Apple Computer Inc. (AAPL) has scrapped its plan to run a big Apple Technical Support Facility / Call Center out of Bangalore, India. According to a report in the Times of India, Apple has laid-off 30 personnel that were hired as a part of this Call Center. This step is an about-turn from an announcement made by Apple in March 2006, that it would have hired close to 3,000 people by the end of 2007 to run its Bangalore Call Center.
Apple's Call Center pull-out seems like a pure business decision -- based on sound financial thinking; according to report in BusinessWeek. A second reason that may have swung Apple's decision makers was a recently announced strategic deal for distribution and after sales support of iPods with India's big tech-house HCL Infosystems.
Apple had only a staff about 30 at its Bangalore operation, but "you need economies of scale, say 500," to generate huge savings for a company, says Sunil Mehta, vice-president of Nasscom. Unlike rivals such as IBM-Lenovo, Dell (DELL), and Hewlett Packard (HPQ) that have a huge base of personal computer customers, Apple's Mac market share is far lower, undercutting the justification for a huge customer service center on the ground in India.
The Bangalore operation also seemed redundant given that on May 29 Apple announced a strategic tie-up with New Delhi-based HCL Infosystems to provide distribution and after-service care for Apple's phenomenally successful iPod line. HCL has a tremendous distribution and service footprint in the country and has worked successfully with Nokia (NOK), India's dominant mobile phone brand. "We will put Apple products through the same distribution network as we do with Nokia, and offer after sales service for all things related to the iPod including iTunes," says Saurav Adhikari, vice-president for strategy with HCL.
Given all that, the economic rationale to build out an Apple-run Bangalore customer service center looked flimsy.
Continued... Why Apple's closing of Bangalore Call Center Makes Sense
» Why Apple's closing of Bangalore Call Center Makes Sense from TheBizofCoding
This post continues from my previous post Apple Computer Inc. Scraps Call Center Plan in Bangalore where I had explained why Apple's (AAPL) decision makes business sense: To make a Call Center financially viable, Apple Compuer Inc.'s Call cen... [Read More]
Tracked on: June 6, 2006 4:48 AM | Permalink to Trackback