On December 29th 1999 [Vodaphone] had a market capitalisation of $152bn; Apple’s was $16bn. Today Apple is worth $2.6trn and Vodafone just $24bn, back at levels last seen in 1998 when the mobile ringtone was introduced
Economist
Buffett began buying Apple in the first quarter of 2016.
(The real Magnificent 7 were mercenary killers who protected a Mexican village for money, then for pride.)
S&P 500 is up more than 19% in 2023 including 3.1% in July. The increase marked the fifth consecutive month higher for the blue-chip index and the longest such run since the summer of 2021. Investors bot because inflation was following and growth resilient.
For the first five months of 2023, though, the increase in benchmark indices was driven entirely by Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla: the Magnificent 7 megacap groups. Microsoft and Alphabet, which are juicing up their software with machine learning, are up by around 40%. Nvidia, maker of AI-friendly chips, is up 215%, pushing its market value above US$1trn.
“The giddy optimism around AI doesn’t look like cooling anytime soon.”
Btw, do remember that the S&P 500 has been underperforming. S&P underperforms ex dogs.
Unrelated post: The blogging 7 & Magnificent 7, the movie.
More like Siamese twins, with China being the larger twin.
Which is why Apple is going big in Vietnam, doing stuff in Thailand, and planning to be very big in India.
Even as Apple shifts some final assembly of its products to other countries, it relies on its long Chinese supply chains for components. Making tech gadgetry is a capital-intensive business. No country will have a manufacturing ecosystem like China’s any time soon, says Anshul Gupta of Gartner, a research firm: “There will always be some interdependence across these markets. You cannot just be completely decoupled.”
https://www.economist.com/business/2023/04/20/why-apple-is-betting-big-on-india
Remember that Warren Buffett has a lot of Apple shares.
Earlier this year, when Foxconn’s workers fled the world’s largest iPhone factory in the Chinese city of Zhengzhoum. local governments recruited villagers to restore Foxconn’s iPhone production after staff exodus, And they were looking for workers to fill factories ahead of peak holiday sales season (now).
But all this help wasn’t of much use
Separate unrest at the world’ subsided after the local government lifted a five-day lockdown on Tuesday. Worker protests over Covid restrictions at the Foxconn campus had resulted in violent clashes with police. FT reporters spoke to plant workers who witnessed the chaos. Foxconn is struggling to staff assembly lines at the peak of Apple’s pre-holiday high season, highlighting the vulnerabilities created by a reliance on China’s manufacturing model.
FT’s newsletter
When the Chinese people are angry, the CCP has problems.
When I read,
Apple became the first company to reach a stockmarket value of $3trn. Shares in the iPhone-maker are up by 40% since the start of 2021; the firm now accounts for nearly 7% of the S&P 500. It took Apple 42 years to reach the trillion-dollar mark, in August 2018. It has tripled in value in just over three years.
Economist Expresso
I couldn’t help but think of Warren Buffett.
On 14 December 2021, it was reported
Beat that Temasek, GIC and Ho Ching.
To be fair to him, his investment team initiated the initial purchases. He then decided that they were onto a good thing and kept on doubling up (Or is it doubling down?) repeatedly. HODL.
Apple is upmarket
A survey in US of slightly more than 10,000 consumers said
10 per cent of consumers in the market for a new iPhone were willing to pay $2,000 for a top-range model. A quarter were willing to pay more than $1,800.
Huawei is cheap and cheerful and has in the last few yrs overtaken Samsung.
Samsung is stuck in between. Neither an aspirational brand, nor a cheap, cheerful brand. And btw, it’s QC sucks: And Samsung wants to sell folding phones?.
Maybe because its phones are made in Vietnam: Vietnam: Where yr Samsung HP comes from?
Concerns are expressed in the Financial Times that an iPhone app to help EU citizens in the UK secure residency rights after Brexit will not be ready by the end of October, when Britain is due to leave.
The uncertainty, it says, potentially affects hundreds of thousands of people, who will either have to use the Android app or make a postal application.
The US-China tech war is all about “decoupling”. But Apple is sourcing its iPhone screens from a Chinese state-owned enterprise, according to the Nikkei Asian Review.
Apple is about to decide on whether to add BOE Technology Group, a leading display maker, to its next iPhone procurement list. If BOE passes the test, their organic light emitting displays, or OLED, will be used in two iPhone models to be released next year. If BOE gets the contract, it will mark a breakthrough for China’s industry.
BOE, which supplies the screens for Huawei’s latest phones, is an emerging industry leader. So from this perspective, Apple’s consideration is rational. But political imperatives could intervene as the US ramps up commercial pressure on China to contain its advances in high-tech.
