December 28, 2017

Tech giants Amazon and Apple could invest in Saudi Arabia

Tech giants Apple and Amazon could set up operations in Saudi Arabia for the first time, two sources told Reuters.

While both companies already sell products in the Arab kingdom via third parties, they have yet to establish a direct presence.

Earlier this year, Amazon acquired Dubai-based online retailer Souq.com, allowing the e-commerce giant to sell its goods in the kingdom.

Sam Blatteis, who heads Dubai-based tech advisory MENA Catalysts said:

Amazon entering the Saudi market would be a step-change.

Amazon’s cloud computing division Amazon Web Services (AWS) is leading the company’s discussions with Saudi Arabia.

AWS was the first of the Big Three cloud companies to establish a presence in the Middle East, after it opened a data centre in Bahrain earlier this year,

Talks between AWS and Saudi Arabia are reportedly in the early stages and no investment plans have been confirmed.

A separate source told Reuters that a licensing agreement for Apple stores with SAGIA, Saudia Arabia’s foreign investment authority, could be reached by February. The first store is expected to open in 2019.

Saudi Arabia’s tech market

Apple ranks second in Saudi Arabia’s mobile phone market behind Samsung, according to market researcher Euromonitor.

However, Apple and other tech companies could now find it easier to expand their operations in Saudi Arabia thanks to the country’s crown prince Mohammed bin Salman, an avowed technophile.

He has already announced plans to to build a high-tech $500bn mega-city on Saudi Arabia’s north-west coast and has rolled back existing regulatory barriers, which kept many tech companies away from the kingdom.

He also set up a $45bn technology investment fund with Japan’s SoftBank in October last year.

About 70 percent of the Saudi population is under 30 and they spend a lot of time on social media.

In Saudi Arabia, the messaging and multimedia app Snapchat boasts more than 7m users a day.

Verdict deals analysis methodology

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GlobalData tracks real-time data concerning all merger and acquisition, private equity/venture capital and asset transaction activity around the world from thousands of company websites and other reliable sources.

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