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Apple and the 'S' Curve

Stocks in this article: AAPL

But what Apple's last two quarters prove is that some of the received wisdom of the "S" curve may be wrong. The market wasn't the U.S. The market was the world. And a big part of that world is China, where the iPhone is made.

While Android sales have been topping out, Apple has been racing through China's mass market, multiplying sales in "greater China" -- China, Taiwan and Hong Kong -- fivefold. A total of 35.1 million iPhones were sold in the last three months, allowing the company to blow the doors off Street estimates for the second quarter running.

While carriers delivered fewer iPhones to customers in the first quarter of 2012 than the previous quarter total shipments rose dramatically.

Now that the news is out, analysts are jumping back on the "S" curve, insisting that Apple can't keep this going. They see Android and (now) Windows Phones inevitably eating into Apple's share, thanks to value pricing.

They may be disappointed again. Because when you're talking about something in your hand, that connects you to the world, the real market opportunity is bigger than anyone imagined. The global "S" curve is bigger than we think, and that may prove true for other products beyond the iPhone.

At the time of publication, the author was long AAPL.
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