Apple Inc. (AAPL) – Three Reasons To Break Into A Big Smile

As I mentioned earlier, China Mobile, with roughly 65% share of the country’s subscriber market (or around 704 million subscribers which also makes it the world’s largest carrier), has around double the number of customers registered with China Unicom (Hong Kong) Limited (ADR) (NYSE:CHU) and China Telecom Corporation Limited (ADR) (NYSE:CHA), two of its rival carriers that offer the iPhone. However, the sad part is that apart from subsidy-related and revenue sharing issues, China Mobile’s proprietary TD-SCDMA network technology is not compatible with the current generation of iPhones.

Enter the iPhone 5s, which is supposed to be a TD-SCDMA compatible variant, thanks to an updated chipset, if recent speculative reports are to be believed. That’ll also open up the doors to 700 million+ subscribers – a big reason to celebrate.

What’s that blinking on your wrist?

A cheaper iPhone or an upgraded version of the existing model may be part of strategic marketing, but it’s the rumored iWatch that’s going to be the innovative aspect. If recent reports are to be believed, Apple is working to develop a wearable computing device similar to a wristwatch that can function like a phone or tablet, but in a limited manner. Some of its functions may include viewing emails, calendar appointments and text messages. After the iPod, iPhone and the iPad, this could be Apple’s next big technology gamble, in its bid to create a whole new wave of ‘fanboys’.

That aside, wearable computing is an area where both Apple and arch rival Google are envisioning big prospects. Google has already come out with the ‘Google Glass’, a spectacle-like computing device that performs smartphone-based functions such as taking photos and recording videos. However, although the Android-powered device is no doubt innovative, it’s still basically a spectacle which some people may have reservations about putting on in public. A watch, on the other hand, is much more wearable and is, in some cases, a fashion accessory, things that might work in favor of Apple’s so-called ‘iWatch’.

It’s all about doing the right things

Having said that, Apple Inc. (NASDAQ:AAPL) still needs to take care of a few things. For starters, it has to be careful about the pricing of a cheaper iPhone, if such a product does come out. Cannibalization of current iPhone models is also another possibility, particularly in the US and other developed regions. At the same time, subsidy and revenue sharing arrangements need to be worked out with China Mobile for the success of the upgraded iPhone version.

As for the iWatch, it’s too early to speculate whether Tim Cook can successfully mix innovation with marketing the way Steve Jobs did. But, on the whole, I think it’s time to believe him when he says, “We’ve got some great stuff coming.”

This is one stock that has more pleasant surprises in store than you think. Time to permit yourself a smile!

The article Apple – Three Reasons To Break Into A Big Smile originally appeared on Fool.com.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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