Analyst Amit Daryanani expects Apple’s share to grow eight-fold—from 0.5% to 4%—over the next few years.
From a note to clients that landed on my desktop Monday:
All You Need to Know: We think the recent changes to India’s FDIC laws will enable AAPL to sell all their offerings to the Indian consumer without the 20% tariff implication and we expect AAPL to enhance their online and brick-and-motor presence in India over the next few quarters.
Last week, India announced changes to its foreign direct investment laws to allow foreign companies to operate an online store without a brick and motor presence and it lowered local sourcing requirements for foreign companies.
The announcements are part of a push by India to lure foreign companies looking to escape China and both Foxconn and Apple have announced investments in recent days. Transitioning out of China will be challenging, but India remains one of the only replacement options (need large enough population to hire 2M+ workers with churn rate of 50%).
Net/net: We think India opportunity could be an incremental upside driver and assuming AAPL can extend their share from ~0.5% to ~4% over the next few years, it would suggest 12M units and rev/EPS upside of 4.6B/$0.65.
My take: Been down so long in India, 12 million units looks like up to Apple. Besides, <$200 phones may be the biggest share (80%) of the Indian market, per Daryanani, but $500+ phones are the fastest growing (44% vs. 14.5% y/y).