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Apple and Amazon Considering Saudi Expansion

 
Jan 8, 2018
by Josh Anderson

RIYADH, SAUDI ARABIA — Reuters is reporting that Apple and Amazon Web Services are in engaged in separate licensing discussions with SAGIA, Saudi Arabia’s foreign investment authority. They report that three sources have confirmed the talks, with Apple aiming for an agreement by February and initial retail launch of 2019. The plans of AWS are reportedly still in an earlier age and are yet to be determined.

Both Apple and AWS already sell their products to Saudi Arabia’s population, but only via third parties. Neither these parties nor any of the other major global names in technology have established a direct presence in the conservative country, which is hoping to establish a “high-tech look” as part of a recent reform push by Crown Prince Mohammed bin Salman to both attract foreign tech companies and diversify holdings in the light of falling crude oil prices. These reforms include a streamlining of regulations that apply to data management & cloud computing.

The Saudi market is currently dominated by much smaller local providers such as STC and Mobily, who enjoy access to a young and wealthy population which reportedly enjoys some of the highest inernet and smartphone use anywhere on the planet. Reuters reports that 70% of Saudis are under the age of 30 years old, many of which report high engagement with social media. Apple is already the second-largest providers of mobile phones to Saudi Arabians, after Samsung.

This would perhaps be a bigger step for AWS, who currently only operates out of neighboring Bahrain on the Arab Peninsula. They’re not alone in having held off on the Kingdom.  Even Microsoft — the number one cloud provider in the world — tends to Saudi Arabic with its three Indian data center regions.

This deal would be likely to clear the way for an expansion of Amazon retail warehouses in Saudi Arabia as well. Coming on the heels of last year’s acquisition by Amazon of Souq.com, an online retailer out of the United Arab Emirates, the road has already been paved.

 

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