Even with widespread counterfeiting in China, many luxury brands are experiencing success in the Middle Kingdom, albeit not likely as much if the Chinese government enforced intellectual property rights more rigorously. Along with Apple reporting strong Asian sales, other companies have also posted impressive numbers.
Coach, the well-known luxury handbag maker, reported strong revenue growth and earnings in the Chinese market. The sales are so strong, in fact, that the Board of Directors announced an increase in the dividend. Coach increased the store count in China by five, bringing the total to 85 stores in mainland China. This is important to Apple investors because it helps demonstrate a growing desire by Chinese to buy high-quality name-brand products at premium prices.
Perhaps Apple's biggest challenge in China is keeping one step ahead of Google's Android and the plethora of smartphone manufactures in and around that country. Nokia has recently found its way into the media headlines with the Lumia 900.
It remains to be seen if Nokia can take market share from Apple and Android. We have seen this movie before with the Palm Pre back in 2009. Unlike a Hollywood story, it didn't end very well for Palm. Nokia will not only need to produce enough Lumia's to build critical mass, but follow up with another solid product or fall into irrelevancy as other makers undoubtedly push ahead.With Apple's titanium-strong balance sheet, growth and low price-to-earnings, it's a safe bet to assume Apple's story is far from over and the best is yet to come.
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