If Apple chooses BOE’s screens, it could begin to challenge Samsung’s supremacy in the display sector. However, the Chinese company remains vulnerable to a potential clampdown from Washington, possibly restricting supplies of crucial materials from US companies such as Corning, 3M and Applied Materials.
Btw, Trump gave Apple the finger when it asked him for exemption for some products. He told them to make them in the USA.
He didn’t know tariffs on Chinese imports hurt Apple but helped Samsung.
US President Donald Trump said he has spoken to Apple’s Chief Executive Tim Cook about the impact of US tariffs on Chinese imports – and how those duties could give an edge to rival Samsung.
Mr Trump said Mr Cook “made a good case” that the tariffs could hurt Apple, given Samsung’s products wouldn’t be subject to the duties.
“I thought he made a very compelling argument, so I’m thinking about it,” said Mr Trump.
The US is due to impose tariffs on an additional $300bn (£246.9bn) worth of Chinese products this year, even after the Trump administration recently said it would delay imposing tariffs on goods such as mobile phones, laptops, video game consoles and computer monitors until 15 December.
Yet more headaches for Grandpa Xi on top of having to deal with his spoiled bastard grandchildren from HK, and an uncouth ang moh kaw (or is it quai low?)
From FT’s Tech Scroll Asia
Apple has sounded out its major suppliers over the cost implications of shifting 15 to 30 per cent of its production capacity from China to south-east Asian countries as it prepares to restructure its supply chain, according to this scoop from the Nikkei Asian Review. Although the shift is yet to happen, the size of Apple’s supply chain in China — and the signal this potential move sends to others — makes this a vital issue.
Key Implications: The concerns of Apple over its exposure to China derive in part from the protracted trade tensions between Washington and Beijing. But even if such tensions are resolved, several sources said there would be “no turning back”. Apple has decided that China’s lower birth rate and higher labour costs add to the risks of overconcentration in one country.
Upshot: Apple’s move heralds what is likely to be a big shift of manufacturing supply chains from China to south-east Asia. Indeed, this is already under way. Foxconn, Pegatron, Wistron, Quanta Computer, Compal Electronics and key Apple suppliers have all been asked to evaluate options outside of China.
Earlier in the week, FT reported that Foxconn said it could help Apple, for example, move iPhone production out of China if necessary. Foxconn told companies worried about the trade war between Beijing and Washington that it can move electronics production for the US market out of China at short notice and said 25% of its total capacity is now outside of China.
Those who buy and use iPhones.
Apple does pretty well charging customers more money for fancier versions of existing products. There is indeed no fool like a fool addicted to the persistent tapping of a blue-lit screen.
FT’s Letter from Lex
We do well in PISA rankings but so what? Got kid like this?
An Ozzie kid who dreams of working for Apple hacked Apple’s systems and
accessed 90 gigabytes worth of files, breaking into the system many times over the course of a year from his suburban home in Melbourne, reports The Age newspaper.
BBC reports
According to The Age, the teen had boasted about his activities in WhatsApp messages. It reports that he had hacked into the firm because he was a huge fan and dreamed of working there.
His defence lawyer said that he had become very well-known in the international hacking community.
Goldman Sachs’s retail arm, i.e. it’s internet bank, is in talks to offer financing for Apple customers, unnamed sources say, NYT Dealbook reported, quoting WSJ.
Well Goldman would like financing Apple’s customers wouldn’t they? iPhone owners are suckers for anything including high cost loans. The top of the range Google and Samsung phones are value for money, while the Chinese models are really great value, if one is not unfortunate enough to get a dud one.
This financing of Apple users is part of its push into mortgages, insurance, and car loans in an attempt to be financier of choice to US consumers.
Dead partners of Goldie vmust be rolling in their graves.
Worse than becoming a consumer financing business: once upon a time, customers needed US$10m to open an account with Goldman. Today they can open an online savings account with the bank with only US$1.
| From NYT Dealbook
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The very notion of using your face as the key to your digital secrets presents some fundamental problems… It’s very hard to hide your face from someone who wants to coerce you to unlock your phone, like a mugger, a customs agent, or a policeman who has just arrested you. In some cases, criminal suspects in the US can invoke the Fifth Amendment protections from self-incrimination to refuse to give up their phone’s passcode. That same protection doesn’t apply to your face.
BBC
OK at least the highest-priced model in Apple’s new iPhone 8 line-up, reports FT.
Apple plans to differeniate its iPhone 8 range the way it differentiates its Macs. Want more and better features? Pay and pay.
Is Apple really ar qua in the sense of wimpy and sissy not the “T” in LGBT?
While Google’s walking the talk on LGBTs (by applying to be alowed to be a sponsor region’s biggest pick-up event of 2017, Apple is silent despite its boss being gay and proud of it.
