Apple and Amazon are in licensing discussions with Riyadh on investing in Saudi Arabia, two sources told Reuters, part of Crown Prince Mohammed bin Salman’s push to give the conservative kingdom a high-tech look.
A third source confirmed that Apple was in talks with SAGIA, Saudi Arabia’s foreign investment authority.
Both companies already sell products in Saudi Arabia via third parties but they and other global tech giants have yet to establish a direct presence.
Amazon’s discussions are being led by cloud computing division Amazon Web Services (AWS), which would introduce stiff competition in a market currently dominated by smaller local providers like STC and Mobily.
Riyadh has been easing regulatory impediments for the past two years, including limits on foreign ownership which had long kept investors away, since falling crude prices highlighted the need to diversify its oil-dependent economy.
Luring Apple and Amazon would further Prince Mohammed’s reform plans and raise the companies’ profile in a young and relatively affluent market, which already boasts some of the highest internet and smartphone use in the world.
About 70 percent of the Saudi population is under 30 and frequently glued to social media.
A licensing agreement for Apple stores with SAGIA is expected by February, with an initial retail store targeted for 2019, said two sources familiar with the discussions.
Amazon’s talks are in earlier stages and no specific date has been set for investment plans, they said.
Apple already holds second place in the Saudi mobile phone market behind Samsung, according to market researcher Euromonitor.
Amazon acquired Dubai-based online retailer Souq.com earlier in 2017, opening access for Amazon retail goods to be sold in the kingdom.
Both companies declined to comment, while SAGIA was not immediately available to answer questions about the discussions.