Updated: India puts a licensing brake on Apple’s Mac & iPad sales

Apple has hit a bit of a snag in India where the Modi government just threw a brand new licensing challengeat sales of Macs and iPads there in an attempt to convince the company to make them in India.

Edit: While all the below is true India’s lawmakers within 24-hours responded to the anguished shrieks of PC makers and put a 3-month hold on putting the regulations into effect while it figured out a way to expedite the licensing system it plans to put in place. The mandate won’t now start until November 1, giving manufacturers a little breathing space. Now read the story and get the link to the follow up at the end.

A license too far?

Seemingly out of the blue, India has hit computer manufacturers with a new licensing requirement for tablets, laptops, and desktop computers.

What makes this more painful is that the new restriction comes just a few weeks before India’s massive shopping season. The restriction was seemingly introduced because India wants to get manufacturers like Apple, Dell, and Samsung to make their computers in India.

The impact of the licensing process is to slow the speed at which Apple gets new Macs and iPads to the local market. (Counterpoint estimates India’s laptop and personal computer market is worth around $8 billion a year, with two thirds of computers imported and Apple a top three PC maker).

India has long held a 20% tariff on smartphones, which is in part why Apple first began to build a manufacturing base there.

Apple has made huge investments so far

I imagine Apple’s a little disappointed at the new licensing restriction.

Not only has the company invested deeply in India, but it has also bought its manufacturers there. India is now on track to manufacture 15% or more of all the iPhones made globally this year, the company has set up research hubs, invested in social good projects and its partners are also investing billions in making Apple’s smartphones there.

Given the scale of these investments the company may feel it a little unreasonable for India to now apply pressure to migrate the PC manufacturing over as well – production facilities cost billions, and even the larger partners need time to build up to them.

Partners are also investing

Apple partners are investing rapidly in India.

Foxconn now plans multiple projects across the nation, including a half billion dollar investment in two component factories in India’s Karnataka state and a billion dollar facility elsewhere. One of these factories will make components for Apple products, reports claim.

Foxconn has larger factories in Tamil Nadu where its plant in Sriperumbudur makes high-end iPhone 14, and iPhone 13 devices. It is also expanding its massive facility just outside Chennai. It’s not all Foxconn, either. And just days ago, Apple partner Pegatron confirmed plans to expand its existing factory in Chennai.

I think it would be hard to expand manufacturing much faster than Apple and its supply chain are already doing. Though perhaps Apple has a plan to mitigate the impact India’s decision to put a license brake on its sales.

India clearly agrees and placed a delay on the system it intends to put into effect.

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