Brazil Grants Foxconn Fiscal Incentives To Produce iPads
BRASILIA (Dow Jones)--The Brazilian government has granted Taiwanese manufacturer Foxconn Technology Co. Ltd. (2354.TW) a series of fiscal incentives to produce Apple Inc.'s (AAPL) iPads in the country, the country's official gazette reported Wednesday.
The tax status granted to Foxconn will mean imports of certain products for manufacturing "portable microcomputers, with no keyboard and with a touch screen, weighing less than 750 grams" will either pay no import tax or will pay a reduced tax, the gazette reported.
Other products covered under the relaxed tax rules include power cables, instruction manuals and other such products, the gazette informed.
-By Jeffrey T. Lewis, Dow Jones Newswires; +55 61 9278 5267; jeffrey.lewis@dowjones.com
During Apple's fourth quarter conference call in October, CEO Tim Cook said Brazil showed "great promise" after sales rose 118 percent year over year to surpass $900 million.
Apple CEO Tim Cook identified Brazil as one of Apple's future growth areas. "sticking point exists for increasing Apple's Brazilian sales, however. Currently, Brazilians pay some of the highest prices in the world for Apple gear. At launch, an unsubsidized 16 GB iPhone 4S cost the equivalent of more than US$1,400 in Brazil, compared to $849 for a 64 GB model in the US. Those breathtakingly high prices may be due to a number of factors, including Brazil's high import duties, but if Apple is going to attempt to get the kind of traction in Brazil it's seen in China, those prices are going to have to drop significantly."
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