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Apples Domestic iPhone Opportunities

iPhones in the U.S.

Investors are focusing heavily on Apples ability to sell iPhones in emerging markets. That doesnt mean opportunities in the U.S. are gone.

iPhones in the U.S.Smartphone penetration of all mobile phones is rising.Jan 2013: 55%May 2014: 70%

Source: comScore.

iPhones in the U.S.

Smartphone subscribers within the U.S. continues to rise.Jan 2013: 130 millionMay 2014: 169 million

Source: comScore.

iPhones in the U.S.Tim Cook believes that all mobile phones will become smartphones in the coming years.Within the U.S., that implies that 30% of mobile phone users have yet to buy their first smartphone.Thats over 72 million potential first-time smartphone buyers still in the U.S., before factoring in future growth in the broader mobile phone market.

iPhones in the U.S.Apples share of U.S. smartphone subscribers continues to rise, and iOS has the highest customer loyalty.

Source: comScore.

iPhones in the U.S.Investors can then derive an estimate of Apples domestic installed base.

Source: comScore and authors calculations.

iPhones in the U.S.Apples U.S. installed base increased by 13.4 million from Q1 2013 to Q1 2014.Total iPhone unit sales over that time were 159.8 million. Approximately 30% of units are typically sold in the U.S., or 47.9 million.That means 34.5 million units were replacements or upgrades a recurring revenue source.

iPhones in the U.S.Apple can still target plenty of first-time smartphone buyers in the U.S.Meanwhile, it has consistent recurring revenue from upgrades within its large and growing installed base.

Apples next game-changing product could be just months away. The Mac maker has been secretly developing a new device for entry into an entirely new product category. Theres one hidden component vendor that could benefit from this revolutionary device, which is detailed in this report.