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Investing Beyond Apple’s iPhone X


The iPhone X was officially launched yesterday, 2 November.
So was Apple’s Q4 results.

 

The iPhone X, released as the iPhone to commemorate 10 years since the first iPhone was released.

Hundreds of people were seen queuing up for the phone’s release outside Apple Stores globally.

For Singapore, the flagship Apple Store located at Orchard Road saw hundreds of enthusiastic buyers queuing for the iPhone.

As iPhone X was released yesterday, so was Apple’s Q4 results.

Its results shows that not only has it been able to turn around market share of iPads and iMacs in China, it has also been increasing its sales significantly.

Apple’s Q4 revenue of $52.6 billion was a double digit increase of 12% from the year-ago quarter. International sales accounted for 62% of the revenue.

According to Tim Cook, CEO of Apple Inc in a recent statement:

“We returned to growth in greater China with unit growth and market share gains for iPhone, iPad and Mac,” Cook said in prepared remarks. “In fact, it was an all-time record quarter for Mac sales in mainland China as well as an all-time high for services revenue.”

Another fact is that iPhones account for more than half of Apple’s revenue, even when it’s one of the world’s most valuable tech companies.

Taking a look at Apple’s (NASDAQ: AAPL) stock performance, it has risen by more than 40% YTD. (at the time of writing, pre-market price of AAPL rose by more than 3% to break $170)

That’s a very impressive performance by a large-cap company. In comparison, the Dow Jones Industrial Average (INDEX: ^DJI) only managed to bag slightly below 20% YTD.

With such a bullish run on Apple’s stock performance, where are the opportunities left for investors, especially for investors in Singapore?

Since the iPhone accounts for a huge amount of Apple’s revenue, we took a deeper look into the manufacturing of the iPhone. It’s widely known that Apple doesn’t produce the hardware of its products by itself but rather, relies on 3rd-party suppliers like Sharp and Samsung.

On Apple’s official website, they have given the entire list of suppliers that they’re working with.

From the supplier’s list, a few companies are SGX-listed stocks. We’ve identified them to include Hi-P International Limited (SGX: H17) and Broadway Industrial Group Limited (SGX: B69).

With such a stellar earnings results from Apple, international demand for its products are at an all time high. Coupled with the release of the iPhone X, and more versions of iPhones slated to be released next year, suppliers will be expected to be working hard to keep up with the strong demand.

Regardless of whether you’re an Apple fanboy or not, Apple’s business is a proven model.

That is what investors should really look at beyond that beautiful iPhone.



Disclaimer: All research reports are of the analysts’ personal opinions and do not in any way reflect InvestingNote’s official opinion. InvestingNote does not issue a buy or sell recommendation on any security, and any research paper published by The Signal Blog is purely for informative purposes. This research is based on current public information, but we do not represent it is accurate or complete, and it should not be relied on as such. The information, opinions, estimates and forecasts contained herein are as of the date hereof and are subject to change without prior notification. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual InvestingNote users. InvestingNote users should consider whether the information in this research is reliable, and suitable for their particular circumstances and, if appropriate, seek professional advice. The price and value of investments referred to in this research and the investment income from them may fluctuate. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments.

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