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Reader Survey: Apple Rides Recent Growth In Asia
For a company with a tiny market share in Asia, Apple Inc. has an outsized reputation.
Apple held just a 1.6% share of the personal-computer market in Asia in the second quarter of this year, and a 0.6% sliver of the region's mobile-phone market, according to technology market-research firm IDC. Yet Apple skyrocketed to the top of our annual Asia 200 survey this year, and was ranked by readers as the region's most admired multinational company. Last year, Apple ranked seventh.
Apple's sharp rise to the top spot over the past year reflects its fast-growing global reputation as a trend-setting technology company that continually turns out iconic products backed by unparalleled marketing savvy. Apple might not be a big player in Asia, in terms of market share, but the company's reputation looms large.
'Even if they don't have a big presence, they are tremendously successful at marketing themselves,' says Bryan Ma, the Singapore-based director of personal systems research at IDC. 'Look at the entire experience and aura they create, especially this globally connected age; everyone is hearing about this whole iPhone phenomenon, and can see their earnings are doing very well. Even if their market share isn't so big out here, these are things that businesspeople and executives in Asia would certainly respect and admire.'
Apple's ability to sidestep the global economic crisis has gained the company fresh respect. In July, Apple posted a 15% rise in profit for the fiscal third quarter ended June 27, and said it couldn't supply enough iPhones and Macintosh computers to meet demand. Shipments of Mac computers rose 4% to 2.6 million, although revenue fell 8% as the company cut prices on some models. Still, that stands in contrast to PC sales, which have slumped globally. Apple's results were fueled by surging demand for its 3G iPhone: the company sold 5.2 million iPhones in the quarter, more than seven times what it sold a year earlier.
Apple's focus remains on its core U.S. market, and also on Europe. Apple shipped 53% of its Macintosh computers to the U.S., 24% to Western Europe and 14% to Asia, in the second calendar quarter of this year, according to IDC. While the company's iconic iPod is popular in Asia, Apple's iTunes store remains out of reach of most Asian consumers. Apple has set up iTunes in Japan and Australia only. Copyright is the big hurdle. Apple has to conclude deals with individual record labels at the country level to allow songs to be sold on the iTunes platform in each market. That labyrinth process has mired efforts to make the service more widely available in Asia. The company is also likely concerned about piracy in Asia, say many analysts.
Still, the company is expanding its presence. Apple opened its first company-owned Apple retail store in Asia, outside of Japan, in China last year. Meanwhile, it has signed agreements with Asian mobile-phone carriers outside of Japan to distribute its hot-selling iPhone in the past 12 months. The product, which was already on sale in Japan, is now available in Hong Kong, Singapore, Malaysia, Indonesia, the Philippines, India, Thailand and Taiwan. In late August, China Unicom (Hong Kong) Ltd. announced a three-year deal with Apple to sell the iPhone in China later this year.
The release of the iPhone, Apple's latest must-have gadget, in Asia has helped buoy the company's profile in the region. More than 2,000 people in Singapore queued up for hours when domestic carrier Singapore Telecommunications launched the iPhone on July 10. The customer at the front of the line reportedly waited for 11 hours.
Apple has also managed to lift its share of other core segments in Asia. The company's 1.6% share of personal computers in the second quarter of this year marks a steady rise from the 1.1% share in the first quarter of 2007. The 0.6% share it has in the Asian phone market, meanwhile, is notable given the iPhone has been available in most of Asia for less than a year.
Those efforts are paying off. Apple ranked second in the Asia 200 survey in the innovation category, up from seventh last year. When asked to rank multinational companies by the long-term vision of their management, readers ranked Apple second this year, up from sixth.
'For a company that, from a product-line perspective, isn't that broad, it is rather admirable they can create so much demand, so much hunger and so much loyalty -- even out here in Asia, where the priority for the company might not be as high,' says IDC's Mr. Ma.
On Wednesday, Apple CEO and founder Steve Jobs appeared in public for the first time since he received a liver transplant earlier this year, unveiling new offerings that included an iPod Nano with a video camera.
