Why Asia may not be easy for Apple

Vendredi 27 janvier 2012 5 27 /01 /Jan /2012 08:55

Why Asia may not be easy for Apple

BANGALORE / HONG KONG: Investors in Apple Inc. have a short answer for those wondering if this behemoth company can maintain its phenomenal momentum in the years to come: Asia.

The manufacturer of the iconic iPhone, iPod and iPhone has barely scratched the surface of the region, home to about 60 percent of the world population - a fact that Apple itself alluded to in reports an eye-popping set of recipes this week.

Apple numbers, which jumped 70 percent in December quarter revenues and a doubling of profits, sales actually excluded from its hot new product, the iPhone 4S, its single largest potential market in China.

The latest iPhone has not sold that month until, and there were almost riots as demand immediately ran ahead of supply, with buyers throwing away empty eggs in the overall minimalist Apple store windows in Beijing.

And in the long shadow of China, other Asian markets virtually untapped as India and Indonesia are waiting to be conquered, and home to about 1.4 billion people.

"I want an iPhone because life is a fashion phone to have," said Dylan 19 years working in a hip fashion boutique, the Department of merchandise in central Jakarta.

A haircut in fashion sports a long necklace pendant, vintage jeans and Ray Ban sunglasses, it is typical of the style-conscious consumers everywhere where the sleek Apple devices are not as useful gadgets fashion accessories as required.

But Dylan, and hundreds of millions of other aspiring Apple customers from Jakarta to Shanghai to Mumbai, have a problem: they can not afford the principal objects of their desire. At about $ 830, even the older iPhone 4 is twice the monthly salary of a young foreign exchange broker in Jakarta.

This simple fact - inaccessibility emerging Asia - began testing the faith in the ability of Apple to maintain its uncontrolled growth in sales without a foray into a major category of new products, such as television. Although its share is increasing, future earnings become cheaper: estimated at around 30 times earnings a few years ago, Apple's stock now trades at half that many.

As Apple expects revenues to catch up Asian, there is a risk that competitors warned, especially main rival Samsung Electronics Co, could catch a nap with cheaper products that are better and better, and cooler.

Indonesia remains a redoubt of the BlackBerry from Research in Motion Ltd., largely because it is more affordable, according to those who, like Dylan who use it: "If they (the iPhone) got cheaper, I consider to buy, "he says matter of factly.

Pricing is also a problem in India where smartphone of choice belongs to Samsung, the manufacturer of the Galaxy, and Nokia and RIM BlackBerry.

"I would have bought one but I did not have enough money to buy it. It's that simple, "said Mukherjee Soubhik, 26, a marketing strategist for social media in New Delhi.

"It's pretty ridiculously expensive in India ... I do not have that kind of disposable income. "

Mukherjee plans to buy a smartphone next month and is considering a BlackBerry or a Samsung Galaxy. "Apple's greatest strength so far has been the user interface. This is the most elegant possible, telephone, opportunities, design, essentially the App Store ... But I guess now there is an alternative. Two years ago he was not there, but now it is there. "

The cult of Apple
Industry experts say Apple could develop a less expensive version of the iPhone for major Asian markets, without compromising its margins prodigious, but other obstacles remain, such as the compatibility of new products with local telecommunication networks and how distribute them.

In China, for example, network technology is not sufficient to fully support the iPhone and iPad capabilities, while some customers there can not surf the Internet or by aircraft unless they connect to a hotspot such as Wi-Fi in a coffee shop or hotel.

Supplier of China's largest service, China Mobile Ltd, with over 600 million subscribers, may not adapt the technology commercially in place until the end of this year or in 2013.

Network problems also exist in India, where 3G telecommunications services are just beginning to be deployed, as Apple prepares for revolution in 4G markets advanced.

The pick-up of 3G in India has been slower than expected, partly because of high cost services, but mainly because most Indians still use phones just to talk or send text messages. Internet browsing and video calling are a technological world away for those who live outside the cities of India.

