Apple Inc
NASDAQ:AAPL
315.32
-0.90
(-0.28%)
7:59:58 PM EDT: $314.97 -0.35 (-0.11%)
It Turns Out that the iPhone SE is a Winner
Apple Inc. (NASDAQ:AAPL)
Date Published: 7-21-2016Author: Ophir Gottlieb
Preface
It turns out that the Apple Inc. (NASDAQ:AAPL) iPhone SE is looking like a huge winner in the smartphone wars.
STORY
Apple Inc. is going to show its first ever year-over-year decline in iPhone sales. That reality has sunk in and it has kicked Apple Inc. stock price in the teeth. But there is a glimmer of hope for Apple before the launch of the iPhone 7 this September, and it's the iPhone SE.
The iPhone SE is a small screen phone but with amped up technology, making it a sort of hybrid super powered iPhone 5. While iPhone sales have stagnated in 2016, this one gem is moving the needle to upgrade older iPhone owners.
Mac Rumors reported on data that came from Consumer Intelligence Research Partners and UBS analyst Steven Milunovich, and it was rather telling.
In the previous quarter, 16% of iPhone 4s users had upgraded to new devices. But with Apple's introduction of the iPhone SE, which has a small screen and is by far the least expensive iPhone ever, we see that 26% of iPhone 4s owners upgraded to a new iPhone for the current quarter. That's a winner, but hardly the story.
THE BIGGER STORY
While there will be talks of cannibalization by the less expensive Apple Inc. iPhone SE of the iPhone 6s, that's not really the issue and it's also likely overstated. Apple Inc. introduced the SE for two reason. First, to go ahead and recapture upgrade cycles for price sensitive or screen size sensitive iPhone owners as well as non-iPhone owners. But really, the iPhone SE was built to win a revolution.
The revolution we speak of is the move Apple Inc. is making into India, which is now the second largest smartphone market in the world, trailing only behind China. The Indian consumer has less disposable income than the American or Chinese consumer so a less expensive iPhone is needed, especially after the Indian government did not allow Apple Inc. (NASDAQ:AAPL) to sell refurbished iPhones in the country.
With the shattering of the old rules that strangled Apple in India, the iPhone SE is now Apple's conduit to a winner in this enormous market. For the full details on the Apple entree into India, we refer to our prior dossier, Breaking: Apple Has an Enormous Opportunity in India.
The author is long shares of AAPL.
WHY THIS MATTERS
The smartphone revolution has not ended, in fact, it's just beginning. But the handset makers are not the winners, it's the companies that make the chips inside them that will win. Whether it's the revolutionary chip that allows for mobile payments, or the chip that allows for enhanced radio frequency (referred to as 3G and 4G), these are the stocks we must know.
It's identifying trends and companies like this that allows us to find the 'next Apple' or the 'next Google.' 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:
That chart plots the growth in 4G usages worldwide and how it will grow from 330 million people today to nearly 2 billion in five years. This is the lifeblood fueling every IoT and mobile device on the planet and CML Pro has named the single winner that will power this transformation. 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%.