AAPL Stock: The Next Billion Dollar Opportunity For Apple Inc

Can India be the next growth driver for Apple Inc after China? 

AAPL Stock The Next Billion Dollar Opportunity For Apple Inc

Shares of Cupertino, California-based tech giant, Apple Inc (Nasdaq:AAPL) have been rallying for the past one month, hitting a new all-time high. Apple stock has gained more than 12% since the last earnings report and is up around 18% YTD compared to an 8.6% gain in the Nasdaq Composite (INDX:COMPX). AAPL stock has been buoyed by improving consumer sentiments, better than expected results and the hype around the launch of iPhone 8 later this year. Another factor which has been in news recently and which can provide a billion dollar opportunity for Apple is its increased focus on the emerging markets, especially India.

Slowdown in sales in China is a major headwind.

One of the main challenges facing Apple is the slowdown in its revenue growth. Market saturation in developed countries and its size are the two main obstacles for the iPhone maker's revenue growth. To overcome the problem of saturation in developed markets, especially the United States, Apple has been focusing on China, the world's largest smartphone market. That effort had paid off with China dawning the mantle of Apple's biggest growth driver. However, Apple's China growth came to a crashing halt this year.

According to IDC, China's smartphone market grew 19% YoY. However, as a result of strong competition from local smartphone manufacturers such as Oppo and Vivo, the iPhone's market share declined from 15% in 2015 to 11%. Apple's China sales declined by 12% in Q1 2017, compared to 13% growth in Q1 2016. According to reports, iPhone unit sales declined by 18% in 2016 with total unit sales coming in at 43.8 million. There are some who suggest that a large part of the decline in China sales is due to customers deciding to wait for iPhone 8. However, the company is not taking any chances. To make up for the slowdown in China, the company has renewed its efforts in China's neighbor, India.

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Disclosure: Neither Amigobulls, nor any members of its staff hold positions in any of the stocks discussed in this post. The author may not be a ...

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