Apple announced the results of their last quarter and we now have a clear image of what’s happening there:
1/ The biggest hit was taken by the iPhone due to the “covid-zero” policy in China. (-8y/y)
Here it is worth mentioning that the company built a state-of-the-art collaboration system with the suppliers and taught them how to run the supply chain in a game where Apple obtained the quality and price and the supplier knowledge and free machinery. With the knowledge the supplier went further to other clients and made money. (there are multiple detailed stories on WSJ, Bloomberg and Financial Times)
Now, Apple suddenly realised that the world is not that flat and geopolitics matters. Hence, moving a part of the production to India and Vietnam, but giving it to the Chinese suppliers who opened business over there. Why? Well, India can compete on advanced manufacturing with China and Vietnam has a criminality problem beside the manufacturing one. However, slow parts of the production are moving to these new countries.
2/ Services +7 y/y – the plan is here to be one day more than 50% and to replace the iPhone
3/ Wearables -8% y/y – since the company doesn’t offer details the explanations maybe is in between: poor sales of both Watch Series 8 (low differentiation to Series 7) and Watch Ultra (1,000 EUR – maybe too high)
Meanwhile, everyone is talking about the iPhone Ultra – an 1,500 to 2,000 EUR phone/computer.
