Apple opens its first store in Brazil, a key market

Apple threw open the doors Saturday to its first store in Brazil, one of the world’s fastest-growing smartphone markets and a region that is crucially important to the company.

Chief Executive Tim Cook announced the opening in a tweet: “‘Obrigado’ to everyone who visited our new store in Rio de Janeiro today and to our terrific customers across Brazil!”

The opening is the company’s first in Latin America, and comes in a country that is set to host the World Cup this summer and the Olympics in 2016.

The grand opening drew more than 1,700 people, according to the Brazilian newspaper the Globe. You can also see the videos the newspaper posted here. The mall is in a suburban area of Rio.

The throngs on hand for the opening were the latest evidence of just how popular the Apple brand is in Brazil.

But the company still faces some serious challenges to expanding its presence in the country.

A Los Angeles Times article last July about Apple in Brazil examined some of the those hurdles. Among them: Brazil levies steep import tariffs on products made elsewhere, making Apple’s already pricey products even more costly.

Apple has taken some steps to be more cost competitive in Brazil, such as cutting the prices of some phones. It also worked with Foxconn to begin manufacturing some iPhones and iPads in Brazil starting last year.

Still, as Bloomberg reported, the cost of the iPhone 5s is still hefty:

“Apple’s 16-gigabyte, contract-free iPhone 5s will sell for 2,799 reais ($1,174) in Brazil. That compares with $649 in the U.S. and 5,288 renminbi ($872) in China. The price of the iPhone 5s in Brazil, offered by authorized resellers, has jumped 17% since September on Apple’s website.”

In recent years, Apple has made some other moves to be more competitive in Brazil, such as opening a Brazilian iTunes store and hiring a Brazilian to oversee its Latin American operations.

Still, Apple remains far behind.

In 2012, according to research firm Gartner, Samsung sold 42.4% of the smartphones in Brazil, followed by LG with 13.3% and Apple with 9.1%, just barely ahead of Nokia and Motorola.

Cook has acknowledged that his company needs to find ways to make its products more appealing in emerging markets.

“There are a lot of markets where we don’t sell anything,” Cook said at the company’s annual shareholder meeting last year. “I look at it as the glass half full. We have a lot of work to do there.”

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