In the FT, Tim Bradshaw wrote when the EU Commission said Apple owed billions (US$14.5bn ) in taxes: “The damning verdict and huge headline bill from Brussels could tarnish [chief executive] Tim Cook’s efforts to position the company as a defender of civil rights and bastion of social responsibility.”
Double confirm that with the silence here.
Is Apple really ar qua in not walking the talk? What do u think?
As Apple “rages” over its13bn euros tax demand from the European Commission, the US Treasury is warning that the ruling against Apple “could threaten to undermine foreign investment, the business climate in Europe, and the important spirit of economic partnership between the EU and US”.
Earlier this yr NYT Dealbook reported
Why the World Is Drawing Battle Lines Against American Tech Giants. European efforts to rein in the largest American tech companies are only a taste of what countries like Brazil, India and China are likely to do.
It’s peanuts for starters, both fot Buffett and Apple.
According to the Wall Street Journal, Mr Buffett did not make the actual investment himself, meaning the order would have been placed by his stock-picking team Todd Combs and Ted Weschler. The paper says they are willing to invest in areas that Mr Buffett himself wouldn’t.
They are each thought to manage a $9bn portfolio and usually make the smaller investments, while Mr Buffett makes the big bets.
The Apple holding makes Berkshire Hathaway the 56th largest shareholder.
BBC
Apple iPhone, Once a Status Symbol in China, Loses Its Luster The company’s second-quarter earnings show how hard it can be to keep the attention of the country’s fickle and increasingly hard-to-impress consumers.
Carl Icahn Says He Has Sold Stake in Apple Mr. Icahn says he is concerned the Chinese government could make it difficult for Apple to do business in that country.
From NYT Dealbook
Still buying iPhones as if there’s no tomrrow. If only HoHoHo had bot apple instead of Chinese banks. (((((
Apple is becoming a tech company with Chinese characteristics. About 24 percent of the $51.5 billion of sales booked in its latest quarter – and two-thirds of revenue growth over the last year – came from China. Apple’s new iPhone installment plan could bump this up even further. Chief Executive Tim Cook’s bet on the Middle Kingdom is yielding impressive dividends, but carries existential political risks for the $675 billion company.
The iPhone now accounts for 63 percent of Apple sales, and a greater chunk of profit. Investors and observers will have to wait for next quarter to see exactly how well its newest wares are doing. They were only on the market for a slice of the quarter. But Apple’s figures do show its reliance on overseas sales, and in particular China. The company sold $12.5 billion worth of goods in the country, which is nearly double the amount it booked last year. Most of that demand was for its phones.
The number of iPhones it sells in China could grow over the next few years, thanks to a program Apple recently rolled out. Mobile operators in the United States and in some other markets have moved to selling phones through monthly installment plans. Apple has joined them. Customers pay over two years, but can upgrade after one year if they sign a new two-year contract and give their old phone back to Apple. Many of these devices will end up in China.
The country has long been a big market for refurbished phones. Around 40 million iPhones were already on China Mobile’s network before the operator agreed to sell them to users in 2013. Apple can now sell refurbished phones. They are perfect for China, which is a big market for cheaper smartphones.
http://blogs.reuters.com/breakingviews/2015/10/28/apple-a-tech-company-with-chinese-characteristics/
Related article
it’s fanciful to think that the performance of a handful of companies could serve as a reliable guide to the habits of 1.4 billion people. “Bellwether” originally described a sheep which leads the rest of the flock. That’s an image investors should probably avoid.
Another day, another big fall in China.
The services sector supplanted manufacturing a couple of years ago as the biggest part of China’s economy, and that trend has only accelerated this year. The alarm on Friday stemmed from an unexpected fall in the purchasing managers’ index (PMI) for manufacturing sponsored by Caixin, a respected Chinese financial magazine. That gauge has been lilting southward for a while. By contrast, Caixin’s PMI for the services sector jumped to an 11-month high in July.
Taiwan is a place that could be more resilient to the EM gloom says a Fidelty fund mgr. Think high tech exports to the US. Think Apple also.
So is M’sia (think DAP Penang) too. We belong to the MS ecosystem https://atans1.wordpress.com/2013/06/25/missed-smartphone-boom-planners-thinking-about-2025/ not that of Android or Apple.
Related post
Neither is M’sia or SE Asia. It’s Northern Asia. I blogged yonks ago that we are part of the Microsoft ecosystem.
The big concentration on financials is to play the rising Asian middle class theme. A lot of the exposure goes into China banks (not looking good going forward) and StanChart.
