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Investors Business Daily

Apple Bets On Growth In India With Retail, Manufacturing Expansion

Consumer electronics giant Apple is betting that India will become its next big growth market, as the iPhone maker plans to open its first two retail stores in the country this week. Meanwhile, sales growth in India could provide a catalyst for Apple stock, a Wall Street analyst says.

The opening of Apple stores in Mumbai and Delhi "marks a significant strategic move" for the company, Wedbush Securities analyst Daniel Ives said in a note to clients Monday.

India currently accounts for less than 2% of Apple's total revenue, Ives said. Apple has had only a "minimal presence" in the world's most populous country. India recently surpassed China in population by some estimates.

"Apple is now aggressively looking at India from both a production and retail expansion over the coming years," Ives said. It could ramp annual revenue from today's $6 billion to $20 billion by 2025, he said.

Apple Stock On Tech Leaders List

South Korea-based Samsung and Chinese firms Oppo, Vivo and Xiaomi are the biggest smartphone vendors in India now. But Apple looks to take market share with its retail expansion in India.

"While (Apple's) market share in India is sub-10% today, we believe Apple through its unmatched marketing and brand presence will be able to turn India into an incremental growth catalyst," Ives said.

Meanwhile, Apple is ramping up its manufacturing operations in India through production partners Foxconn and Pegatron.

Ives rates Apple stock as outperform, or buy, with a price target of 205. On the stock market today, Apple stock rose 2 cents to close at 165.23.

AAPL stock is on the IBD Tech Leaders list. It has an IBD Composite Rating of 94 out of 99, according to IBD Stock Checkup.

India Could Be Larger Market Than China

CFRA Research analyst Angelo Zino on Monday reiterated his buy rating for Apple stock on the India news.

"We view India as a similar opportunity to China 15 years ago," Zino said in a note to clients. "India could grow to a size beyond China over the next decade."

In other news, Apple on Monday launched its Apple Card savings account with a 4.15% annual percentage yield. The account has no fees, no minimum deposits and no minimum balance requirements, Apple said in a news release. Apple Card users can set up and manage their savings account from the Wallet app on their iPhones.

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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