by Marc Bastow | October 22, 2012 1:55 pm
One of the most vivid images from a recent two-week vacation in Italy and England came from Venice, the archipelago-city where the primary mode of transportation besides walking is a boat.
It was there that I watched as an older man navigated his large barge-like, produce-laden flat boat through the Grand Canal, the primary waterway that wanders through and bisects the city. One hand firmly on the rudder, his eyes watched both the boat traffic in front of him and his Apple (NASDAQ:AAPL) iPad affixed firmly on his right side. All the while talking happily on his iPhone.
A mix of the old and the new was never more evident. Even more interesting, however, was the general sense that while Apple products are clearly in evidence, the company has a pretty big image problem in Europe. Plus, the competition, primarily from Samsung and its Galaxy phones, is substantial. U.K.-based Vodafone (NASDAQ:VOD) stores are everywhere, but except for a small store in London, Apple shops are nowhere to be found.
Sure, Apple sells the iPhones, but they’re not nearly as ubiquitous as they are in the States. Moreover, European users view Samsung handsets as having better technology, particularly the screens. And at least a few of the tourists we met from America reported some trouble with their phone and Internet connections.
Of course, you also can’t help but get the feeling that it could be just a European backlash to Corporate America. Whatever the reason, it’s worth looking at Apple’s results in Europe when the company releases earnings on Thursday.
Here’s another observation perhaps worth a look during earnings season: Car sales in Europe, particularly for Ford (NYSE:F) and General Motors (NYSE:GM). A quick scan at Europeans’ cars of choice suggests Detroit’s problems in the region aren’t exaggerated
It’s hard to find a Ford on any side street or motorway, and as for GM, it’s pretty much forget about it. France’s Peugeot (PINK:PEUGY) may be an endangered badge, but people still drive its cars like crazy, and Volkswagen (PINK:VLKAY) remains the car of choice for the masses.
Of course, what grabs the headlines is the eurozone crises, but you’d be hard pressed to find any day-to-day evidence of a crises save for the protest footage from Greece and Spain, and a march of Italian students concerned about cuts at the local high school.
But the problems are real, and perhaps the most insightful analysis came from a gentleman who described Italy’s biggest issue as a population that has too many retired people under 50 receiving government-guaranteed pensions and healthcare, while working second-career jobs that are mostly off the books.
The result? A never-ending cycle of lower revenues and higher costs to the state. And jobs that might be filled by younger people are instead filled through what he called the “black” economy.
As for the political climate, most people are clearly unhappy with their leadership. More interesting, however, was just how much Europeans follow American politics, particularly the upcoming election. A very unscientific poll concludes that most locals are looking for an Obama victory, while most American tourists who want to talk about the election are voting for Romney.
We’ll all soon learn how that turns out, and further down the road, how the European crises plays out. Meantime, there’s no place like home.
Marc Bastow is an Assistant Editor at InvestorPlace.com. As of this writing he is long AAPL.
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