Apple Inc. (NASDAQ:AAPL) stock returned just around 5% last year compared to 26% for the S&P 500. However, the launch of new iPhones and iPads along with the deal with China Mobile is expected to take the stock to its previous all-time highs, says a report from Motley Fool by Ishfaque Faruk. Though Apple shares bounced back towards the end of 2013, at $530 the stock still has a lot of room to grow.
Growing smartphone market a potential opportunity for iOS
Apple Inc. (NASDAQ:AAPL) has gained majorly in the United States and other developed markets, and is further gaining significant ground in these economies. Consumers showed substantial interest in the iPhone 5S that would enable the company to grab more market share due to the better security specs like fingerprint sensor.
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Apple iOS accounts for 41.2% of the total smartphones users at the end of the November whereas Android powered Devices grabbed 51.9%, according to data from comScore. Both Apple and Google Inc (NASDAQ:GOOG) are gaining more users in the United States, dominating the smaller competitors including BlackBerry and Microsoft.
The smartphone market would expand from approximately 1 billion units annually in 2013 to more than 1.7 billion in 2017 globally. Apple iOS, as well as Android will capture a substantial amount of the smartphone market all over the world.
China Mobile deal to help Apple a great deal
Apple Inc. (NASDAQ:AAPL) entered into a deal with China Mobile to sell iPhones in China, which would take forward the company’s iPhone sales in the massive Chinese market. China Mobile has a huge customer base of over 763 million customers that would back the sales of iPhone in China.
Apple gets around 53% of its total revenue from the iPhone, and the deal with China Mobile is expected to increase sales in 2014 and beyond. The iPhone 5S and iPhone 5C will be available on China Mobile within few days. The swelling middle class population in China are a key demographic for iPhone sales in that region.
China Mobile has a customer base of 181 million 3G subscribers, and is building the largest 4G network in the world, which would enhance the sales of iTunes and the App store. Also, the deal with China Mobile would improve the revenue from software and services in 2014. The Cupertino-based firm is also seeing increased sales of other products like iPad and Mac, which will further help Apple Inc. (NASDAQ:AAPL) in the region, and take the stock price higher.
Along with these developments, “the biggest share repurchase in history will certainly help the company’s stock price propel to the $700 mark,” says the author.