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With Apple's stock up 25 percent since its multiyear lows in May, Jim Cramer has heard various rumors about why Apple has suddenly come roaring back.
There is one important piece of the puzzle that he thinks Wall Street has mostly ignored that explains the bounce.
Apple's chief rival, Samsung, was caught in a debacle for its Galaxy Note 7 phones, after it was discovered that the batteries could overheat and cause the phone to explode. Samsung's newest smartphone has now been recalled in the U.S., and the Federal Aviation Administration issued a warning as a potential safety hazard.
"This opens the door for Apple to take back a potentially enormous amount of market share," the host of CNBC's "Mad Money" said.
For customers who want a high-end smartphone, the main choices are an Apple iPhone or Samsung Galaxy. And now that Samsung's phones have the possibility to explode, it is this dynamic that Cramer thinks is helping to fuel Apple's stock higher. He was inspired by Jack Mohr from TheStreet to take a closer look at the Apple-Samsung dynamic.
"Considering the damage it has done to Samsung's brand, I bet there could be a lot more upside here," Cramer said.
South Korean electronics conglomerate Samsung has been nipping at Apple's heels for quite some time. Finally in the second quarter, it seemed that it was finally catching up when Samsung's market share increased to 35 percent while Apple's dropped more than 9 percentage points to 50 percent.
In an effort to get ahead, Samsung expedited the launch of the Galaxy Note 7 and shortened its release date by 10 days and added 10 new features, while dismissing concerns from suppliers that it could cause problems. The smartphones came out with generally positive reviews in August, but just two weeks later, Samsung issued a global recall after discovering instances where the phone caught on fire while charging.
Thus, because Samsung rushed to release its new product, it sacrificed safety for more speed, features and processing power, Cramer said.
Unlike Samsung, Apple is willing to take its time by rolling out new features over time. It improves the iPhone methodically, one iteration at a time.
Even more important, Apple now has an opportunity to take market share right now, Cramer said. The Samsung Galaxy was the only high-end smartphone that ever came close to the iPhone. Cramer believes that a significant amount of Samsung users will switch to Apple.
"You may read about how few people ever switch smartphone allegiances, but I believe this is a game-changer," Cramer said.
Apple's iPhone 7 customers derive from three places: existing Apple users that upgrade, regular phone users that switch to a smartphone, and from competitors like Samsung. Cramer thinks the first group won't change, but the users who migrate to a smartphone could go with Apple in a big way.
Cramer always tells investors that competition is the enemy to profits. Now that Cramer says Apple's main smartphone rival has basically taken itself out of the competition, he now expects the iPhone 7 to be the best-selling iteration yet.
Ultimately, Samsung's smartphone debacle didn't come out of nowhere, Cramer said. The company got too ambitious in an effort to kick Apple while it was down. Instead, Samsung's customers and brand have suffered, and it no longer has a product that can compete with the new iPhone.
"Once again, Apple's patience pays off; still one more reason why I say you should own this stock, not trade it."
Disclosure: Jim Cramer's charitable trust owned shares of Apple when this story was published.