Shares of Apple, Inc. (AAPL) have climbed more than 7% since plummeting to a 2015 low of $104.63 on Jan. 6.
Which means investors who bailed on AAPL stock fearing the shares were heading back below the $100 mark are deservedly kicking themselves.
But it’s not too late to correct that mistake, if you’ve read reports from research firms Kantar Worldpanel ComTech and IDC, as well as several Wall Street analysts. The former thinks Apple’s products will ascend further at the expensive of hated rivals Google Inc (GOOGL) and Samsung (SSNLF), while the latter predict that AAPL stock will skyrocket in the near term.
Global Sales Dominance, Market Share Gains for iOS Over Android
Last week’s smartphone survey data by released by Kantar Worldpanel affirmed that the sales momentum AAPL has gained since launching its iPhone 6 and 6 Plus models last September hasn’t died down. The report was enough to send AAPL stock surging 4% last Wednesday.
According to the data, both phone models are on a global sales tear, sparking a surge in iOS smartphone user share in every country the phone was available, except one.
Apple gained 4.3 percentage points in platform share in November, jumping to 47.4% from 43.1% in October, Kantar said. Meanwhile, Google’s Android — the most widely used platform in the world — saw its U.S. platform share fall 2 percentage points, from 50.4% to 48.4% — the first time GOOGL has seen its U.S. share slip since September 2013.
That’s also important because its means GOOGL’s Android now leads AAPL’s iOS by a mere 1 percentage point. But more on that later.
Part of the reason for Google’s struggle has to do with Samsung, the largest distributor of Android and Google’s largest smartphone partner. The Korean electronics giant has seen its sales decline the past couple of years, and the company suffered a 60% decline in 2014 third-quarter profits. Comments from the company indicate that Samsung’s struggles may continue for several more quarters — not good for GOOGL or its stock, which is already down around 7% year to date.
To that end, I suspect that as you’re reading this, AAPL has already surpassed GOOGL in U.S. platform share.
Investors should know how Kantar’s reports are done. Kantar surveys consumers in all of the countries that it tracks smartphone ownership. While Kantar does release its findings every month, the data also is compiled on a three-month rolling average — so, for instance, the most recent data uses survey results from September through November. Thus, that data doesn’t include the all-important Christmas shopping period, which could make a huge difference in U.S. share.
But the U.S. is only one of several countries where GOOGL is losing ground.
In China, the world’s largest smartphone market, AAPL enjoyed gains of 2.4 percentage points for iOS, while GOOGL suffered a 2.5-percentage-point drop in Android. And this pattern was mirrored in areas like Italy and the U.K., where iOS gained 3 percentage points and 3.5 percentage points, respectively. Android, on the other hand, lost a respective 2.6 percentage points and 2.2 percentage points in both countries.
The China Boom is Coming in 2015
That Apple has gained market share in China is important for several reasons. Not the least of which is that China has a population of 1.4 billion people. And research firm IDC predicts a lot of them will be carrying smartphones in 2015. IDC predicts that nearly 500 million smartphones will be sold this year alone — three times the number of smartphones IDC expects will be sold in the U.S. In other words, Apple is gaining market share in a country that will account for one-third of this year’s global smartphone sales.
All told, IDC predicts smartphone and tablet spending will reach a record $484 billion this year, accounting for roughly 40% of all IT growth. IDC also says phablet momentum will accelerate, accounting for 18% of smartphones sold — a year-over-year jump of 7 percentage points.
So now investors know both what has propelled AAPL stock 10% over the past three months, as well as what could keep buoying Apple for years to come.
Where’s Apple Stock Heading?
Wall Street analyst have been bold with their predictions. On Monday, while citing December sales momentum, JMP Securities reiterated its “market outperform” rating and $150 price target on AAPL stock. from current levels of around $110, JPM projects Apple to gain more than 36% in the next 12 months.
Monday, while citing Apple’s presence at the Consumer Electronic Show, Cantor Fitzgerald, which rates AAPL stock as a “buy,” also reiterated its $143 price target, suggesting gains of 30%.
Apple’s presence at CES was “as strong as ever this year,” the analyst said.
In short, Wall Street and research firms around the globe, are expecting a monster quarter when AAPL reports fiscal first-quarter results on Jan. 27. With AAPL stock still down more than 8% from its all-time, split-adjusted high of $119.75 reached in December, now’s still a good time to buy — especially because AAPL stock has a tendency to run up ahead of earnings.
Expect shares to challenge all-time highs by the end of the month.
As of this writing, Richard Saintvilus was long AAPL.
