Seeking Alpha
Long/short equity, special situations, momentum, research analyst
Profile| Send Message| ()  

In the case study for my book, The Alpha Hunter, I outlined the key components of this tech revolution poised for takeoff. On page 201 it offers the biggest clue to the future of the revolution:

Universal access to a high speed Internet connection through broadband and wireless capabilities will mark the point where the tech revolution starts to realize its growth potential. By 2009 there were approximately 402 million 3G subscribers connected through their mobile phones. That amounts to only 9.8 percent of mobile phone users worldwide, but the percentage is increasing rapidly. In the countries where 3G was launched first, Japan and South Korea, 3G penetration is over 70 percent.

In the United States we like to think of ourselves as the leaders of tech innovation but the dirty little secret is that Japan is always two years ahead of us. Two years ago Japan showed us that all cellular phones would one day run on a 3G network. What is Japan showing us today? You might want to sit down before you read this next line. Japan is showing us that Apple’s (AAPL) iPhone will command 70% of the 3G market. The exact same market share that the iPod commands in the MP3 market. BusinessWeek is reporting that Tokyo based MM Research Institute Ltd. reported yesterday that iPhone shipments to Japan have more than doubled in the past year, capturing 72 percent of the country's smartphone market.

Much of the reason for the lack of global iPhone enthusiasm began in Japan. In this WSJ article from September 15, 2008, you get a feel for the perception that existed. Many felt that the gadget hungry country was too advanced for the iPhone and expected sales to fall off a cliff after the initial launch.

That is definitely not the case anymore. Investors are taking notice of the action in Japan and are forecasting what will happen in China, what will happen when Apple goes to Verizon (VZ), and what will happen at the June release of iPhone HD. As I explained in this week's video posting, Apple has turned into the top mobile device company in the world. Japan's iPhone news is moving this stock in a major way.

Disclosure: Author holds a long position in AAPL

Source: Japan Reveals Apple's Future