Apple (AAPL) to Set Up New Research Center in Japan
Apple Inc. (AAPL) recently announced that it is set to open a new research center in Yakohama, Japan. However, nothing related to what this center will be used for has been revealed.
This announcement was made by the company following the declaration by the Japanese Premier, Shinzo Abe that Apple intended to step up its research-related investments in the nation in the near future.
Owing to Abe’s extensive economic program commonly referred to as Abenomics, the yen has depreciated, thus making investments in Japan more lucrative for foreign investors. Focusing on this aspect, Shinzo Abe declared that just like other foreign-based companies, Apple too was keen on making investments in the country.
Apple’s products are very popular with the masses in Japan. Per a recent report from Kantar Group, iPhone accounted for 48% of the total smartphone market share in Japan for the month of Oct 2014.
The new research center is likely to create employment opportunities for a large number of locals. We believe that this will also add to the popularity of Apple’s devices in Japan.
Currently, in Asia, Apple has research centers in China and Taiwan. It has several research centers in Israel and is considering some sites in Europe too for the same.
We believe that though the development of research centers will weigh on Apple’s margins in the near term, they will be major growth catalysts over the long term.
We believe that Apple’s loyal customer base and innovative product pipeline are major positives. Moreover, the company’s entry into various new spheres such as health care, automobiles and others will boost top-line growth in 2014 and beyond. However, stiff competition from the likes of Samsung, Hewlett-Packard (HPQ), Microsoft (MSFT), AMZN (AMZN) and Dell remains a headwind.
Currently, Apple sports a Zacks Rank #1 (Strong Buy).
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