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News just broke that Apple's iPhone has hit 4.6% market share in India's thirty largest cities -- a 130% increase in a matter of months. Here's why that news changes everything and why a secret handshake, that CML Pro broke news about, started what has now become an unstoppable force forward for Apple.
WHAT'S GOING ON
India's smartphone market is now larger than the United States. Here's the smartphone growth via Statista.
So why don't we ever hear about India and iPhones?
It will take and to answer that question. Here's the image:
Apple has essentially no footprint in India.
Here's the sentence: India prevents outside companies from selling products there without a tremendous penalty based on a national law that protects home grown manufacturers.
A tectonic shift began last year with a visit by Apple's CEO Tim Cook and a private meeting with India's Prime Minister. Up until then Apple had been totally shut down in the world's second largest smartphone market because of national rules set by India to prevent outside manufacturers from entering. Suddenly, the earth shook:
Shortly after the meeting we got this news: India has singled out "cutting-edge technology" as a segment that can side-step the 30% local producer rule and Apple has been singled out as "cutting-edge technology." What a coincidence.
A meeting. A law change. Preferential treatment. Now, welcome to 200 million new potential Apple iPhone customers.
HOW APPLE WINS
On March 21st Apple will announce a product called an iPhone SE, which up until now has been just a prototype. Here's what it looks like:
It turns out that this 4 inch iPhone with a metal casing and rip roaring A9 chip speed device is world changing for Apple, becasue it allows the company to enter India with a less expensive but still technologically advanced smartphone.
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RBC Capital Markets analyst Amit Daryanani forecasts 10 million+ units sold for this iPhone SE, which in and of itself would be $0.23 per share in earnings. That number is too low.
Apple's 2% market share in India just rose 130% in a matter of months to 4.6%, and remember, the new iPhone has not been released yet. iPhone 6 holds nearly 20% of the market share in China, and that market has two powerful home grown competitors. Apple is going to dominate India -- a market that is larger than the United States and this prototype iPhone SE is the world changing conduit.
At 20% market share, Apple is looking at 20-30 million units in India alone
Drexel Hamilton is famously known for monitoring Apple suppliers in Taiwan. News just came out that "Apple Suppliers Had a 'Very Good' January" (Source: WSJ).
[the company's "Apple Monitor" supplier group] posted its strongest January since 2008.
That little gem of data has been held back as a secret as well.
FACEBOOK AND GOOGLE
The opportunity is even bigger.
India is Facebook's (FB) second largest market and if the iPhone becomes the smartphone of choice, as it has everywhere else in the world, Facebook will face a stringent challenge as Apple soon unveils its own new social media network and ad blocking to outside apps.
In fact, TechCrunch today penned an article: "Survey says 25 percent of smartphone owners have downloaded ad blockers."
In its latest earnings call, Mark Zuckerberg explicitly noted the risk of ad blocker apps to the Facebook (FB) business since 96% of its revenue comes from ads. Also recall that Twitter (TWTR) has just now made enormous in-roads to India:
Twitter recently struck a partnership deal with India-based chat app – Lookup. Users in the country can now tweet on @lookuplite to get information and also make purchases (and book appointments) from a range of retail services.
Facebook is on alert because of this iPhone 5SE. It now has competition for the first time ever in its second largest market from two different competitors. Alphabet/Google (GOOG, GOOGL) faces the identical threat from Apple's ad blocking software and social media patent as iPhone 5SE proliferates -- recall that 80% of Google's revenue comes from advertising.
WHY THIS MATTERS
Apple is about to turn the world upside down with its entry into India but this is just the beginning of the real shift that’s happening at Apple -- one that even Goldman Sachs revealed as enterprise changing and caused the firm to raise its price target to 60% higher in a year. That would be the single largest gain in market cap in the history of financial markets. Goldman is right.
Apple is only one of CML Pro's precious 'Top Picks.' To find the 'next Apple' or 'next Google' we have to get ahead of the curve. This is what CML Pro does. Our research sits side-by-side with Goldman Sachs, Morgan Stanley and the rest on professional terminals, but we are the anti-institution and break the information advantage the top .1% have.
Each company in our 'Top Picks' is the single winner in an exploding thematic shift like artificial intelligence, Internet of Things, drones, biotech and more. In fact, here are just two of the trends that will radically affect the future that we are ahead of:
The Internet of Things (IoT) market will be measured in trillions of dollars as of next year. CML Pro has named the top two companies that will benefit. Then there's cyber security:
Market correction or not, recession or not, the growth in this area is a near certainty, even if projections come down, this is happening. CML Pro has named the single best cyber security stock to benefit from this theme.
These are just two of the themes we have identified and this is just one of the fantastic reports CML Pro members get along with all the visual tools, the precious few thematic top picks for 2016, research dossiers and alerts. For a limited time we are offering CML Pro at a 90% discount for $10/mo. with a lifetime guaranteed rate. Join Us: Get the most advanced premium research delivered to your inbox along with access to visual tools and data that until now has only been made available to the top 1%.
Thanks for reading, friends.