Apple and Amazon said to be in talks to invest in Saudi

Riyadh: Apple and Amazon are in discussions with Saudi authorities on investing in Saudi Arabia, as part of Crown Prince Mohammed bin Salman’s push to give the country a high-tech profile, as reported by agencies including Reuters, which quoted two sources as saying. Reports quotedanother source as confirming Apple's talks were held with SAGIA, Saudi Arabia’s foreign investment authority.

Both companies have already been selling products in Saudi Arabia via third parties but like other global tech majors, have not yet had a direct presence.

Amazon’s discussions are being led by cloud computing division Amazon Web Services (AWS), which would introduce stiff competition in a market currently dominated by smaller local providers like STC and Mobily.

Riyadh has been easing regulatory hurdles for the past two years, including restrictionson foreign ownership, in a move viewed as part of diversifying the kingdom's economy into non-oil sectors in the light of falling crude prices.

The step is also likely to boost Prince Mohammed’s reform plans and on the other hand raise the two giants' profile in a young and relatively affluent market which has some of the highest internet and smartphone penetration in the world. The youth population of Saudi, forming about 70 per cent, are known to be heavy users of social media.

Media sources report that a licensing agreement with the Saudi authority for Apple stores is likely to be reached by February, with the first retail outlets targeted for 2019. No specific dates are indicated for Amazon's investment plans. Both Apple and Amazon have both been on a Saudi priority list of foreign firms in the Saudi push for economic reforms and tech-centric diversification.

Apple has the second largest market share in Saudi's mobile phone segment, behind Samsung.

“Many tech multinationals now in Saudi Arabia are either vendors to the Saudi government or, in the case of Uber, have benefited from a sizable Saudi investment,” Reuters quoted Sam Blatteis, who heads Dubai-based tech advisory MENA Catalysts Inc, as saying.

For its part, Apple stores would be its means to enhance the profile of its products and offer repairs and community events in line with its strategy to brand its stores as “town squares”.