Apple Inc. (NASDAQ:AAPL)’s early entry into the market, as well as the name recognition that comes with it, will help expand Apple’s brand and grab a lion’s share of the profits of this growing sector of the economy. It can be done by dumping gadgets that are nearly obsolete everywhere else, boosting Apple’s profits further than in other markets that require constant innovation to stay competitive.
Can Sony break through potential clutter for TVs?
As Apple takes on the smartphone market, Sony Corporation (ADR) (NYSE:SNE) will be in the market for TV screens, though its presence will be less than Apple or Boeing in the future. The government is hoping that foreign companies will be making these phones and screens in India, as well as encouraging domestic companies to get in on the act.
Sony has announced, though, that it will be not building plants in India, choosing instead to export screens to India for sale to save costs of factory development. Screens are a much more competitive field than smartphones in Asia, since they can be done with less manpower by smaller companies, so Sony Corporation (ADR) (NYSE:SNE) will need full television sets to carry the workload for the company.
Also, with time, local companies will be competing directly with Sony, and will have the advantage of a supportive government and proximity to the customer base if Sony Corporation (ADR) (NYSE:SNE) continues with its export-only strategy for India.
The bottom line
There is still room for growth in India for Sony, but given the smaller market share Sony will have and a potentially smaller market, the company won’t be as hot of a ticket as Apple Inc. (NASDAQ:AAPL) and The Boeing Company (NYSE:BA) will be in the future. All three companies clearly see the advantages in investing in India’s future; their numbers back this statement up. Emerging Asian markets are always good investment opportunities, and India has been a bit of a dark horse compared with nations like China and Japan, though this may change.
The Boeing Company (NYSE:BA) and Apple Inc. (NASDAQ:AAPL) are the two better buys in this group, since Sony Corporation (ADR) (NYSE:SNE) has a smaller market to capture and better opportunities with the PS4 elsewhere. India is a long-term buy for these companies. Until domestic production ramps up to meet the demand, expect good returns for these foreign companies over the next decade or so.
The article Bull Market in the Land of Sacred Cows originally appeared on Fool.com and is written by John McKenna.
John McKenna has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. John is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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