Next Catalyst for AAPL Stock: Overseas Apple Watch Sales

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Apple Inc. (NASDAQ:AAPL) stock, despite roaring 62% higher in the past year alone, still has room to run as the highly anticipated Apple Watch prepares to hit shelves in April.

aapl stock price overseas apple watch salesWe know that Apple Watch will be a hit in the Americas, by far AAPL’s largest geographical market. But what will demand for the high-end wearable look like abroad? Overseas Apple Watch sales should be the single-most important catalyst for the AAPL stock price in 2015.

And I think they’ll be fantastic.

An International Hit in the Making

Unlike Android, the mobile operating system from Google Inc. (NASDAQ:GOOG, NASDAQ:GOOGL), AAPL is becoming increasingly popular in China, a country CEO Tim Cook has long predicted would become Apple’s single largest market.

Apple’s numbers said as much last quarter, when revenue in Greater China grew by an incredible 70% year-over-year — the fastest growth seen in any operating segment — to $16.1 billion. If there’s one problem with China for AAPL, it’s the pervasive and unrepentant counterfeit products that have plagued the country for years.

Interestingly enough, though, sales of fake Apple Watches — which are already hitting the streets — bode extremely well for AAPL stock. International Business Times argues that mass-counterfeiting is a reflection of high local demand:

“But just like the iPhone 6, the proliferation of Apple Watch fakes is a good omen for Apple. Rather than hurting sales, counterfeiting is one of the most reliable indicators of Chinese demand for a product. Apple’s iPhone 6 was a prime example of that: Sales of fake devices gave way to blockbuster sales of real ones.”

China clearly loves AAPL products. It also loves gold, and with the highest-dollar products in the Apple Watch line — the Apple Watch Edition — lined with 18-karat gold and retailing for between $10,000 and $17,000, don’t be surprised if AAPL makes a fortune on the Watch in China.

While China alone could help stoke another rally in AAPL stock, it isn’t the only overseas market investors should keep their eyes on.

Europe was actually AAPL’s second-largest market last quarter, barely edging out China. Of course, the cratering Euro/U.S. dollar exchange rate — which was 1.39 just over 10 months ago and sits at 1.06 today — won’t be favorable for AAPL when it converts its European sales into dollars.

Right? Well, yes and no.

A stronger dollar won’t help when Apple reports European sales, that much is true. But AAPL is resilient, and it won’t let a few pesky exchange rate fluctuations crush overseas sales.

When currencies move in unfavorable ways for AAPL, it simply raises the price in those countries. Consider 15-inch MacBook Pro prices in France, which Apple raised by 225 euros this week to 2249 euros, according to appleinsider.com.

With pent-up demand in China and the willingness to tweak product prices at will, AAPL stock looks like a strong buy ahead of the Apple Watch launch on April 24.

As of this writing John Divine owns shares of AAPL stock, GOOG stock, and GOOGL stock. You can follow him on Twitter at @divinebizkid or email him at editor@investorplace.com.

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Article printed from InvestorPlace Media, https://investorplace.com/2015/03/aapl-stock-price-overseas-apple-watch-sales/.

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