Apple Brazil: Exploring the introduction, sale and production of iPhone and iPods in Brazil

Camila Fusco from the brazilian business publication “Exame” reports that one of the major hurdles for introducing Apple products and also iPods and iPhone in Brazil is the high rate of smuggling and the very high import taxes. Even today Apple Brazil only consists of 10 officially hired workers. It seems though that the potencial for the local cellphone market growth has come to the attention of Apple who supposedly had talks with the federal government in search for tax incentives and other benefits with the goal of producing the iPhone in Brazil and bypassing the import taxes.

It seems now that Apple has decided to enter the brazilian market with a two step strategy: first by trying to increase their overall marketshare with the launch of the iPhone together with a telecom provider, like they have done in other countries and second, should enough demand justify the investment, the local production of iPhones and then also iPods in Brazil. The numbers cited for justifying local production are 80000 phones per month sold or almost equivalent to 1 million phones per year. Executives also visited several companies that today produce cellphones for other manufacturers like Sony Ericsson and Nokia, located in the State of Sao Paulo.

“Vivo” is being named as the safest bet for bringing the iPhone to market in Brazil. Vivo is part of the Telefonica group. Britains O2 also is part of the Telefonica group. Another important factor Apple is considering is that Brazil is the 6th largest cellphone market in the world and this can not be neglected. But the price of the iPhone would have to be very atractive for it to sell the way Apple would deem it viable for production in country. Apple setting up production of iPhones and iPods in Brazil could mean the first step for also producing computers in the futures.