The Stock Behind The iPhone Mania Could Make You Very Rich Long Term Wise
No, it's not Apple Inc, Google Inc, AT & T, Verizon Communiction, Sprint NextTel or Microsoft
July 31, 2010
By Paul S. Tuon
No matter where you are at or go these days without hearing or bumping into somebody who's yammering away on an iPhone. You are on a quite residential street, you hear people talk about iPhone; you are on a busy city street, you hear people talk about iPhone; you are in a restaurant, a shopping store, on a sidewald cafe, you hear people talk about iPhone; you are at work and play, you hear people talk about iPhone and using iPhones.
It seems like iPhones are everywhere nowaday. The iPhone mania is taking the world by storm and it seems no end in sight. As a matter of fact, it's going to be more and more iPhones for years to come.......
Which is why I was so shocked to learn that, according to Gartner Research, Google's Android smartphones considerably outsold the iPhone in the second quarter 2010 -- even though Apple sold 1.3 million units in just 3 days when the iPhone 4 went on sale back in June 2010.
Before I go on, let me explain what an iPhone is (for those people who doesn't know what an iPhone is).
In the old days and even today, traditional phones are analog--meaning non-digital (phones)--not digital phones. The typical analog phones are regular landline phones you find in most residential homes and businesses and their communicarions are transferred by wires connecting through landlines.
Digital phones, on the other hand, transfer their communications by airspace called spectrum. Their communications are transferred through air digitally without involving landlines or wires. It's a wireless transmission.
So digital phones (like the iPhones, Blackberries, Android-based phones) are not being called "digital phones" but rather they are called smartphones because they can do a lot of stuffs beside allowing you to make phone calls. Smartphones allow you to write/check emails, surf the internet, shop online, pay bills online and do countless other things that a normal (non-digital) phone can't. So an iPhone is a smartphone.
Technically the term digital phone originates in the mid 1980's when cellular phone technology was first developed. It was being used to differentiate between the traditional analog phones and the newly developed cellular phones, but immediately (back then and to this day) people prefer to call cellular digital phones simply as cell phones. So cell phones are digital phones since they transmit their communications digitally via airspace called spectrum.
[Back to the point]
As you can see, EVERYONE is making the switch from the old phones to the new phones called smartphones. In fact, worldwide sales soared 50% in the second quarter (2010)-- despite the ongoing global recession.
That's why I thought you might be interested in the following special report, which details everything you need to know about this monster trend -- plus, it reveals a hidden way for you to cash in on the "smartphone" revolution.
We Haven't Seen An Opportunity Like This In 25 Years...since the "cellular telephone" technology was introduced and change the lifestyles of millions.
That cellular phone technology ushers today's and tomorrow's smartphone revolution and can make you very rich if you're in tune with what I'm about to tell you.
Over the past quarter century, cell phones have completely changed our lives. But now a new revolutionary device is rapidly replacing them -- and one publicly traded company is better positioned to profit from this massive shift than all the rest.
It's NOT Apple or AT&T, Verizon or Google. In fact, you've probably never even heard its name.
Yet this behind-the-scenes company is so vital to the "smartphone" revolution that its shares have doubled time and time again since they first hit the market.
And now millions of people everywhere, from Boston to Berlin, are racing to get their hands on the iPhone 4 -- meaning it's only a matter of time before this stock takes off again.
Well, had you invested just $5,000 in this little-known stock back when smartphones first hit the market, today you'd be sitting on nearly $200,000.
Yes, the stock has run up quite nicely since but still relatively cheap considering how frenzy people are embracing the smartphone revolution, suggesting more upside potential in the years to come.
"Upside potential" is an understatement. Consider this:
Famed money manager Gary Kaminsky calls this company "a pure play on wireless growth" and notes that it's "generating tremendous amounts of cash with a very shareholder-friendly focus."
CNBC's Lee Brodie says he likes this company because it's "closely tied to an industry that's poised to explode."
