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67% of potential Asian iPhone buyers remain untapped by Apple

post #1 of 14
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The iPhone could see huge sales numbers in Asia as the region's burgeoning smartphone market has been largely untapped, with only about 22 percent of carriers selling Apple's handset, according to a new analysis.

In a note to investors on Monday, investment bank Morgan Stanley said that expanding the number of mobile carriers that offer the iPhone within Asia's emerging smartphone market is Apple's biggest worldwide opportunity for device sales.

Analyst Katy Huberty estimates that carrier expansion has driven about 50 percent of overall cellular subscriber growth globally since 2008, with carrier growth playing a significant factor in driving iPhone sales. Since its launch on AT&T's network in 2007, Apple has partnered with over 230 carriers in 105 countries, helping iPhone shipments grow from 270,000 units in its first year to over 20 million units per quarter in 2011.

Huberty notes that smartphone penetration is highest among 25 to 34 year olds with Asia having 655 million people, or 10 percent of the world's population, in that age group. The second-largest demographic is Africa with 153 million people.

However, Asia's large smartphone demographic is largely untapped, with Apple's handset yet to be offered by 78 percent of Asia's carriers, which represents 67 percent of the region's subscriber base. In contrast, carrier penetration in North America and Western Europe is high with mobile subscribers without access to the device being 56 percent and 36 percent, respectively.

China, Asia's largest mobile market and second-largest worldwide, is seen as key to Apple's success. In the recent AlphaWise China smartphone survey, 90 percent of respondents said their next purchase was likely to be a 3G phone, with 91 percent saying they would opt for a smartphone. This was up from 87 percent and 88 percent, respectively, from the first half of 2011.



According to the survey, the iPhone was the strongest brand, with 38 percent of respondents saying they planned to purchase the smartphone as their next device. Huberty believes that Apple can can more than double demand by introducing a cheaper $300 phone, as the survey suggested that many would-be iPhone buyers care most about device cost.

AppleInsider recently reported that Apple's potential market in China is already on the rise as the number of 3G users surpassed 100 million at the end of October. Currently, only China Unicom, the nation's second-largest carrier, is the only company licensed to sell the iPhone. However, unlicensed nation-leader China Mobile reported over 10 million customers using the device on its network, and analysts expect that all three major Chinese carriers will be offering the iPhone by 2012.



Huberty sees carrier expansion as the main factor in driving sales in the region, but a hindrance to the iPhone's growth in emerging markets has been pre-paid subscribers, who account for 69 percent of global cell users.



Historically, the number of post-paid subscribers grows more slowly compared to pre-paid, however the trend reversed in June 2011, when post-paid growth outpaced pre-paid growth for the first time. This could mean increased demand for the data-centric iPhone if contract subsidies and low-priced models are introduced.

Huberty gives AAPL a bull case price of $600 based on an LTE iPhone upgrade and lower priced 3G iPhone in 2012, an expanding Apple-dominated tablet market, growing distribution in China and the potential for Apple to enter the Smart TV market in 2012-2013.
post #2 of 14
I didn't think I'd ever agree with Katy Huberty but when you're making such obvious general statements I suppose it's bound to happen.

I've love to see a China Mobile iPhone. They have already surpassed Jobs 1% without even having an official device, and one that can only do good as EDGE data on the cellular network.
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post #3 of 14
Still, it's like pointing out that Apple only has 10% desktop market share and 90% remains untapped as potential Apple desktop users. The potential may be there, but the conversion is very hard to do if not impossible. Wall Street is always betting that Apple can't convert users in high quantity because their products cost too much relative to Wintel products or Android-class products. Apple just isn't that greedy a company to tackle huge amounts of market share in a short time. I don't blame Apple in that respect. It's just that Wall Street seems only interested in companies that do massive, quick conversions of market share.
post #4 of 14
Quote:
Originally Posted by Constable Odo View Post

Still, it's like pointing out that Apple only has 10% desktop market share and 90% remains untapped as potential Apple desktop users. The potential may be there, but the conversion is very hard to do if not impossible. Wall Street is always betting that Apple can't convert users in high quantity because their products cost too much relative to Wintel products or Android-class products. Apple just isn't that greedy a company to tackle huge amounts of market share in a short time. I don't blame Apple in that respect. It's just that Wall Street seems only interested in companies that do massive, quick conversions of market share.

