Verizon Sees Earnings Potential In The Asia-Pacific Market

| About: Verizon Communications (VZ)
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In a very short time, the Asia-Pacific (APAC) market has seen tremendous growth, thanks to increased availability of technology and growing consumerism. The APAC market includes countries such as India, Japan, People's Republic of China, Hong Kong, Thailand, Australia, New Zealand, and more. Attracting interest from many international companies, this region will continue to see growth in three areas: cloud computing, big data storage, and machine-to-machine technology.

Verizon (NYSE:VZ) recently expressed its intent to expand further into APAC. Getting in now may prove a smart move as this region will soon be saturated with companies all vying to turn hefty profits.

Cloud Computing

As businesses throughout APAC continue to grow, cloud computing may become a necessity. In many cases, older computer systems simply can't handle the demands for increased data storage, faster network speeds, and the software and equipment needed to support telecommuting. Older computer systems often require expensive maintenance and upgrades that startups and young companies can't afford.

Cloud computing, or a hybrid system that combines old functionality with new web hosting solutions, may help bridge the gap. But even large companies like Verizon face competition when it comes to providing cloud computing services. Australian-based Telstra International recently announced plans to expand cloud computing services to countries throughout APAC.

With the acquisition of Hughes Telemetrics, which manufactures wireless automobile computing systems and Terremark Worldwide, which specializes in cloud computing, Verizon hopes to beat the competition with the ability to offer both wireless and cloud computing services to businesses.

Other companies including Amazon (NASDAQ:AMZN) and Oracle (NYSE:ORCL) also want to compete in the APAC cloud computing market. With the announcement of a third Amazon Web Services data center in Sydney, Australia (the company owns two other centers in Singapore and Tokyo), Amazon hopes to provide cloud services to small, medium, and large businesses.

Oracle recently introduced two new server and storage options for mid-sized businesses through the APAC region.

Big Data Storage

Closely following the need for cloud computing services is the need for big data storage capability in the APAC market. Big data includes large documents and presentations, financial records, employees records, and other documentation businesses need to keep, but don't necessarily have a present need for.

The need for big data storage may also include the compiling of marketing and sales information that companies need continuous access to in order to grow. Instead of printing out endless paper copies, the ability to store this information online not only reduces storage costs, but also helps companies maintain security.

Through its acquisition of Terremark Worldwide, Verizon can offer businesses cloud computing and data storage services. But many other companies including Amazon, EMC (EMC) and SAP (NYSE:SAP) provide big data storage solutions within the APAC marketplace, which provide plenty of competition for Verizon going forward.

To help bolster its reputation in the big data storage market, Verizon, along with Fujitsu and eBay (NASDAQ:EBAY), have formed The Big Data Working Group to address concerns businesses have pertaining to storage security. The group hopes to invite additional companies from around the world to help develop best practices and strategies to promote better online security.

Machine-to-Machine Technology

Demand for interconnected devices continues to rise throughout the Asia-Pacific region. Verizon is counting on its acquisition of Hughes Telemetrics to help the company expand into the automotive industry by providing entertainment and onboard safety systems.

In the U.S., Sprint (NYSE:S) has had some success after partnering with insurance providers to install onboard M2M systems to monitor driving habits. The data gathered was used to develop good driver reward programs, design new insurance structures based on driving ability, and monitor emergency response times.

With various services including Wi-Fi, television, hands-free calling, and driver monitoring, M2M technology has grown quickly in a very short time. And with the growing number of people throughout the Asia-Pacific region driving, demand for these services should only continue to grow.

Verizon Stock

With sales and revenue in 2011 totaling $110.88 billion, but long-term debt standing at $50.3 billion, investors should continue to monitor Verizon's movements over the next year. Even though the company has made changes to its business plan that includes shifting its focus to the Asia-pacific region, investors need to remain wary as competition in cloud computing, big data storage, and machine-to-machine technology will remain high. This is because many companies have shifted focus to this particular market as well.

But with its recent acquisitions, well-known brand, and ability to offer a variety of products and services, Verizon should maintain a strong presence in this market. In addition to the Asia-Pacific region, Verizon still has a strong hold in the U.S mobile phone market. The company's "Share Everything" plan has proven successful even after receiving mixed reviews from analysts. If Verizon can continue to remain an innovator, investors should remain happy with the company's stock value going forward.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.