FundamentalsThis was originally published on news.cmlviz.com
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The headlines will have you believe Apple is dead and other than a handful of institutions like Goldman Sachs, RBC and Capital Market Laboratories (CML), Wall Street is yet again underestimating the demand for Apple's brand. But forget opinions, here is the simplest measure of the truth. We can do it together, and just skip Wall Street's bumbling.
The recently announced iPhone SE is Apple's new "mini iPhone" priced at a mini price of $399, compared to over $600 for its larger phones. While the rest of the world, including Apple, followed the trend to larger phones and phablets, Apple realized there was a substantial demand for a smaller phone.
Before we get into the analysis from Wall Street, here's how you can get ahead of the curve on your own -- you don't need them to tell you their opinions, you have the power to find the facts yourself.
First, we went online Apple's store and right on the front was a push for the iPhone SE:
There it is, the iPhone SE is front and center. Next, we went to the nearest Apple store and tried to order an iPhone SE. Here's what we found:
OUT OF STOCK
The iPhone SE is out of stock -- with shipping times up to 3 weeks. We have done this several times and each time we find the same result. Demand is outstripping supply. Now, if we turn back to Wall Street we can see some of their analysis. First, from RBC in April:
And then there's main stream media -- Apple Insider, which reported on the iPhone SE:
That note was also from the March / April period.
A part of this supply vacuum likely comes from Apple's abrupt pullback warning it gave suppliers ahead of the most recent earnings report. So, to be fair, there is a constraint on supply that Apple has never really seen before, but this is self-created.
Having said that, the iPhone SE has been on a 2-3 week waiting period for the life of the product based on Capital Market Laboratories Professional (CML Pro) research.
WHAT IS NOT REPORTED
Sticking with headlines, we'll read that Apple is getting old -- less relevant to the younger generation and open to a new wave of competition. Well, that turns out to be a false narrative as well. Business Insider tells us that "teenagers are heavy smartphone users — many spend six hours a day on their phones — and Apple's iPhone remains their brand of choice." And then they wrote this:
In general, while smartphone growth has been reported to be in decline, let's not lose the forest for the trees. By 2020, 6 billion people will own a smartphone. Today, there are just 2.6 billion.
Just so we're perfectly clear, that's 130% growth in five-years and it's coming from everywhere.
SMARTPHONE BY COUNTRY
Source: Pew Research
Source: Pew Research
Eventually, every country will see that dark green color, which represents smartphone ownership, reach nearly 90%. With that growth we get another gem for Apple and that is Apple Pay.
APPLE PAY IS EXPLODING
As far as Apple being "just a phone company," how about this fact. Whether mobile payments sound exciting or not, the projection from Bank of America is that total transaction volume will reach $3 trillion by 2022.
Between the iPhone and the iPad, Apple controls 65% market share and even better, straight from Apple's December earnings report:
Yes, the company reported ten times higher growth in six-months. This is a part of the substantial growth in "Apple Services," which has now become the firm's second largest business segment.
iPhone: $32.9 billion
► Services: $6 billion
This is considered recurring revenue, rather than hardware sales -- which is one time revenue. Both CML Pro and Goldman Sachs have published reports on why this makes Apple stock substantially undervalued. But that's another story for another time.
WHY THIS MATTERS
There's so much going on with Apple it's impossible to cover in one report and reading headlines can be misleading. But, to find the 'next Apple,' 'next Google,' or 'next FANG stock,' 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:
That chart plots the growth in 4G usage 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%.
Thanks for reading, friends. The author is long Apple shares in his personal account.