1) The conversion to iPhones is not the same as a conversion from Wintel ( plenty of the market is non-smart phone in any case). No real software lockin, in fact none in the case of Android.
2) The article said that up to 38% of this market want an iPhone.
3) subsidised phones are becoming increasingly common in these markets.

Its not true that Apple won't introduce a lower end machine, they do that when they release new machines. Expect the iPhone 5 in summer, and expect that the 3GS, 4, 4S are all continued and drop in price.
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post #5 of 14
China and India between them have about 37% of the worlds population, but:

Quote:
penetration is highest among 25 to 34 year olds with Asia having 655 million people, or 10 percent of the world's population, in that age group.

supposedly only 10% of the quoted demographic?

I somehow doubt that. India looks to be the one to watch:

http://trak.in/tags/business/2007/05...g-in-disguise/
post #6 of 14
Quote:
Originally Posted by cnocbui View Post

China and India between them have about 37% of the worlds population, but:



supposedly only 10 of the quoted demographic?

I somehow doubt that. India looks to be the one to watch:

http://trak.in/tags/business/2007/05...g-in-disguise/

Indians are just as fashion and brand conscious as the Chinese. They have a population of 1.2 billion, very fast economic growth (similar to China's) with the second largest mobile market in the world and a very fast growing middle class who can afford smartphones.

So far the main impediments to iPhone gaining traction in India have been

1) The slow roll out of 3G networks, but this is now accelerating fast

2) iPhones have so far only been available on Aircel, one of the smaller Indian carriers. But now Bharti Airtel, India's largest carrier is just starting to offer iPhones, which will greatly accelerate iPhone sales!

http://www.appleinsider.com/articles...ket_india.html
post #7 of 14
Quote:
Originally Posted by Constable Odo View Post

Still, it's like pointing out that Apple only has 10% desktop market share and 90% remains untapped as potential Apple desktop users. The potential may be there, but the conversion is very hard to do if not impossible. Wall Street is always betting that Apple can't convert users in high quantity because their products cost too much relative to Wintel products or Android-class products. Apple just isn't that greedy a company to tackle huge amounts of market share in a short time. I don't blame Apple in that respect. It's just that Wall Street seems only interested in companies that do massive, quick conversions of market share.

I would not agree with apple not being greedy, I did read that apple has a 7% of the mobile phones market share worldwide and they take home 51% percent of the total profits of the mobile phone industry, that is staggering. Nokia was in similar position not far back as 2007 2008. Wall street guys are always seeing at the glass half empty and base their analysis on what ifs, but reality is different.

Apple has the largest market cap in the world I don't think one can grow bigger than number one.. the trick is to be in the top.. getting to the top in comparison is the easy job and Apple is doing a great job till now. Time will be a good judge.
post #8 of 14
Quote:
Originally Posted by cnocbui View Post

China and India between them have about 37% of the worlds population, but:



supposedly only 10% of the quoted demographic?

I somehow doubt that. India looks to be the one to watch:

http://trak.in/tags/business/2007/05...g-in-disguise/

You can discount India... the pricing for iPhone 4S is ridiculously high.. the base model 16GB is costlier than the 64GB in US.. and the Iphone4 8GB now costs more than the iPhone4 16GB according to news reports.. I don't think Apple is even making an effort to get into the Indian Mobile market.
post #9 of 14
Quote:
Originally Posted by Secular Investor View Post

Indians are just as fashion and brand conscious as the Chinese. They have a population of 1.2 billion, very fast economic growth (similar to China's) with the second largest mobile market in the world and a very fast growing middle class who can afford smartphones.

