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Apple (AAPL) Set to Meet Government Officials in India

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Reportedly, Apple Inc.’s (AAPL - Free Report) management is scheduled for a meeting with Indian government officials on Jan 22 over setting up its manufacturing units in the country in exchange for tax breaks.

Rumor has it that the technology giant is seeking a 15-year tax holiday on the import of equipment and components in the country. The Indian government might decide to negotiate in the affirmative so as to attract the company to set up its manufacturing units in the country.

Apple Inc. Price and Consensus

How is this Going to Help India?

With Narendra Modi at the helm, the tagline of “Make in India” is fast catching up with the global manufacturing majors. If the Apple deal materializes, it could open the doors to attract other global players to set up their manufacturing units in the country.

However, China still remains a major contender in the manufacturing space.

What’s in Store for Apple?

India with its 1.3 billion population is currently the world’s fastest growing cellular market. If Apple finally decides to set up its manufacturing units in the country and if its management manages to strike a positive chord with the Indian government over the 15 year tax holiday, it will translate to substantial lowering of the price of iPhones and other products.  

As per an IDC report, the Indian smartphone scene is currently dominated by Samsung, which governs 23% of the market share. If this deal goes through, it will help Apple to gain traction in the country. 

Stock Performance Overview

Shares of Apple have underperformed the broader Zacks Computer - Mini Computers industry over the last 12 months. While the industry gained 25.2%, the stock gained 23.7%

The underperformance of the stock could be due to macroeconomic headwinds in some key regions amid increasing competition. However, the company’s growing focus on India and China, a loyal customer base and a strong ecosystem are likely to positively impact the company’s earnings.

Zacks Rank & Key Picks

At present, Apple carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology space include Seagate Technology plc (STX - Free Report) sporting a Zacks Rank #1(Strong Buy),and Microsoft Corporation (MSFT - Free Report) and Applied Materials Inc. (AMAT - Free Report) , each sporting a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Notably, the consensus estimate for Seagate’s current year has improved to $3.80 from $3.78 over the last 30 days.

Similarly, the consensus estimate for Microsoft’s current year has improved to $2.95 from $2.94 over the last 30 days.

Last but not the least, the consensus estimate for Applied Materials’ current year has improved to $2.43 from $2.40 over the last 30 days.

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