India Could Change Apple (AAPL) Sentiment - Chowdhry

May 17, 2016 10:13 AM EDT
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Global Equities Research analyst Trip Chowdhry said India could change the sentiment in Apple (NASDAQ: AAPL) stock. He views India as very under-penetrated for Apple with only ~$1 billion in revenues FY 2015.

He highlighted:

  • Tim Cook is landing in Mumbai tonight at mid-night - He is accompanied by 4 other executives, including COO Jeff Williams
  • Tim Cook will be visiting Mumbai, Hydrabad and then Delhi....He will be in India for about one week
  • Expectations are that Apple may make similar kind of Investments in India, as it did in China:
    • To setup a retail presence in India, any MNC (Multi-National-Company), will need to be manufacturing at least 51% of the product in India
    • Indian PM has set up "Make-In-India" program and when the PM Modi was in Silicon Valley last September, he met Tim Cook, and invited him to India
    • Foxconn has purchased 1,200 acre land in the state of Maharastra (Mumbai is capital of Maharastra) to make iPhones in India
    • Expectations are that within next 18 months some iPhone will be manufactured in India
  • Because of the above, it is very likely that Apple will be allowed to own-and-opertate their own Apple Stores in India
  • Tim Cook is expected to meet Executives from all major Indian Telecoms - Including: Reliance and Bharti Airtel
  • In Hydrabad, Tim Cook is expected to meet the State Chief Minister (Chief Minister is like State Governor in US)
    • Apple is creating a 1 million sq-ft development center in Hydrabad
  • The final stop is Delhi, where Tim Cook will meet Indian Prime Minister Modi
  • China and India can provide the much needed Organic growth for Apple - benefiting from both Organic Population Growth, and low iPhone penetration
  • Tim Cook's next visit, after China and India should be Africa - as the countinent dynamics in Africa is similar to China and India (more on Apple's Africa Opportunity in detailed report later)
  • We will continue to monitor Apple's Business and provide incremental updates and insights as and when we get

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