So far the main impediments to iPhone gaining traction in India have been

1) The slow roll out of 3G networks, but this is now accelerating fast

2) iPhones have so far only been available on Aircel, one of the smaller Indian carriers. But now Bharti Airtel, India's largest carrier is just starting to offer iPhones, which will greatly accelerate iPhone sales!

http://www.appleinsider.com/articles...ket_india.html

Just to correct you, Iphone 3GS was available on Vodafone and Airtel
Iphone 4 and 4S is available both on Airtel and Aircel.. Vodafone is out and never had iPhone4
post #10 of 14
Quote:
Originally Posted by cnocbui View Post

India looks to be the one to watch:

Well, it won't be much of a market if Apple has their way. Some points of note:

1. The iPhone 4S 64GB model costs approximately $1100.
2. There is not even one Apple Store yet. All we have are authorised resellers.
3. There is no online Apple store either. I had to fax a copy of my details to Apple to enroll for the dev. program.
4. No iTunes Music Store. I guess the infrastructure v/s benefit was not lucrative enough. But if Apple could work out a deal with the Indian music companies, then they could have a winner on their hands by releasing film music online.
5. Absolutely no talk from Apple about anything to do with India.

All these make me think that, even with a high poulation of affluent/ upper middle-class people, maybe Apple isn't selling the kind of numbers here that makes them sit up and take notice.

I am seriously in 2 minds about picking up the 4S since it costs so much, but my 3GS is on it's last legs.
post #11 of 14
Quote:
Originally Posted by BestKeptSecret View Post

Well, it won't be much of a market if Apple has their way. Some points of note:

1. The iPhone 4S 64GB model costs approximately $1100.
2. There is not even one Apple Store yet. All we have are authorised resellers.
3. There is no online Apple store either. I had to fax a copy of my details to Apple to enroll for the dev. program.
4. No iTunes Music Store. I guess the infrastructure v/s benefit was not lucrative enough. But if Apple could work out a deal with the Indian music companies, then they could have a winner on their hands by releasing film music online.
5. Absolutely no talk from Apple about anything to do with India.

All these make me think that, even with a high poulation of affluent/ upper middle-class people, maybe Apple isn't selling the kind of numbers here that makes them sit up and take notice.

I am seriously in 2 minds about picking up the 4S since it costs so much, but my 3GS is on it's last legs.

That seems nuts. Apple have clearly decided to just make some money from the Indian rich, for now, and ignore the growing middle classes. For now. So much for going after the other 95%.
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post #12 of 14
Quote:
Originally Posted by BestKeptSecret View Post

Well, it won't be much of a market if Apple has their way. Some points of note:

1. The iPhone 4S 64GB model costs approximately $1100.
2. There is not even one Apple Store yet. All we have are authorised resellers.
3. There is no online Apple store either. I had to fax a copy of my details to Apple to enroll for the dev. program.
4. No iTunes Music Store. I guess the infrastructure v/s benefit was not lucrative enough. But if Apple could work out a deal with the Indian music companies, then they could have a winner on their hands by releasing film music online.
5. Absolutely no talk from Apple about anything to do with India.

All these make me think that, even with a high poulation of affluent/ upper middle-class people, maybe Apple isn't selling the kind of numbers here that makes them sit up and take notice.

I am seriously in 2 minds about picking up the 4S since it costs so much, but my 3GS is on it's last legs.

I would suggest you support local talent and purchase one of Samsung's Wave models with Bada on it, since Bada is developed in Bangalore I believe. I could have an iPhone but I chose to get a Wave S8500 and have never regretted it for a second.

When I said India was the one to watch, it was really in reference to the long term demographic trending on the page I linked. It showed China's population as aging faster than any other country so the 'sweet spot' age range will decline there while it looks likely to increase in India. Also, India will 'soon' be more populous than China.
post #13 of 14
Sizable populations in no sense guarantee economic success.
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post #14 of 14
Ain't going to mean a thing unless Apple make content available in Asia. I'm in Singapore and I still can't get music, tv, film or books on my devices. Tired.
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