Even after overcoming the challenges of the Asia network, Apple still needs to meet the region's penchant for prepaid phones. Consumers prefer not to sign contracts for 12 months or two years under which the carriers are more likely to subsidize the cost of an iPhone and help drive sales.

"I do not carriers subsidize the cost of the device," said Anshul Gupta, principal research analyst at Gartner Inc. consulting

"There is no money to the consumer, there is no money with carriers ... When they (the carriers) the cost of subsidizing the device, they will have to pay Apple money in advance. "

Do not worry, wait
Despite signs that Asia is not all ripe fruit, ripe for the picking by Apple, some industry analysts believe collective aspiration of the region for iPhone will finally be satisfied, and keep the profits from Apple causing an outbreak.

China has more than 950 million mobile phone users, more than the population in Europe and its economy could surpass the U.S. as the world's largest in 15 years.

Barclays Capital said five Apple stores in China and Hong Kong's busiest and among the best revenue generators on the planet, a hint of potential in the coming years as it confronts Samsung on its own ground in Asia.

Chinese demand is so high that smuggling iPhones and actual sales are rising counterfeit and imitation stores disguised as real Apple stores - and the actual sale of Apple products - pushed around in Beijing Kunming.

"Incompatible network and such questions will probably get fixed quickly. I do not think it's an issue that could be a real obstacle, "said Gokul Hariharan, an analyst at JP Morgan in Hong Kong.

"Prices, probably yes, it would go over time to allow penetration of the market, but I think for now the brand is essentially viewed more as a brand aspirations ... Even from 10 to 15 percent penetration in made quite a few high. "

Around the region, distributors of Apple are finding new ways to ease the burden of buying an iPhone or iPad. Croma, an Indian electronics store retail chain owned by the Tata Group, offers a WiFi only version of the iPad 2 for a down payment of only 2458 rupees ($ 50) with the remainder due in 12 equal monthly installments.

Currently, however, Apple's overall sales in the Asia-Pacific region, excluding the mature market of Japan accounts for less than a fifth of group sales and penetration of the iPhone, the best-seller , trails behind his great rival, Samsung.

For some analysts, it is more likely to Apple while it waits for Asians to scrimp and save for an iPhone or iPad, these consumers instead of developing a taste and loyalty to Other products such as smartphones and tablets Samsung Galaxy.

From Apple in the smartphone market has more than doubled in China since the first quarter of 2010, but Samsung, which recently adopted Apple as top global manufacturer of smartphones, has meanwhile seen its share to more than quadruple.

Apple stole back his lead world with sales of 37 million iPhones in the December quarter, more than double its sales from a year earlier, against 36.5 million for sales of Samsung smartphones, according to research by Strategy Analytics company.

But other hungry competitors are aggressively targeting eyeing China and other emerging Asian markets.

China's own Huawei Technologies and ZTE Corp produce smartphones for less than 2,000 yuan ($ 320), half the price of a basic iPhone 4.

Apple wanted
New boss of Apple, Tim Cook, who took over as CEO shortly before the founder Steve Jobs died in October, China is aggressively and said the experience could help Apple to enter other emerging Asian markets.

Apple suggested that the addition of carriers is probably a way to develop in these countries, but no announcement has been made.

"I tried to be very clear in the past and will do again, we have a ton of energy in the China market today," Cook said in the presentation of results Apple on Tuesday.

"China is an extremely important market for us and we continue to consider how to continue to develop it."

Some analysts say that Apple needs to accelerate its expansion Asian Development cheaper phones and work with more telecommunications carriers in the region, but confidence remains high that it can expand into new markets and keep the juggernaut rolling .

In Indonesia, consumers like Dylan vendor will be waiting for him.

"The opportunity for Apple to dominate the market is there, perhaps more than three years from now that our GDP per capita is increasing and the price the iPhone is down," said Harry Su, head of research to securities based in Jakarta PT Bahana.