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Jason Schwarz authors the popular Economic Timing investment newsletter. His fundamental and technical research has become a primary resource for hedge funds and individual investors. 

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  • Apple's FaceTime and China: The Perfect Marriage 0 comments
    Jun 7, 2010 7:00 PM | about stocks: AAPL

    Chinese trends show that instant messaging is replacing the more conventional communication methods of text messaging, email, and social networking. "Young Chinese people don't ask one another for email addresses. They ask for QQ numbers" says Kaiser Kuo, group director for digital strategy for Ogilvy & Mather in Beijing.

    The winner in this space has been Tencent Holdings (TCEHF.PK), IM provides users with real-time communication, something that the Chinese people demand from their online experience. As reported by the Wall Street Journal's Juliet Ye, "Those habits have helped turn IM into a social-networking medium in China, despite the availability of proper social-networking sites such as Xiaonei.com." Apple's new video messaging application, FaceTime, could propel this phenomenon to a new level.

    Chinese web surfers don't own their own computers. Only 12 out of every 100 households in Beijing reports computer ownership (paulnoll.com). Instead, they access the web through Internet cafe's where they download video and music to their cellphones.  What would happen if video IM was available on a mobile phone? That's exactly what Apple CEO Steve Jobs is ready to deliver to the Chinese people; welcome to the era of FaceTime.  

    Steve Jobs went out on a limb and declared this technology will change everything...all over again.  The possibility of Apple being able to bring mobile video chatting to the masses is yet another reason to own the stock.  Add this upgraded iPhone to the list of iPad, iAds, and the future devices like Apple TV that will further leverage the success of the App Store as reasons to buy and hold Apple stock.  The cheaper price of the new iPhone at China Unicom later this year will cause a buying wave similar to what we witnessed in Japan.  The Apple China bonanza is just beginning.   

    Disclosure: long aapl
    Stocks: AAPL
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