul is working with iPhone sales on the rise and Apple becoming the No. 2 smartphone vendor by revenue.

Apple Inc. (AAPL)

What’s the latest development for Apple on the Indian front?

More stores galore
A new report from The Economic Times details how Apple is scaling up its presence in India and hopes to triple the number of exclusive stores that sell Apple gear by 2015 to more than 200. That’s up from roughly 65 exclusive Apple stores in India today. Those stores aren’t owned and operated directly by Apple Inc. (NASDAQ:AAPL), but instead by local franchisees that have committed to help the iPhone maker aggressively grow in India.

In addition to these Apple exclusive stores operated by resellers, the company is also looking to grow its footprint within larger multibrand stores.

A sourcing problem
One of the biggest hurdles for Apple in India has always been local regulation regarding foreign ownership of single-branded retail stores. The country’s Department of Industrial Policy and Promotion, or DIPP, used to limit foreign direct ownership of such stores to 51%. The DIPP changed its stance on this policy way back in January 2012, allowing foreign companies to own up to 100% of single-branded retail stores and potentially paving the way for official Apple stores.

There was a catch, though. Any single-brand retail store that’s owned by a foreign company must have 30% of the goods sold sourced from local vendors, a move by regulators to help boost local commerce. When the change was first made, a DIPP official implied that regulators would be willing to work with Apple, “If they tell us that the 30% sourcing is a problem, at that stage we will look into it.” That was over a year ago, and there haven’t been any reports since to the contrary. The Economic Times still cites the 30% sourcing rule as a continued hurdle for Apple to open its own stores.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.