Oppenheimer analyst Timothy Horan says that of the select few companies that operate in this extremely important wireless niche, this one is "not only the biggest but also the best managed."
And apparently he's not the only one who thinks so...
Harvard Business Review recently named this company's longtime leader one of the "Top 100 Best-Performing CEOs in the World."
Nevertheless, you might be wondering if you wouldn't just be better off investing in a well-known giant like Apple, AT&T, or Verizon.
But here's something that you may not know...
Smartphones are just part of the many parts that make the "smartphone ecosystem" successful. There are companies that make cell phones... or even companies (or cell phone carriers) that owned and operated the cellular networks.
If you want to invest in the obvious smartphone play you can invest in cell phone makers like Nokia, Motorola, HTC and countless others. Or you can invest in the smartphone carriers [part of the latter-end ecosystem] like AT & T, Verizon Wireless, Sprint and countless other carriers.
Or instead, you can invest in something far less obvious -- but far more valuable...something that is part of-- and the main backbone of -- the smartphone ecosystem--the mothers' milk of the smartphone ecosystem.
You see, this company doesn't own, license, or lease spectrum -- but it does provide behind-the-scenes infrastructure that is absolutely crucial to the functioning of virtually all cell phone networks...it is the backbone of the smartphone ecosystem.
In order to fully understand exactly why it could double -- or even triple -- your money in the coming years, we need to quickly take a look at what has happened in the cell phone industry over the past decade...
Up until about seven years ago (right around 2002 and 2003), the term "smartphone" meant about as much to most people as "cell phone" did to Alexander Graham Bell back in March 1876.
Over the past 3 years (2008, 2009, 2010), AT & T has seen smartphone traffic soar 5,000%
The point is: there is a technology revolution happening right now and it is called the smartphone revolution.
This revolution has been happening for quite sometime now when Research In Motion developed the BlackBerry, and before long, they started appearing in the hands of every time-strapped businessman in America.
Sensing a golden opportunity, Apple developed the iPhone, which instantly became the No. 1 must-have gadget for everyone from teenagers to professors, hippies to soccer moms.
Nowadays it's highly unlikely you can find someone who doesn't spend all day glued to one of these devices.
In fact, AT & T has seen smartphone traffic jump by more than 5,000% over the past three years -- and it's been a similar story for the other major carriers, too.
Of course, the major advantage that smartphones have over regular cell phones is that you can do just about anything on them -- make video phone calls, check your email, log on to Facebook, surf the Web, do a voice-conference call, even watch videos.
Some analysts are going so far as to predict that mobile devices like smartphones will end up replacing traditional computers altogether. And the stats certainly back that assertion up...
According to a recent report from Morgan Stanley, by 2012 there will be more smartphones sold worldwide than desktop and notebook PCs combined.
To tell you the truth, desktop computers are obsolete now or have been since 2008. Now it's just a matter of time that notebook PCs will follow desktop computers to obsolescence.
And technology expert Ed Sutherland reports that smartphone sales grew by an incredible 50% in the second quarter of this year alone.
As you can imagine, this is putting far greater demands on existing cell phone networks. After all, it's one thing to transmit voices wirelessly and quite another to stream massive amounts of complex data.
Not to mention, more and more people are making the switch to smartphones each and every day.
As a result, companies like AT & T, Verizon, Sprint, and T-Mobile are being forced to spend billions to constantly expand and upgrade their networks.
And right there is our shot to make some serious money!
You see, only a handful of highly specialized companies have the state-of-the-art technology and artful know-how needed to build and maintain the infrastructure that allows these cellular carriers to keep pace with this unprecedented surge in demand.
And this company is the backbone (infrastructure) of the smartphone ecosystem and stands head and shoulders above all the rest!
Thanks to an unprecedented surge in smartphone traffic, demand for cell sites like this one continues to soar.
Currently, it owns and operates roughly 27,000 "cellular transmission sites" around the world, which it leases out to all major cellular carriers (like AT & T, Verizon, Sprint, and T-Mobile) at ever-increasing rates.
