After India, Is Türkiye Apple’s Next Big Bet?

Apple signaled its intention to build its business in India 10 years ago. A decade later, Apple Chairman Tim Cook is in the Republic of Türkiye for a flurry of appearances and announcements that signify Türkiye’s importance to the company.

Apple announced plans to open five new Apple Developer Academies, one Apple Developer Center, and one Apple Manufacturing Academy in Türkiye. This is the first manufacturing academy the company will open outside the US, which is worth mentioning on its own account.

Türkiye has its own ambitions

Apple’s move reflects Türkiye’s ongoing attempt to build up its manufacturing industry. The country recently announced a $5 billion preferential financing system to provide targeted support at the manufacturing industry there. That package sees funds made available to business in the form of long-term loans and comes within a broader policy of supporting Turkish manufacturers and exporters and facilitating the implementation of industrial investment projects.

While the manufacturing academy won’t open its doors before 2028, Apple’s decision to open its academy echoes the national ambition. The World Bank has also turned its attention there.

What did Apple say about the academy? “The academy, which will invest in individuals and institutional knowledge, aims to increase the speed of innovation and adopt advanced technologies by supporting Türkiye’s production sector,” the company says. Courses will cover machine learning technology, predictive maintenance, advanced automation, and robotics, along with interactive workshops on operational and production efficiency.

What does Apple want?

Türkiye sits where Europe meets the Middle East and Asia, so is a great location to attract talent from all those locations, as well as being in a customs union with the EU. Apple’s intentions won’t be philanthropic; it’s most likely the company hopes to identify hot new talent from across the region, presumably tempting the best workers to join its ongoing effort to build manufacturing in the US. Apple knows it needs to cast an incredibly wide net to find the best possible talent to run the manufacturing facilities for the products it hopes to make in the next decade. 

Apple being Apple, it may also be part of its attempt to navigate Türkiye’s tax structure, which currently means someone purchasing an iPhone there must pay around the same price as the device again in various forms of tax. Türkiye is one of the most expensive places to purchase iPhones on Earth, and these new investments may become leverage for future tax concessions.

What’s Türkiye got that other regions don’t? 

The US International Trade Administration (ITA) points to the nation’s “young, sizeable population, dynamic entrepreneurial class, and advantageous geographic position as a bridge between Europe and Asia.” It points out that manufacturing accounts for 16.8% of the nation’s GDP and tells us 40.3% of Türkiye’s manufacturing exports consisted of medium-tech products and 5.1% consisted of high-tech products.

Türkiye also has other advantages. Despite having a skilled workforce with technical education, labor costs are 40%-60% lower than in Western Europe. It has energy capacity, modern infrastructure and reliable telecoms, and is already a base for electronics production from the likes of Vestel and Samsung. It is also Europe’s largest exporter of household appliances.

Building tomorrow’s industrial production

But where Apple’s ideas and Türkiye’s ambitions may mesh most deeply is that as it seeks to build its manufacturing business, the nation seems keen to invest in the industry 4.0 technologies that Apple is also investing in across its existing supply chain.

The advantage Türkiye has is that it needs a lot more investment in the digital technologies required to build that kind of future, which makes it a perfect example of a high-tech customer with ambitions to become a high-tech player in the manufacturing space, one which is not held back by existing legacy manufacturing investments to the same extent as some other nations. 

That also means Türkiye is keen on facilitating big investments in the country. “The Government is supporting the establishment of digital transformation centers and model factories, piloting emerging technologies and advanced manufacturing solutions within organized industrial zones and technology development zones (Technoparks) across Türkiye,” wrote the ITA. 

What’s the playbook again?

It’s not a new opportunity. Cook mentioned that Apple has done business in Türkiye for 35 years. It already runs three retail stores there, and I suspect that the scale of Apple’s business will expand following these investments there.

We’ve seen this playbook before. Apple identifies a country with potential, invests in it, and a few years later the industry notices that it has built a thriving business there. We saw this most recently in India, which at this point makes over 25% (and possibly more) of all iPhones sold globally and is among Apple’s fastest-growing markets.

Speculate to accumulate, as they say.  And no one accumulates quite like Apple.

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