Apple Inc.

[cyclone]

Apple stock dips after Credit Suisse says iPhone shipments drop 35% in China
* iPhone shipments in China dropped 35.4% in November compared to the same time last year, Credit Suisse analysts say Thursday, despite a slight increase in the Chinese smartphone market at the same time.
* Apple stock is down slightly Thursday.
* The analysts cite the looming Dec. 15 deadline that could see more tariffs imposed on Apple products as part of the ongoing U.S.-China trade war.

William Feuer
PUBLISHED THU, DEC 12 20198:26 AM EST
UPDATED THU, DEC 12 20193:03 PM EST

Chinese consumers are cooling on the iPhone, according to a new report by Credit Suisse analysts.

IPhone shipments in China dropped 35.4% in November compared with the same time last year, the analysts wrote in a note Thursday, despite a slight increase in the Chinese smartphone market at the same time. The analysts said Chinese iPhone sales declined 10.3% year over year in October, making this the second straight month of double-digit percentage drops.

Since the launch of the iPhone 11 family, total shipments in China are down 7.4% compared with last year, the analysts said, adding that “we estimate China iPhone revenue fell by >17.5% y/y over the past three months (Sept-Nov).”

Apple’s stock was down slightly Thursday.

The analysts cited the looming Dec. 15 deadline that could see more tariffs imposed on Apple products as part of the ongoing U.S.-China trade war as more cause for concern. The analysts wrote that a 15% tariff could increase U.S. iPhone costs by almost $70 per unit.

“Our (and we believe investors’) base case continues to factor in a favorable resolution (i.e., no tariffs); however, we think Apple would have a difficult time pushing through tariff-related price increases to U.S. consumers (~35% of CY18 iPhone units, per Gartner) without a commensurate impact on demand.”

The analysts also pointed to aggressive local competition from Chinese manufacturers as a reason for the drop in sales. The analysts’ rating of Apple remains neutral, and they announced a price target of $221 per share in October.

Apple has had a hard time in China recently. In the second quarter of 2019, its shipments declined 14% year over year while its market share dropped to 5.8% from 6.4% in the same period last year, according to market research firm Canalys.

Apple analysts were nonetheless optimistic about the performance of the latest iPhone line in China when it launched. Some of the new iPhone models had wait times in China of two to three weeks in September. Delivery times for devices can give an indication of consumer demand.

Leading Apple analyst Ming-Chi Kuo said in September that he expected Chinese demand for the new iPhones to beat expectations.

“The demand for iPhone 11 in the Chinese market is stronger than that in the U.S. market,” Kuo said at the time.

More details in https://www.cnbc.com/2019/12/12/iphone-s...-says.html

[cyclone]

Apple's iPhone sales in China up 18% in December: government data

Reporting by Josh Horwitz; editing by Jason Neely
JANUARY 9, 2020 / 6:32 PM

SHANGHAI (Reuters) - Sales of Apple Inc’s (AAPL.O) iPhone in China in December jumped more than 18% year on year, government data showed on Thursday.

China is gearing up for the Lunar New Year in late January, a major gift-giving holiday.

Apple shipped roughly 3.2 million phones in China in December, data from the China Academy of Information and Communications Technology and Reuters calculations showed.

That was up from 2.7 million a year earlier.

After a peak period in 2015, iPhone sales in China stagnated due to factors including longer upgrade cycles and competition from Chinese rivals.

Sales of phones from China’s Huawei Technologies Co Ltd have boomed while overseas the company has faced political pressure from Washington over its technology.

In the third quarter of 2019, Huawei accounted for 42% of new phone shipments in China, according to research firm IDC.

Throughout 2019, Apple offered discounts and financing schemes aimed at boosting sales in China.

In the company’s last earnings call, CEO Tim Cook suggested that such initiatives were successful in attracting more Chinese consumers.

More details in https://www.reuters.com/article/us-apple...Z81CP?il=0

[weijian]

Will be interesting to watch this space and see how a promising game upstart challenges Apple's intention to pivot towards recurring earnings

The company behind Fortnite dared Apple to shutter its game on iPhones. Now Apple has gone ahead and sort of done that.

It’s Epic versus Apple in an antitrust battle … royale.

https://www.vox.com/recode/2020/8/13/213...-antitrust

[Wildreamz]

I always find it interesting when people say Apple is just "a cult", or "not a tech company". 

(ex investor)

[Raks]

I've been vested in Apple for years, exactly for its "cult" - a sustainable competitive advantage IMO. Cult and tech are not mutually exclusive.

Look at our Singapore STI's component,  any "cult" level of success in product/corporate branding? The closest thing IMO is SIA, which may invoke not only emotion in customers but possibly in government-link funds. (Not vested in SIA).


"Cult" is a notch higher than successful "societal marketing" which focuses on targeted needs and ultimately cost-performance; with emotion and self-image attached to users. "Cult" is a positive term in marketing context - highest level of brand loyalty and highest level of corporate leadership. 

In my tech theme I go more Phil Fisher. I look for:
i) tech superiority. Vs sunk costs. Tech can move so fast that last movers may have advantage.
ii) Market share. Number of users = number of data = refinement. User experience, tech improves with market share and forms a virtuous cycle. Needless to say issues such as compatibility. Network effect. First mover advantage.
iii) Ecosystem. Need market share to build sub-user base. Music, video, photography, business services...
iv) Cult. If one day the company loses stickiness factors of (ii) and (iii), and possibly (i), would anyone buy the product?