And not only is it the largest company of its kind, it's also the most profitable.
Over just the past 12 months, it has cranked out a whopping $630 million in free cash flow -- nearly double that of its closest competitor.
Speaking of which, competition isn't all that much of a concern here.
For one thing, favorable zoning laws in many of the places this company operates give it sole control of large amounts of territory.
For another thing, it sports much higher profit margins and a lower debt-to-capital ratio than does any of its competitors.
And its abundant cash flow allows the company to reinvest in the business as well as expand to new countries and new markets.
Lately there's even been talk about restructuring the company as a Real Estate Investment Trust (REIT) so that it can start returning some of this cash to shareholders.
In fact, in a recent interview on CNBC's Fast Money, the company's CEO confessed that he believes that "dividends will be paid in the next two to three years."
As investment legend Gary Kaminsky pointed out after that interview, there are "very few companies that can grow and return capital to shareholders."
But this is certainly one of them.
So, by now, I imagine you are starting to see why I think this is such an incredible opportunity.
But wait! It gets even better...
It took Apple just 3 days to sell 1.7 million of the iPhone 4. And it's just getting started.
When the iPhone 4 went on sale in the U.S. and four other countries back in June 2010, Apple sold 1.7 million in just 3 days -- making it the most successful product launch in the company's history.
But that's nothing compared to what we'll see going forward...
Because soon, the iPhone 4 will be available in 88 countries around the world.
No wonder technology analyst William Fearnley Jr. is predicting that nearly 37 million iPhones will be sold in 2010, and that at least another 44 million will be sold in 2011.
Of course, this also means competitors will start racing to develop equally sophisticated phones.
In fact, Verizon and Google have already unveiled a major iPhone competitor, the Droid X -- and Andy Rubin, head of Google's mobile business, says that over 160,000 Android phones are being activated per day.
This in turn will put even more stress on the current cellular networks -- and create even more demand for the transmission sites this company builds and operates.
Even so, you might be wondering if it's too late to get invested in this company.
Not at all!
In fact, one of America's most trusted stock-pickers just featured this incredible company in his award-winning financial newsletter.
And he's convinced there has never been a better time to get invested in this company.
But why should you trust him?
Well, for starters, because he's legendary for leading investors to huge winners after all the hotshots on Wall Street have declared it's "too late" to cash in.
For instance, back in 2005, he recommended robotic surgery specialist Intuitive Surgical in the very same newsletter I just mentioned.
At the time, shares were selling for $44.17. One year prior, shares had sold for $17.46, and a year before that they were selling for just $8.68.
You read that right... Intuitive Surgical had risen 500% in the two years before he recommended it -- and that scared lesser investors off.
But this visionary investor recognized that Intuitive Surgical was both "top dog" and "first mover" in a rapidly emerging industry and that it still had plenty of room to run...
As it turns out, he was right on the money!
Shares recently traded as high as $393 -- meaning investors who followed his lead have been able to turn every $10,000 invested into as much as $89,000.
But make no mistake, this wasn't just some sort of lucky break or fluke.
You see, this investor first caught the financial media's attention when he recommended AOL in the summer of 1994 -- after it had quadrupled in just 12 short months.
Of course, the story is the same with AOL... he identified AOL as both a "top dog" and "first mover," and he knew its growth was just getting started -- despite what everyone on Wall Street was saying.
Sure enough, just six short years later, AOL was a 100-bagger -- turning every $10,000 invested into a whopping $1 million -- and transforming this growth investor into a living legend.
And here are just a few more of the incredible investment opportunities he's led investors to recently:
Baidu -- Up 836%
Vertex Pharmaceuticals -- Up 215%
SXC Health Solutions -- Up 206%
MercadoLibre -- Up 322%
Akamai Technologies -- Up 261%
But first, let me quickly tell you what I mean by "top dog" and "first mover" and explain why this company is the epitome of a behind-the-scene sleeper...
