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The Next Industry Apple Is Disrupting

The following video is part of our "Motley Fool Conversations" series, in which senior technology analyst Eric Bleeker and Chief Technology Officer Jeremy Phillips discuss topics across the investing world.

In today's edition, Eric and Jeremy look at how iMessage is disrupting text messaging. Globally, there were 8 trillion text messages sent last year! While that's an incredible volume of texts, they take up almost no data and are a huge cash cow for wireless carriers. However, as iMessage is showing, applications on smartphones can handle the same functionality as texts, potentially allowing consumers an end-around to costly texting plans. The main barrier to conventional SMS texts being a thing of the past is one company gaining critical mass around a text application. Over time, that barrier doesn't look very strong, which could potentially cause wireless carriers to redo their entire business model.

Wireless carriers like AT&T and Verizon might not be your best profit plays as the mobile revolution unfolds, but that shouldn't stop you from investing in the mobile space. The Motley Fool has just released a free report on mobile named "The Next Trillion Dollar Revolution" that details a hidden component play inside mobile phones that's also absolutely dominating the exploding tech market in China. Inside the report, we not only describe why the mobile revolution will dwarf any other technology revolution seen before it, but we also name the company at the forefront of the trend. Hundreds of thousands have requested access to previous reports, but you can be among the first to access this just-released report by clicking here -- it's free.

Eric Bleeker and Jeremy Phillips have no positions in the stocks mentioned above. The Motley Fool owns shares of Apple and Microsoft. Motley Fool newsletter services recommend Apple and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (3) | Recommend This Article (11)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 01, 2012, at 10:57 AM, accelerando wrote:

    Have been shopping for a new car. All I see (even from Toyota) are feature bloated, ill-designed, over-priced pieces of garbage. A 1998 Toyota Camray is a beautiful, elegant piece of engineering. A 2012 Toyota Highlander is, basically, a rip-off. Far as I can see the auto industry stopped improving cars in the late 90's.

    Imagine Apple bringing its best on the planet engineering and design excellence to the automotive industry. Imagine an iCar. It would be beautiful, supremely functional, with a minimum of 'buttons' and bloat. iCars would be differentiated, one from another, by software -- that is by apps. Can you imagine? Why not? They could get any old auto company to actually build the thing.

    Discloser. I am long aapl. Very long.

  • Report this Comment On February 01, 2012, at 12:25 PM, tzbauknight wrote:

    My wife and I recently ditched our AT&T unlimited $30/mo texting plan in favor of doing it some other way. We've barely noticed. I created a Google Voice number for those friends of mine that don't have iPhones, and I can text them that way if I need to.

    The main problem is that the amount the carriers charge for texting is just absurd when you think about what you're paying for. $30/month? That should pay for a lot more than unlimited numbers of tiny, tiny data transmissions, particularly since I'm already paying extra for data.

    Eventually, some corporate powers will realize that they are not necessary and that gouging people is not a sound business model.

  • Report this Comment On February 02, 2012, at 9:25 PM, MHedgeFundTrader wrote:

    Apple has become a monster cash flow generator. Apple now has the envious problem in that sales of several of its products are going hyperbolic at the same time.

    Apple announced net profits of $13.06 billion, or $13.87 per share, up 11% from the previous year. If the company just maintains that rate for the rest of the year, it will generate $55.48 in earnings, which at the current 11.5 multiple should take the stock up to $638, up 40%. If Apple makes it up to a market multiple, the stock should rise to $721, a gain from here of 58%.

    If the multiple expands to its pre-crash average of 35 X, that would take the stock to a positively nose bleeding $1,941, giving you a 424% return from current levels. Then the company would be worth $2.8 trillion and rank 5th in the world in GDP, more than France, and just behind Germany. Wow!

    It all reinforces my view that Apple shares will reach my long term target of $1,000 sooner than anyone thinks. Long term readers are well aware that I have been making this call for the past two years back when it was trading at a lowly $240. More recent subscribers will also recall that I predicted that Apple would be the top performing technology stock in my 2012 Annual Asset Class Review.

    I'm not saying that you should rush out and load up on stock today. But it might be worth taking a stake on the next wave of fear that strikes the market.

    The Mad Hedge Fund Trader

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