Friday, August 28, 2009

Apple -- The New Asian Stock

Apple (APPL) is going to China and will make a gazillion dollars selling the iPhone. Anyway that’s what everyone seems to think right now. China Unicom will not participate in ongoing recurring fees, which should concern investors. Where is the loyalty? China has always been a complex market. Communications is the new commodity much like aluminum, copper or oil is now.

The Chinese government tends to want to control the game when it gets large enough. They may want to pick the winners. Our Western tendency where investors look at a company’s prospects and ignore government will not serve us well. How will Apple fare?

In the meantime looking at the huge China numbers Apple will become a significant Asian stock with substantial income in Yuan. That is if you believe the hype. Will Apple be looking to sell Yuan and buy US$. Small for China. Small for Uncle Sam. Big for Apple.

Apple will need to acquire new skills beyond just coming out with new technology.