Apple to open 1st store in Istanbul
Company aims to exploit Turkish tech growth, yet some analysts say it will face tough competition from foreign rivals like Samsung and LG, which have already increased their presence in Turkey
Consumer technology market analysts expect Apple to start taking a big bite from the emerging market for its products when it opens its first store in Istanbul in a few months.
The Media Line
"We're going to place our first store in Turkey this year; we're super excited about that," Apple CEO Tim Cook told a San Francisco conference earlier this year about the store, to be part of a mall still under construction.
However, some analysts say Apple will face tough competition from foreign rivals like Samsung and LG, which have already increased their presence here.
The company was keeping its plan for the Istanbul store mostly under wraps, although it posted job openings online for its corporate and store teams here. An Apple spokesperson, however, declined to comment on the store plans when reached by The Media Line.
The Apple store is just another way the company hopes to branch out in Turkey's growing economy, which in turn has seen a sharp expansion of its consumer technology market.
"Recently, many people have come to know Apple because of the iPhone. Apple is competing for customers with Samsung and the demand is growing," Murat Eren, a salesman at Apple-authorized Arti Computers, told The Media Line.
Some analysts say that Apple is opening the new store because it is afraid of Samsung.
“The decision to open its own Apple store could be born out of necessity,”
Loo Wee Tek, an analyst with Euromonitor, a mobile research firm, told The Media Line. “In fact, Apple is late in officially entering the market and has seen its smartphone market shares eroding."
One thing is certain: The Turkish market is potentially huge. The country's gross domestic product (GDP) is $735 billion, making it the 18th largest economy in the world, according to the World Bank, with a population of almost 74 million. Its GDP growth was 8.5% in 2011, compared to 1.7% in the United States.
Apple's investment in Turkey is part of a broader effort to focus on key emerging markets, like Brazil, beyond other saturated markets, Teck noted.
"Apple has been strong in developed markets like the US and Western Europe, but the company desperately needs to explore markets other than China and India," Teck said.
Turkish retail sales remain strong for Apple and its competitors. "Retail sales of consumer electronics here will exceed $100 billion in 2013 and critically, sales of smart phones are forecast to overtake conventional mobile phones in volume sales in 2015," Teck added.
Eren said Apple had a representation in Istanbul for two decades, but within the last year and a half the company opened a corporate branch headquarters and also found a second distributor. "They organized the business," which he said drives sales. He said his company has seen demand for Apple products increase so much it had decided to open two computer stores.
Smartphones, tablets and other mobile web-enabled devices are widespread in Turkey. Wireless carriers like Turkcell, Vodafone and Avea offer extensive connectivity throughout the country.
Despite that, the most recent government data from April 2012 show only 47.2% of the population have access to the Internet at home, although in Istanbul nearly two-thirds of households have Internet.
Compare that with the US Internet penetration of nearly 80%, according to a report published by the research firm Forrester.
Nonetheless, mobile phones are everywhere in Turkey, with more than 65 million of them in 2011.
While Apple has lacked a large physical presence in Turkey, it has long courted Turkish investors and officials.
After a White House reception with President Barack Obama last week, Turkish Prime Minister Tayyip Erdogan visited Silicon Valley where he visited Apple headquarters, Google and Microsoft.
The visit dovetailed nicely with his seeking the companies' investment in Turkey's ambitious FAITH program for schoolchildren, a multi-billion dollar government initiative to equip Turkish students with tablet computers. The four-year project also aims to equip 620,000 classrooms with "smartboards."
"We wanted to see the latest developments in the information sector before we launched the FAITH bid by visiting Silicon Valley," Erdogan said, according to the semi-official Anatolia News Agency. "Our first aim is to produce 10.6 million tablets within the FAITH project.” Decisions on bids are expected next week, according to Erdogan.
Earlier this year, Turkish President Abdullah Gul also met with Apple Vice President John Couch in Istanbul to talk technology partnerships. The meeting followed a trip by Gul to Apple headquarters last year.
An increased Apple presence in Turkey was already seen last December when the company opened its online iTunes store there for music and movies. Once it opens its Istanbul store in the fall, profits should be ripe for the picking.
Article written by Steve Dorsey
Reprinted with permission from The Media Line