(i) - (iv) are not mutually exclusive with most tech companies have a much smaller (iv) vs. Apple. How many tech offerings are fashionable, or its brand invoke connection, emotion, and self image?
(iv) is a remedy for Christensen's "disruptive innovation". 

Just highlighting the "Cult" side, not discrediting Apple's tech work in hardware (including customizing ARM/Intel chips), and services (ecosystem); and obviously its many first successful product launches.
Apple is surely not "simply" a cult brand - no cult is ever without performances. So world beating features simply good to have for Apple.

And with cult element, Apple has more resilience - it doesn't need to be top technical-performer (expensive) all the time and can even go bad (MacBook keyboard) at times. Older Singaporeans may also remember Creative vs iPod. Creative was superior technically, but doesn't have lifestyle/attitude/shout factor that iPod has. All Mp3 players were functional, and Creative was superior; but only iPod was cool. 

Apple has a profitable iOS ecosystem that has similar traits as "tech" - high profit margin when user base increases.
Its services are more profitable (higher margin) vs its hardware sales. Notwithstanding that, Apple hardware is already notably more profitable vs. Android devices. The business lines of Apple are complementary and synergistic. 

Apple IMO stand out as a tech because it has a "cult" following. Such following will allow Apple to thrive when it past the user-growth phase. 


ARM, on the other hand, IMO, is an example of non-cult. It's selected over Intel because of its cost-performances and flexible business model (which is a Cost-performance criteria for Apple). Not throwing shade at ARM: I cannot see how ARM is chosen because Apple/ users can be impressed by an ARM logo over Intel logo.

[Wildreamz]

Emphasis on "just" a cult (which connotates blind faith/brand loyalty).

There are reasons Apple command a loyal following (building a long-term relationship with customers; not easily abandoning their product, once shipped; commit to software updates; commit to aftermarket support; commit to respecting users, security and privacy; commit to building developer ecosystem; commit to long-term product development roadmap (building ARM-based computing chip competitive with x86 from ground up take years to pull off); etc. etc.). 

Understanding the reasons of their success among customers, is key to understanding if this competitive advantage is durable and will continue into the future.

[cyclone]

Apple plans 30% increase in iPhone production for first half of 2021 - Nikkei

By Reuters Staff
DECEMBER 15, 202012:16 PM

(Reuters) - Apple Inc plans to manufacture up to 96 million iPhones in the first half of 2021, a nearly 30% year-on-year increase, Nikkei reported s.nikkei.com/3mlVbPC on Tuesday.

It has asked suppliers to produce around 95 million to 96 million iPhones, including the latest iPhone 12 range as well as older iPhone 11 and SE, though shortage of key parts could threaten the target, the report said, citing people familiar with the matter.

This would mark a 20% rise from 2019 though the target will be regularly reviewed and revised in response to any changes in consumer demand, according to the report.

The tentative full-year forecast that the iPhone maker shared with its suppliers suggests it plans to make up to 230 million iPhones in 2021, including both old and new models, the report said.

More details in https://www.reuters.com/article/us-apple...SKBN28P0EA

[cyclone]

Exclusive: Apple targets car production by 2024 and eyes 'next level' battery technology - sources

By Stephen Nellis, Norihiko Shirouzu, Paul Lienert
DECEMBER 22, 2020 / 3:43 AM

(Reuters) - Apple Inc is moving forward with self-driving car technology and is targeting 2024 to produce a passenger vehicle that could include its own breakthrough battery technology, people familiar with the matter told Reuters.

The iPhone maker’s automotive efforts, known as Project Titan, have proceeded unevenly since 2014 when it first started to design its own vehicle from scratch. At one point, Apple drew back the effort to focus on software and reassessed its goals. Doug Field, an Apple veteran who had worked at Tesla Inc, returned to oversee the project in 2018 and laid off 190 people from the team in 2019.

Since then, Apple has progressed enough that it now aims to build a vehicle for consumers, two people familiar with the effort said, asking not to be named because Apple’s plans are not public. Apple’s goal of building a personal vehicle for the mass market contrasts with rivals such as Alphabet Inc’s Waymo, which has built robo-taxis to carry passengers for a driverless ride-hailing service.

Central to Apple’s strategy is a new battery design that could “radically” reduce the cost of batteries and increase the vehicle’s range, according to a third person who has seen Apple’s battery design.

Apple declined to comment on its plans or future products.

Making a vehicle represents a supply chain challenge even for Apple, a company with deep pockets that makes hundreds of millions of electronics products each year with parts from around the world, but has never made a car. It took Elon Musk’s Tesla 17 years before it finally turned a sustained profit making cars.

“If there is one company on the planet that has the resources to do that, it’s probably Apple. But at the same time, it’s not a cellphone,” said a person who worked on Project Titan.

More details in https://www.reuters.com/article/us-apple...SKBN28V2PY

[Wildreamz]

Tim Cook: 10 years at Apple.

The best Endgame one can hope for when you invest in a company long-term:

Source: https://twitter.com/asymco/status/143049...20457?s=20

[Wildreamz]

Apple’s Earnings per Share as a trailing 12 mo. average. (Grey bands represent large [>20%] drops in share price).

Source: https://twitter.com/asymco/status/143049...69251?s=20