Hmm, What Is Apple Doing?


#2353

Here’s a post on hacker news that says pretty much what @hanera said


#2354

My concern is not from Qorvo or Japan Display or Luminous, but from Foxconn.

I do not know whether it is trade war impact or apple iphone orders reduction. Here is the news that brought down AAPL yesterday.

iPhone assembler Foxconn intends to slash 20 billion yuan ($2.9 billion) from its costs next year, according to Bloomberg.

Foxconn, which is the primary manufacturer of Apple’s iPhones, predicts that 2019 will be a “very difficult and competitive year,” Bloomberg reported Wednesday, citing an internal company memo.

The company cuts include a 6 billion yuan ($865 billion) reduction in its iPhone-related expenses specifically, Bloomberg noted. It also intends to cut about 10 percent of its non-technical staff and review managers with annual salaries over $150,000.

Its expenses in the past year were about $6.7 billion, according to Bloomberg.

This news follows a Monday report that Foxconn had cut overtime hours typically available for workers after Apple cut production orders for its iPhone XS, XS Max and XR. Earlier this month, Apple hinted that the 2018 models didn’t sell as well as analysts expected immediately after their September release.

Neither Apple nor Foxconn immediately responded to requests for comment.


#2355

Foxconn is more then Apple. This may be the net effect of US bound manufacturing moving out of China to Vietnam, Malaysia, Mexico and other countries. Foxconn is the number one contract manufacturer and almost all their manufacturing is in China. They are getting hit by the trade war.


#2356

Those countries don’t have the scale nor the know how to do anything of that nature.


#2357

Yes, that is the confusion. Foxconn is used by almost all tech-manufacturing US companies in USA.

Normally, companies like AAPL/AMZN will have forecast software and they declare future commitment based on those. The final result will be ± 2%-3% not big time like others are portraying, unless Apple revises guideline again. If they revise/reduce guideline, then news/media is right, it will sink further, otherwise buying AAPL at current price is exceptional opportunity.


#2358

Key difference this time is that Apple itself agrees. They will stop showing iPhone unit sales numbers.


#2359

Correct, I am not going with number of units, but Apple commits 89B-93B, Media/News tells us this will get reduced, that is where my issue.

Even if number of units are low, will apple meet lowest of forecast 89B which is 10% ROIC with current price. Even though Iphone is major product, Apple will still have 100000 in their product base.

Or Will Apple come up with change in forecast in future? This is the key question.

I understand lot of analysts are paid to say negatives/positives, but what will be the truth? This is the key.


#2360

I will spill the beans after Apple quarterly earnings in Feb.


#2361

The use of mobile wallets has been on the rise, with research predicting that the number of mobile-wallet users will reach 450 million by 2020. However, the contactless-payment industry is wholly dominated by Apple, which is predicted to soon account for half of all contactless-payment transactions.

Beyond Apple, many of Amazon’s tech and retail competitors have already adopted mobile-wallet usage, including Samsung, Google, Walmart, and China’s WeChat.


#2362

Amazon should just become a bank. You keep your money in Amazon and in return get Prime membership for free. The ultimate integration play.


#2363

From wild west to highly regulated? Wise?


#2364

Maybe not yet. But eventually yes. Amazon is unique in that it doesn’t shy away from hard “non tech” problems like banking. It’s interesting precisely because it’s highly regulated so it deters other tech players.

Banking, insurance, healthcare. These are all highly regulated areas so very little tech penetration.


#2365

Every cash rich big company will have capital lease as a part of business. Amazon would have such capital lending business. They provide capital to prospective sellers and help them grow with their products. They get interest in turn. This is the way their cash reserve gets better return and also supports their sales channel.


#2366

Going the bank route is old school anyway. Look at GM, GE, etc If AMZN buys a bank, SELL.


#2367

Banking industry equally profitable like tech industry, in fact, better profit margin than Tech. WB holds lot of bank for higher return and better access to company management…etc.


#2368

Max downside is $35-$40. Look like Jil is not able to stomach that :wink:

WB doesn’t run the company. Merely allocating capital to them like us.


#2369

Apple falling all the way to $35?


#2370

Current trading price $175-$180.
Lowest support is $140-$145.
So downside = $175-$180 less $140-$145 = $35-$40


#2371

One day it can go to $35, GE style. :smile:


#2372

Same with Amzn and Fb.