Barclay’s Equity Research put out a note yesterday describing how a number of important themes emerged from Barclay’s inaugural Asia TMT Conference held this week. The conference was held in Hong Kong, and dozens of leaders in the PC, mobile and Chinese distribution markets attended.
Apple in Asia
Barclay’s lead analyst Ben Reitzes and colleagues are upbeat about Apple Inc. (NASDAQ:AAPL)’s latest moves into Asian markets.
“We continue to believe that Apple Inc. (NASDAQ:AAPL) will expand with formal distribution of its phones on the China Mobile Ltd. (ADR) (NYSE:CHL) network. However, we expect a gradual take rate given the network’s limitations – and note that there are already about 45 million iPhone users on the China Mobile network. This figure seems to have grown by about 10 million over the last four months, helped by the iPhone 5S and perhaps increased sales of refurbished phones.”
They are significantly less positive, however, about current and future PC sales, especially in several Asian countries. The consumer PC market continues to sag as people are spending more time online using tablets and smartphones. The looming expiration of Windows XP support is likely to support the corporate PC market in the U.S. and most of Europe as businesses purchase new PCs ahead of the April deadline, but not so much in other areas of the globe.
NSA leak revelations hurting major U.S. IT brands
The NSA leak revelations and the controversy surrounding former NSA contractor Edward Snowden who has received political asylum in Russia are also having a significant impact on the sales of major US IT brands such as International Business Machines Corp. (NYSE:IBM) and Cisco Systems, Inc. (NASDAQ:CSCO). In countries such as China and Russia, local and national governments, as well as large private enterprises, are holding off on purchases or buying from local providers to address privacy and national security concerns.