CHICAGO, Nov. 19, 2014 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Apple Inc. (Nasdaq:AAPL-Free Report), Alibaba Group Holding Limited (NYSE:BABA-Free Report), Visa (NYSE:V-Free Report) and MasterCard (NYSE:MA-Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Tuesday's Analyst Blog:
Apple Partners China UnionPay to Ease App Store Payment
On Nov 16, Apple Inc. (Nasdaq:AAPL-Free Report) announced a tie up with China's UnionPay as a mode of payment for App Store customers in China. We believe Apple's strategic decision to collaborate with the Chinese payment system remains concurrent with its plans to penetrate further into one of the fastest-growing ecommerce markets.
However, the news failed to satisfy the market and Apple's stock price fell 19 cents (0.8%) on Monday closing.
The App Store remains one of the rapidly growing revenue drivers for Apple which accounted for $10 billion revenues in 2013. Further, the division in the reported quarter posted revenues of $4.6 billion up 8% year over year. In terms of China sales, App Store is rapidly gaining ground and China represents one of the biggest markets next to Japan. The App store sales remained strong this year and grew almost 20% in the second half of the year.
We believe these tie ups will considerably resolve issues faced by customers while purchasing from the App Store in China. It will simplify the existing payment processing system, which requires a pre-paid bank account and an online banking password.
Simplifying online transactions would not only boost App Store sales in China — Apple's second largest market for app downloads — but also increase the popularity of Apple products in the country, giving it an edge over domestic smartphone makers. Most importantly, the collaboration with China UnionPay will also help Apple promote its newly-launched Apple Pay. Notably, it has been reported that Apple is planning to tie up with e-Commerce giant, Alibaba Group Holding Limited (NYSE:BABA-Free Report) to establish a payment system alliance.
Though the iPhone maker already enjoys a substantial market share, its revenues from the Chinese market was somewhat marred during the fourth quarter of fiscal 2014. While overall revenues increased 12.4% year over year, China's contribution dropped around 3%.
The decline can be partly attributed to competition from domestic smartphones and the delayed launch of iPhone 6 and 6 Plus owing to regulatory hurdles. However, the rapid growth in wireless infrastructure in China offers Apple an opportunity to counter competition given its brand power. Despite a subdued revenue growth, Apple garnered around 14% of its fourth-quarter revenues from this market.
China UnionPay is a popular alternative to Visa (NYSE:V-Free Report) and MasterCard (NYSE:MA-Free Report) in the Chinese market. It enjoys a quasi-monopolistic position in the payment processing business in the country given its extensive network in the urban as well as rural areas. Founded in 2002, the company rapidly expanded in the international market, spreading across 140 countries and has now issued 4.5 billion cards worldwide.
This year, China UnionPay also debuted in Russia in collaboration with some major banks. Notably, Russia signifies an emerging market (1.6 million iPhones sold in 2013).
Apple currently sports a Zacks Rank #1 (Strong Buy).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
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