Err should have juz bot Apple leh? Look at its price since 2005 when Jobs returned https://sg.finance.yahoo.com/q/bc?s=AAPL&t=my&l=on&z=l&q=l&c= Ho Ching became CEO of Temasek in 2004, and Temasek started buying StanChart in 2006. She should have bot Apple.
Here’s why based on her thinking of riding the expansion of the Asian middle class (Not Italic bits below are my tots, snide comments).
What do two big American and European multinational corporations have in common? Not much on the surface when comparing consumer giant Apple to the FTSE-listed Standard Chartered bank.
However, both have been significantly affected by emerging markets in their first-quarter earnings. And how they’ve been affected is revealing of the way emerging economies have matured, particularly in Asia.
The emerging markets-focused bank, Standard Chartered, reported a big fall in pre-tax profits of more than one-fifth in the first quarter (22% to $1.47bn) as revenues fell by 4% and costs rose by 1%.
By contrast, Apple had a strong quarter where revenues rose by 27% to $58bn, driven by a 40% increase in sales of iPhones. More than 61 million were sold globally, and notably, the biggest market was China for the first time and no longer the US. [Demand from China’s middle classes, iPhone sales leapt 40% to 61.2m units.]
But iPad sales fell sharply by 29%, reflecting a weak spot in their figures. [Apple fixing this introducing new model for Jap aging market. If works in Jap, another big global winner.]
So, it’s a really tale of two emerging markets. [Ho, Ho, Ho]
One side of emerging economies is a concern over their slowdown in growth, which raises risks over loan repayments, not just in Asia but also commodity exporters in Africa and the Middle East.
These are Standard Chartered’s key markets. Indeed, Standard Chartered took a $476m charge on bad loans, which is 80% higher than the first quarter of last year, although loan impairments were lower than in the previous six months.
[Ho, Ho, Ho]
However, there’s also the consumer side of emerging markets to consider.
For Apple, China’s rapidly growing middle class generated an impressive 72% increase in sales of iPhones. And Greater China has even overtaken Europe to become Apple’s second largest market for the first time with revenues rising by 71% in that region to $16.8bn, which accounts for much of Apple’s strong performance. Net profit was a third higher at $13.6bn for the quarter.
So, as emerging markets, particularly in Asia, become middle income countries, companies that sell to those emerging consumers are well-positioned to benefit.
But the period of rapid economic growth, particularly via debt-heavy investment, of key emerging markets is seemingly over. And companies, particularly banks, are liable to struggle as those economies restructure toward being increasingly driven by consumption.
[Ho Ho Ho: so waz Temasek doing to get into the consumption plays? Olam? Asians eating more peanuts?]
http://www.bbc.com/news/business-32495200
My serious point that by focusing so much on financial services (30% of portfolio and not on consumer plays (outside of the Telecoms, Media & Technology sector: 24%), Temasek has for the last few years been betting on a three-legged horse. Other consumer plays are only a subset of Life Sciences, Consumer & Real Estate: 14%)
S’pore isn’t California.
In 1989,Jonathan Ives, now Apple’s designer and Sir Jonathan, left England and made his first trip to Silicon Valley.
“I was just blown away by the optimism and enthusiasm [in California] that provided such a fantastic environment to try and develop new ideas,” …. “It’s very difficult to develop new ideas in the context of cynicism and sarcasm. It makes for good comedy but it’s a horrible way of trying to develop products.” (FT report)
In S’pore we can’t even make good comedy because we don’t do sarcasm, but the place is terribly cynical, so how to develop new ideas?
Managing US$120bn from near Las Vegas
http://www.guardian.co.uk/business/2012/oct/26/apple-investment-manager-braeburn-capital
Came across this link (Remember the German panzers smashed their way thru Western Europe and almost conquered Russia by using the “Indirect Approach”)
But why you may not want to buy Apple http://www.bbc.co.uk/news/technology-19834594. Remember the Germans still lost because they got the basics (the strength of Russia and the US, and the defiance of the British wrong.
So what can it buy? It can even buy Sprint, a US telco: only US$13.6bn. This list explains why a buy would be a inreresting idea at integrating the Apple experience,which is so impt for Apple’s profits.
The funny thing is that even if it buys everything on the list (Twitter, RIM, maker of Blackberry, are on the list suggested), it still has US$20bn in spare cash.
http://www.economist.com/blogs/dailychart/2011/08/apple-and-samsungs-symbiotic-relationship
See how much Apple screws its suppliers, manfacturers
According to Asymco: “If Apple had no revenues, the current cash would sustain operations (SG&A and R&D) for over 7 years or until the middle of 2018.”
“The funds are big enough to place Apple’s CFO office in the top 100 largest fund managers in the world and larger than any hedge fund manager.” More than Temasek and GIC combined, FYI.
Thoughts of a Cynical Investor 