Is Recent News Bullish for Apple Investors?

Chinese contract manufacturer Foxconn is reportedly hiring 100,000 additional employees to assemble the iPhone 6.

Jul 4, 2014 at 12:45PM

A recent report claims that contract manufacturer Foxconn will be hiring an additional 100,000 employees in China, a record number there according to one estimate, to help assemble an updated version of the iconic iPhone, due out in time for the busy holiday shopping season.

If true, the story by the Taiwanese Economic Daily, combined with other supply chain information, indicates that there will be strong demand for the device, which bodes well for Apple (NASDAQ:AAPL) investors. One research company calls the new iPhone a "white hot" opportunity.

The news might be a bit disquieting for shareholders of other smartphone makers such as Samsung (NASDAQOTH:SSNLF) and (NASDAQ:AMZN).

Two sizes fit all
Another rumor suggests that Apple will release two models of the new version, increasing screen sizes to 4.7" and 5.5" to address a growing user preference in the market.

It is not clear which of the phones that Foxconn would produce, as Apple also uses Pegatron to assemble some of its mobile devices. However, Pegatron is reportedly ramping up hiring to handle new iPhone production.

Samsung already offers several phones with a large display, so Apple had a bit of catching up to do on that front. However, iPhones with smaller screens have outsold bigger Galaxy devices so far, and allowed Apple to dominate in both high-end market share and overall industry profits. Apple currently derives more than 50% of its revenue from the iPhone. The new models will most likely continue that success, assuming the trends hold up.

All fired up
Amazon just announced its first foray into phones. The "3D-like" Fire phone is slated to ship this summer. Whether the device can successfully compete against the iPhone, or even the Galaxy lineup, remains to be seen. Amazon is probably selling the device only to direct more traffic to its web site and help grow its top line, which has been increasing at double-digit rates for a long time. It will offer its Amazon Prime service free for one year as an enticement.

If its previous experience in mobile is any guide, Amazon might have a tough time gaining any traction from the new device. The company's Kindle devices have been losing share, and shipments have been declining. But, Apple has been leading, and Samsung has started to grow its presence in tablets. Things probably won't be any different in the crowded smartphone market either, as the Fire phone isn't really anything special (except, maybe, for the Firefly object recognition feature), and the company is getting a very late jump on things.

Fanboys of Apple and Samsung aren't likely to switch to Amazon, so it's really just a two-horse race. 

Foolish conclusion
A report that longtime Apple supplier Foxconn is increasing its workforce ahead of the launch of the next iPhone is very bullish for investors of the Cupertino-based company, which should continue its very successful run in the smartphone industry.

Investors of Samsung may have to be content with the company being just the runner-up in high-end smartphones. Shareholders of the new kid on the block, Amazon, might not see much contribution to returns from the Fire phone.

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!

Mark Morelli owns shares of Apple. The Motley Fool recommends and Apple. The Motley Fool owns shares of and Apple. 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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