Apple confirms plans to set up technology development centre in Hyderabad

NEW DELHI: Apple will build its technology development centre outside the US in Hyderabad with an investment of $25 million (Rs 170 crore), likely employing about 4,500 people. Apple's centre will occupy 250,000 square feet in Tishman Speyer's WaveRock facility in the city's IT corridor and is set to start in the latter half of this year.

Cupertino, California based Apple, confirmed the plans.

“We’ve been investing to expand our operations in India and are thrilled to have passionate customers and a vibrant developer community across the country,” a spokesperson said.

“We are looking forward to opening a new development office in Hyderabad that will be home to over 150 Apple employees supporting maps development. The office will also have space for many contractors who will support our ambitious efforts locally,” the company added.

Jayesh Ranjan, IT secretary of Telangana, told ET while confirming the details of Apple's investment that "MoU will be signed after some approvals come.”

They're (Apple) waiting for the SEZ approval (for the area) to come, which is expected to be given in a couple of days, he had told ET.

The company has been in talks with real estate firm Tishman Speyer for a long-term lease of about 250,000 sqft, ET reported last month, citing people familiar with the matter.

Apple follows Google and Microsoft, which have said they will invest in the state. Google plans to open South Asia's biggest campus and its only facility outside the US in Hyderabad in the next few years chief executive officer Sundar Pichai announced in December. Microsoft also plans to expand operations in the state.

The rising importance of India as a market for Apple marks a sea change from a couple of years ago.

The US smartphone maker's move comes on the heels of applying for a single-brand retail licence that will enable it to open its stores in India.

The government has eased foreign investment rules for single-brand retailing and relaxed local procurement conditions for high-tech companies. At present, Apple sells iPhones, iPads, Macs and other products through third-party resellers.

India is the world's fastest-growing smartphone market, having surpassed the US in 2015, making a strong case for Apple to set up stores in the country and reap the benefits of a large software development resource pool.

The South Asian nation is becoming an important market for Apple, where its iPhones have immense brand recall and massive aspirational value, especially among the youth. Apple CEO Tim Cook recognised the growth potential in the country after the company's India revenue growth surpassed that of developed markets.

Revenue in India surged 38% in the October-December period, exceeding the 11% growth in overall emerging markets and 14% in Greater China, Apple's second-largest market after the US.

Apple's iPhone sales volumes grew 76% in India compared with 45% in Korea, the Middle East and Africa, 20% in several western European countries and 18% in mainland China in the quarter.

The company posted its best quarterly sales in India with volumes crossing 800,000 units in the three months ended December, when sales in developed markets faltered.

"During hard times like now, it provides an opportunity to invest in newer markets such as India where there are long-term prospects," Cook said.