Asia May Not Be Easy Pickings for Apple

Investors in Apple Inc have a one-word answer for those who wonder whether this corporate juggernaut can maintain its phenomenal  momentum in the years ahead: Asia.

The iconic maker of the iPhone, iPad and iPod has barely scratched the surface of the region, home to around 60 percent of the world's population -- a fact that Apple itself alluded to in reporting an eye-popping set of earnings last month.

Virtually untapped Asian markets in China, India and Indonesia are waiting to be conquered, together home to around 2.7 billion people.

"It is very clear that in terms of demographics and emerging economic growth, Asia is where the action is. You have China, you have India, you have Indonesia - China and India, what you call "Chindia" is clearly the biggest game. India itself has got more than 800 (million) mobile connections already, but most of them are very low-end. Now as these customers go upmarket in terms of going for more value-added services, the market is wide open for an apple or a Samsung or any major phone maker to come in and capture the market," said technology analyst Madhavan Narayanan from his office in New Delhi.

Some who bought into the iPhone phenomenon said it was because of the product's sleek design.

"I feel it is much more sleeker and suits my personality, my taste. I just enjoy it and most of my friends have an iPhone. It is easy to use, so that's it, just because I am used to it," said an iPhone user who identified herself as Nishta.

But hundreds of millions of other aspiring Apple customers have a problem: they cannot afford to buy the main objects of their desire.

Pricing is an issue in India, where the smartphones of choice belong to Samsung, maker of the Galaxy, and to Nokia and RIM's BlackBerry.

In China, the latest iPhone did not go on sale there until last month, and there were near-riots as demand immediately ran ahead of supply, with empty-handed shoppers throwing eggs at Apple's typically minimalist glass-fronted store in Beijing.

Though its shares keep rising, its future earnings become cheaper: valued at about 30 times earnings a few years ago, Apple's stock now trades at half that multiple.

As Apple waits for Asian incomes to catch up, there is a risk that savvy competitors, especially main rival Samsung Electronics Co, could catch it napping with cheaper products that are becoming better, and cooler.