The Asian-Pacific region, in many ways, is farther ahead in technology than other regions of the world especially when we think about using mobile devices and even watching videos on mobile. Google (GOOG) is marketing well in this region and has some great plans for the future. Let's take a look at opportunities that Google has in the Asian-Pacific region.
In markets like Japan, people have been using their mobile phones to access information for years. This plays well for Google since it is so strong in the Japanese market. Not long ago Google's android and Apple's iOS represented over 80% of the market with Google almost claiming a 10% edge.
Present Monetization Plans by Google
Presently, Google is monetizing the Asian-Pacific mobile market through two different means. The first one is through search advertising where it has invested heavily in products that make it easier for people to get answers that they want on their devices. One example of this would be its "Click-to-Call" service. Consumer driven businesses like restaurants and hotels can display links next to searches so people can click on those links to make phone calls to the businesses. When people are searching for goods or services on their smartphones, they often prefer to call a business rather than visit its website and that's why this service is becoming more and more popular. Not only does it save the consumer time but it makes it more convenient to be able to make a quick call instead of surfing the website. The second way that they make money on their mobile devices is through display ads using mobile apps and/or mobile websites. As in the United States consumers can click on and view the display ads at their leisure; YouTube also has a similar product that viewers can click on.
Data Centers Complete this Year- the Need for Speed
To stay competitive in this region, Google is building three new data centers in Singapore, Taiwan, and the third in Hong Kong. This region could find Google's performance up to 30% faster, even on the Indian subcontinent which is a challenge for speed. Interestingly enough India is one of Google's largest markets. The entire project should be finished by the second half of 2013; this shows how Google intends to stay competitive in this region which is growing faster than anywhere else on the globe.
Mobile Video Usage
On the video front, YouTube has grown tremendously in Asia. Businesses and artists, from K-pop musicians in Korea to makeup artists in Australia, are using it in many different ways. In fact, Australia is expected to pass Japan and become the largest data user in the Asian-Pacific region by 2015. Putting usage in perspective, Australia is expected to use about 4038 MB of data usage per mobile connection-per month. The more populous countries of India and China are expected to use 381 and 346 MB respectively. This is great news for Google because it dominates the Australian market with a 90+ percent market share. Even their social platform Google+ has made a promising start, so its dominance is showing no signs of abating any time soon.
Greatest Asian- Pacific Region Challenge?
If I see one challenge for mobile businesses, it is this: in the Asia-Pacific region, more than half of the companies in the region don't have mobile-optimized sites. The experience of users visiting a business website on their mobile devices can be a very underwhelming experience. They go to a desktop site and they have to play with the device trying to enlarge the page. Some of the content may not be viewable, or it may not be possible to complete a purchase because the site is not mobile-optimized. Given the opportunities that will arise in the next couple of years for companies following users on mobile devices, the current state of many businesses that are not waking up to the challenge is amazing.
And China continues to be a challenge for Google's OS and its official app store. It appears the Google "Play Store" has become a minor distribution channel for Chinese apps compared to what it should be. In the past it has not supported paid apps in China and foreign developers have not used it to publish their apps to the locals. As opportunity knocks other local servers have developed to fill the gap for distribution. There are dozens of alternative android stores that offer apps in China that are offered not directly on Google's "Play Store" that are Android compatible.
Google is in a text book bullish trend that has just finished its second leg, and if it continues like most trends we should see a third leg up. This third leg is usually smaller than the first leg. It has uniformly used the middle Bollinger band as support except the two times it came down to the lower band to rest. The last two highs look over bought in the RSI indicator but as it came down, it barely dropped through the 50 line and this shows strength. We have the same type of strength shown in the MACD indicator as the recent lows also stayed above its zero line which separates Bulls from bears, so the stock still looks like it's moving strong.
Google does have challenges in the Asian-Pacific region, that companies face challenges globally is not new. It is positioned well in places like Japan and Australia. While mobile data usage continues to grow Google will continue to adapt and prosper. Australia uses 10 times the mobile average per phone than India and China, but eventually those markets will catch up and with populations unfathomably more than Australia, the market potential is incredible. I am sure Google will be able to navigate its challenges from its App Store in China and the semi slow speeds of India over time. Expect this company to continue to grow, and grow, and grow.