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

Of course, Apple sources most of its components from China, like most consumer electronics companies. Manufacturing and assembly primarily takes place in the Middle Kingdom, further making it unrealistic for Apple to comply with the 30% standard.

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Apple still lags smartphone rivals by a long shot in India, thanks in large part to the ubiquity of Google Inc (NASDAQ:GOOG) Android and Samsung. Samsung’s willingness to go low with pricing has given it inroads, while Google Inc (NASDAQ:GOOG) just wants more people connected to the Internet. Google Chairman Eric Schmidt was recently in India discussing how underpenetrated the market is based on almost any metric of connectivity. One of the key aspects of Google’s strategy is actively reducing the cost of devices, which is partially where Samsung comes in — through intense OEM competition.

The lack of carrier subsidies in India also puts the iPhone out of reach, and Apple’s response is to make it more affordable through payment plans instead of reducing the overall cost. Apple Inc. (NASDAQ:AAPL) also recently expanded these payment plan options to the iPad. Since smartphones are sold unsubsidized, Apple now sells them unlocked directly to consumers instead of through carriers, and then consumers can choose whichever carrier they want.

While it’s not quite as effective as direct online sales and official Apple stores, the Mac maker’s recent changes show it’s finally taking the Indian smartphone market seriously.

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Fool contributor Evan Niu, CFA, owns shares of Apple. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple and Google.

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