Apple got rich in China. Other Asian markets offer the next ‘golden opportunity’

Analysis by Michelle Toh, CNN

Published 8:21 PM EDT, Fri May 19, 202302:29 - Source: CNN

Hong KongCNN — 

Apple launched an online store in Vietnam this week, in another nod to the growing importance of emerging markets for the iPhone maker.

Apple has ample room to run in these markets.

The opening on Thursday, which followed the high-profile launch of its first physical shops in India, means consumers in the fast-growing Southeast Asian economy will be able to buy any Apple product directly for the first time.

Markets like Vietnam, India and Indonesia are becoming more important for Apple as its growth in developed markets, including China, slows down, prompting the company to focus on places where it’s traditionally been less active.

For decades, China was central to Apple’s extraordinary ascent to become the most valuable company on Earth, serving as a backbone for both its production and consumption. While the country remains key to Apple’s operations, the tech giant is now hedging its bets.

Apple (AAPL) CEO Tim Cook has pointed to the company’s prospects in emerging economies, calling them bright spots in the company’s financial results. On an earnings call this month, Cook said he was “particularly pleased” with the performance in these markets during the first three months of the year.

Apple “achieved all-time records in Mexico, Indonesia, the Philippines, Saudi Arabia, Turkey and the UAE, as well as a number of March quarter records, including in Brazil, Malaysia and India,” he told analysts.

That came as the California-based giant also reported its second straight drop in overall quarterly revenue, prompting concerns about a broader slowdown in demand amid economic uncertainty.

“Clearly, growth has slowed globally and thus put more pressure [on Apple] to aggressively go after emerging markets,” said Daniel Ives, managing director of Wedbush Securities.

A ‘mega-market’

Ives predicts that “over the coming years, Indonesia, Malaysia and India will comprise a bigger piece of the pie for Apple, given its efforts in these countries.”

The start of online sales in a country usually precedes the launch of brick-and-mortar stores for Apple, he told CNN. This was true of India, for instance, which got its first physical outlets last month and a pledge from Cook to further invest in the country.

Thursday’s launch showed how Apple was “further cementing” its presence in emerging markets, according to Chiew Le Xuan, a research analyst who covers smartphones in Southeast Asia for Canalys.

He said the tech giant had been “actively increasing” its presence in the region in recent months, ramping up its distribution and network of authorized resellers, especially in Malaysia.

Apple has ample room to run in these markets