1 More Reason Apple Inc.’s iPhone 6 Will Be Bigger Than You Think

Apple continues to set itself up to smash records when it launches its iPhone 6 later this year.

Jun 2, 2014 at 12:00PM

This week kicks off a second half of the calendar year that could prove transformative for tech giant Apple (NASDAQ:AAPL).

On Monday, Apple will commence its Worldwide Developers Conference in San Francisco with a keynote address that many hope will include some kind of product launch, possibly that of Apple's recently rumored smart home software.

This could be the first of several new product lines that Apple is set to

Tim Cook Iphone

Source: Apple

introduce in the coming months, which could also include an iWatch, a more advanced iteration of its Apple TV, some kind of mobile payments system, and who knows what else. Especially when taken in their sum total, these new products hold the collective potential to fundamentally reshape the world's largest technology company and help usher Apple out of the Steve Jobs era and firmly into the Tim Cook era.

But for all the talk of new multibillion dollar revenue streams, the iPhone remains the main financial engine powering Apple's money-making machine and should remain so for the foreseeable future. And thanks to some important, but largely under the radar, moves Apple has been making behind the scenes, the iPhone 6 could very well be Apple's most important growth driver in the months ahead.

Apple keeps adding carriers
It might be hard to envision exactly how Apple could continue to grow its iPhone shipments with the high-end of the smartphone market seeming saturated, but Apple has more potential growth levers to pull than many investors realize.

In a recent note to investors, Wells Fargo equity research analyst Maynard Um noted that Apple has continued to aggressively grow the number of wireless carriers its parts with to sell its iPhones over the past several months. By his count, Apple has managed to increase its carrier partners from 280 last October to 316 by mid-April, 15% growth in the past 7 months alone. This matters hugely for Apple's iPhone sales growth as its carrier partners are arguably the most important distribution channel Apple has.

Apple's retail operation currently consists of 424 retail stores across only 16 countries and counting. But even in markets where Apple has the greatest concentration of its iconic Apple stores like the United States, it still leans heavily on its carrier partners to generate the bulk of its iPhone sales. For example, in the U.S., Apple is estimated to sell about 15% of its total iPhones from actual Apple-branded stores, whereas a whopping 50% of iPhones sales came from AT&T and Verizon

It's also worth keeping in mind that the overwhelming majority of Apple stores are in the U.S. and that as you venture further into emerging markets the proportion of sales generated through carrier partners skews even higher.

Setting up the iPhone 6
Taken in this context, you start to see how critical distribution channel carrier partnerships are for getting Apple's iPhones into the hands of consumers around the world. For Apple to continue to increase its addressable audience, it will need to keep establishing new relationships with carriers globally.

Thankfully, Apple still has a long way to go in this effort with there being over some 800 total wireless carriers in the world, though differences in size, location, and demographics make some carriers far more viable partners than others..

In a February interview with the Wall Street Journal, Apple CEO Tim Cook recently noted that he hoped to add 50 new wireless carriers as partners last quarter alone, a fact Um's figures suggest never came to fruition. Either way, Cook's statement alone certainly indicates that Apple has no intention of taking its foot off the gas when it comes to adding new wireless carriers to its ranks.

Between its rumored increased screen size and form factor redesign, the expectations for Apple's iPhone 6 are staggering with some research firms calling for 35-40% unit shipment growth. So while Apple's upcoming products will generate much the excitement about new growth opportunities that are headed Apple's way, investors should also understand that Apple's executive teams will be hard at work bolstering this somewhat under appreciated sales funnel, giving Apple investors everywhere one more reason to be very bullish on Apple in the months ahead.

Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

Andrew Tonner owns shares of Apple and Wells Fargo. The Motley Fool recommends Apple and Wells Fargo. The Motley Fool owns shares of Apple and Wells Fargo and has the following options: short June 2014 $50 calls on Wells Fargo and short June 2014 $48 puts on Wells Fargo. 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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.

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