Apple looking to open premium franchise-owned stores in India

While Apple awaits permission to open full corporate-run retail stores in India, an expanded franchise retail footprint initiative may be underway.

According to the Economic Times Apple is considering five or six independently run "outlets," with floor space in each store up to 5,000 square feet. Executives familiar with the matter cited by the publication calls them "extremely prominent locations."

An Apple-authorized reseller claims that the new locations will be in Belgalaru, Chennai, Mumbai, and New Delhi at first. Later openings will be in Hyderabad, and Pune.

"With company-owned Apple Stores yet to take shape in the country, Apple wants some of the franchisee run outlets to up the experience game through this new format," the reseller told the Economic Times. "This is part of Apple's new India strategy to focus on selling on experience rather than discount."

Other moves that are expected to take place at the same time includes contracting distributors from five to two, pulling back on smaller store expansion, and entering into new partner agreements with online sellers to ensure consistent pricing across the product line.

At present, Apple has about 150 resellers in India, and it is unclear how Apple's reorganization in the country will impact this number. Apple has refused comment on the matter.

While the Economic Times has been accurate in predicting Apple's manufacturing moves in the country, it has missed its predictions on Apple retail in the past. It has predicted expansions of Apple retail in the past that have never panned out, even five years later.

Apple and India

India is an important country for Apple's growth, with the iPhone SE produced in the region for sale to the local market. In June, it was reported Apple had started commercial production of the iPhone 6s with local partner Wistron.

Apple is struggling to improve iPhone sales in the country, and recently lost three executives working in the country.

Apple fighting anti-spam legislation

Beyond its well-publicized struggles regarding component sourcing and taxation, Apple has also run afoul of anti-spam regulations in the country.

The new "Telecom Commercial Communication Customer Preference" regulation intends to cut down the number of nuisance or fraudulent calls in India, as well as unwanted marketing text messages and other spam. Part of the regulations overhaul is a requirement for carriers to allow customers to download a "Do Not Disturb" app to their devices to help combat spam, including reporting violations and setting subscription preferences for messages.

"Every access provider shall ensure, within six months' time, that all smart phone devices registered on its network support the permissions required for the functioning of such apps," the regulation states. "Provided that where such devices do not permit functioning of such apps, Access Providers shall, on the order or direction of the Authority, de-recognize such devices from their telecom networks."

The regulation clearly mandates that Apple must provide access to the TRAI DND 2.0 app, or the regulator will order carriers in the country to remove iPhones from its network. As TRAI can directly regulate carriers but not device vendors, this is one of relatively few ways the regulator can try to penalize smartphone makers like Apple.

As it stands, the TRAI Do Not Disturb app violates several rules in the App Store. In March, Apple advised the app "violates the privacy policy" of the App Store, but insisted it was working with government engineers and discussing ways the app could be designed to "keep user's personal data safe."

Under the App Store rules, third-party apps are not allowed to see call logs or text messages, but are able to access saved contacts. Apple has previously advised it would not change policy in this case.

While Apple is refusing to allow the app to be used on iPhones in the country, the same cannot be said for other smartphone producers. The Do Not Disturb app has been available to Android owners since 2016.