The Next Revolution in Emerging Markets Is a Chinese Smartphone

NEW YORK (TheStreet) -- I was recently in Myanmar, conducting my research for offshore investing opportunities in the emerging markets of the world, when I found something unexpected in the middle of a rainstorm.

In the rainy season, Myanmar is a game of musical chairs: You walk around the city, acutely aware of what's lurking, never quite sure when it will arrive ... when the leaden sky suddenly cracks open and dumps on the city. I didn't have an umbrella that morning on Pansodan Street in the heart of old Rangoon. Instead, I ducked into a KMD Electronics store.

I was not expecting what I found -- the Myanmarese version of an Apple Store. Though more Spartan, it was brightly lit. The staff, dressed in khaki pants and pastel polo shirts of various Easter colors, milled around lighted glass displays designed to be individual boutiques -- the store-within-a-store concept that's all the rage among U.S. retailers. Each boutique catered to a particular brand of phone, almost all of them Chinese.

I pulled up to the counter displaying Oppo phones. A salesman named Kyaw (Chaw) gave me a phone to toy with. It was super slim and jet black, with one of the most vibrant displays I've ever seen.

"These are very good quality," Kyaw said.

"How much?" I asked.

"About $100," he told me.

I was tempted to buy it just so I could say I own a Chinese smartphone.

Americans don't see this corner of the global mobile phone market. We're accustomed to certain brands here at home -- big brands like Apple (AAPL) , Samsung (SSNLF) , Nokia (NOK) , HTC, BlackBerry (BBRY) and few others. But across vast stretches of emerging economies -- and especially frontier economies -- low-cost, full-feature Chinese smartphones are grabbing the public's attention and claiming a large share of local markets.

They represent fabulous investment opportunities.

Just consider that Samsung, a smartphone behemoth that sucks up just about as much oxygen as Apple and its iPhone, told the world last week that its profits plunged by nearly half. The reason: cheap, Chinese smartphones overrunning the telecom industry like a plague of locusts.

Chinese phone-maker Xiaomi has gained such cult-like status that Hugo Barra, a former Google (GOOGL) exec who defected to the Chinese phone maker, likened the company's fan events to "a rock concert." The four-year-old brand is so popular in China that it now controls 14% of the market, outpacing both Apple and Samsung. And it has designs on invading Indonesia, the world's fourth-largest country, as well as India, Brazil, Russia, Thailand and Turkey -- all huge markets.

The privately held company is also eyeing a U.S. initial public offering, possibly next year, that will, I'll wager now, rival the recent Alibaba (BABA) IPO in terms of press coverage and investor demand.

Oppo Electronics, the company behind the phone I played with in Rangoon, is another IPO that will likely come to market, though I'm betting that one lists in Hong Kong.

Either or both will be fabulous stocks to own. Low-cost Chinese smartphones will continue gobbling up global market share because they're full-featured, stylish and inexpensive ... and if you're earning the equivalent of $4 or $5 a day, saving $80 to $100 on a Chinese smartphone vs. a Samsung is nearly a month's worth of wages.

Revolutionary Growth in Emerging Markets

The story of mobile telecom -- the wealth it created in the U.S. and Western Europe -- is well documented. We all know how our mobile phones have improved our lives.

But the changes we've experienced have been evolutionary, at best. It's not like Apple created the phone.

Outside the West, however, in frontier economies such as Myanmar or Kenya, the changes have been revolutionary. People who live in the hinterlands and have literally never before seen a landline phone, much less used one, have suddenly been given a technology-leaping appliance like a smartphone for as little as $80, and they're connecting to an entirely new world of opportunities.

In Kenya, they've created businesses using their phones to order goods from India and China that they then resell in small villages that otherwise would never have access to certain products. In Myanmar, they've created a smartphone app that allows farmers to identify pests in their fields and then learn how to eradicate the bugs, in the process improving crop yield and, ultimately, a family's income level.

These are radical changes that improve lives by increasing prosperity. They're helping build the middle class in corners of the world where wealth and a middle class have never before existed.

And that means they're also radical profit opportunities, as hundreds of millions of new consumers pick up a mobile phone for the first time.

That's why I have my Profit Seeker subscribers invested in mobile-phone technology in the emerging and frontier world. Tap into the companies exploiting these trends while they're still ramping up, and it's not an exaggeration to say that you are tapping into the next Google, the next Microsoft ( MSFT) or the next Apple.

At the time of publication, the author held no positions in any of the stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

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