A "top dog" is a company that dominates its industry... and a "first mover" is a company with a technology or product so revolutionary that it disrupts an existing industry and creates an entirely new one.
On the rare occasion that you find a company that is both a top dog and a first mover, the chances are pretty good that you've found your next big winner...
Just think of eBay in the online auction market... Amazon in the online retail market... or Netflix in the DVD-rental market [and that legendary investor led his followers (investors) to big gains on all three].
These companies redefined the way business was done, launched entirely new industries, and continue to dominate those industries to this day. And you don't need me to tell you how handsomely they've rewarded shareholders along the way.
This company has many favorable factors going for it...
- a sustainable competitive advantage that can be exploited for years to come (like exclusive rights to highly in-demand cellular transmission sites all around the world)
- strong past price appreciation (like 5,000%+ gains in under a decade)
- excellent management (like a long-standing CEO who top-notch equity analysts and the Harvard Business Review alike have called out as being one of the best in the world)
- strong consumer appeal (like being the top behind-the-scenes provider to one of the world's most in-demand industries)
- And here's the big one.....documented proof that the financial media thinks it's "overvalued" [maybe because the stock has run up over 5,000% in less than a decade].
Recently, I've heard this company's valuation called everything from "frothy" to downright "expensive" (even though shares have pulled back a bit, thanks to the recent market volatility)...
If you take into account this company's potential for blockbuster growth outside the U.S., I think you'll agree that there's never been a better time to buy.
In fact, it's the No. 1 reason to get this wireless winner into your portfolio today...
Earlier I explained that every time a cellular provider like AT&T, Verizon, or Sprint wants to expand its network, this company absolutely rakes it in.
But honestly, when it comes to growth potential, the U.S. is just the tip of the iceberg.
You see, of the 27,000 cell sites this company currently operates, roughly 7,000 are in emerging markets like Brazil, Mexico, and India. To be specific, I'll break the emerging market number down for you: 2,800 towers in Mexico, Brazil and 4,200 towers in India alone and growing [not to mention other parts of the world that this company is targeting, too].
Granted, that's not a very large percentage [for the emerging markets], but get this...
In India, there are over 1 billion people and growing -- and, 500,000 people are signing up for cell phones per day.
In India, over 550 million people already have cell phones -- and another half a million are signing up per day!
Sarah Lacy of TechCrunch reports, "Even in slums where people live on less than $2 per day, everyone has a [cell] phone."
And analysts estimate that in order to keep up with this surge in cell phone use, as many as 150,000 new cellular transmission sites will need to be constructed in the next couple of years in India alone.
As you can imagine, it's a similar story in Mexico and Brazil [and other parts of the world] -- which are both experiencing unprecedented growth in cell phone usage.
And I'm sure you can guess who's in the perfect position to build and maintain these new cell sites...
Of course, given this company's rock-solid balance sheet and ample free cash flow, it's also well-positioned to buy the rights to existing cell sites from companies that aren't in such strong financial positions.
In fact, a just-completed deal will give it control of roughly 4,500 more cell sites in India [if do the math a total of 8,700 cell sites] -- which puts it well on the road to its goal of tripling its presence there within the next year.
As you can see, there will never be a better or an easier way to position yourself to cash in on the smartphone revolution.
So what is this red hot company?
I would love to tell you all about the opportunity to cash in on the smartphone revolution, but it's not fair to our subscribing members who paid annual membership fee just to receive this priviledge. Therefore, this is as far as I'm going to tell you.
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Words of Caution
As always, please use common sense when investing. Investing is risky in any investment or environment and it is strongly advised that you seek investment advisor to help you determine risk and tolerance.
The information presented in this report is believed to be very very reliable, but its accuracy cannot be guaranteed. A 20th century British economist named John Maynard Keynes (1883-1946) once famously said, "When facts change, I change my mind." I add to that (or a 21st century economist named Paul Seng Tuon says), "So should you."
Last But Not Least
I alway like to say that sometimes the most profitable investment you can make is in a no-investment stock!!!!
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