In 1997, the word “Smartphone” was first coined to describe an Ericsson phone concept. Now just 15 years later, over half of adult Americans own a smartphone, but most of this explosive growth opportunity started with Apple Inc. (NASDAQ:AAPL)‘s famous iPhone launch in 2007. Those who were quick to jump in investments like smartphone makers Apple Inc. (NASDAQ:AAPL), component makers like QUALCOMM, Inc. (NASDAQ:QCOM), and infrastructure companies like American Tower Corp (NYSE:AMT), have been handsomely rewarded.
But, what if I told you that it’s not too late to invest in the rise of smartphones and other mobile devices like tablet computers? Although it may seem like the ship has sailed now that the United States is becoming saturated, the rest of the world is still out there. What worldwide mobile trends can benefit investment decisions right now?
What we can learn from BlackBerry
Investors were pumped when Research In Motion Ltd (NASDAQ:BBRY) announced a new operating system to go along with the highly anticipated Research In Motion Ltd (NASDAQ:BBRY) Z10. The bulls in their charge were all agreed: these two products were going to impart new life into a struggling company. But now a few months later, the jury is out.
Several independent reports have come out about the BlackBerry Z10 that indicate there is very weak demand for this phone. One report by Detwiler Fenton & Co claims more people return the Z10 than keep it. Research In Motion Ltd (NASDAQ:BBRY) denies this, but we’ll have to wait until the first-quarter earnings release to really know what has happened.
But whether or not the BlackBerry Z10 is in soft demand in the United States, Research In Motion Ltd (NASDAQ:BBRY) still has the rest of the world. The phone was released in India in February. The Z10 rolled out in Venezuela in March, and has continued across South America until most recently arriving in Paraguay just last week.
Looking at smartphone — or tablet — sales from just the United States is a very near-sighted perspective. The Z10 hasn’t been as strong as hoped in America, but globally, the company still has some swagger and this device could score big.
At a hyper press event, Amazon.com, Inc. (NASDAQ:AMZN) released its Kindle Fire tablet to take on Apple Inc. (NASDAQ:AAPL)’s iPad. One of the biggest advantage that the Fire has over the iPad is the price — priced around $300 less than the iPad. In September 2011 at the Kindle Fire launch, CEO Jeff Bezos memorably said “we’re going to sell many millions of these.”
The truth is, we aren’t really sure. Amazon.com, Inc. (NASDAQ:AMZN) doesn’t tell you how many it sold. But estimates for the initial Kindle Fire come in at 5 million devices. Since the initial launch, Amazon has released two other tablets — the Kindle Fire HD and the Kindle Fire HD 8.9″.
Amazon is about to kick Kindle Fire sales into overdrive. Up until now, Kindle HD sales have been mostly in the United States, Japan, and Europe. But on March 23, the company announced it was rolling out the HD into 170 countries.
What this means for Apple and Samsung
Apple Inc. (NASDAQ:AAPL) has been “struggling” worldwide for some time now. The company’s products are high-end, and have high-end prices. While some in the United States have expendable income to “splurge” on a product from Apple Inc. (NASDAQ:AAPL), people in other countries may not have this luxury.
Consider the following data from the International Monetary Fund.
The United States population averages almost $50,000 in purchasing power, while China’s average is just over $9,000 and India’s is just under $4,000. There just isn’t as much money to go around in other countries around the world, making the price of a phone or tablet carries a very relevant statistic.