AppleAAPL$170.19Buy
AMDAMD$100.61Buy
TuSimple HoldingsTSP10,76 $
Apple wins Oscars and accelerates inflation in the services sector. AMD is trying to hit Intel there, where can. Self-driving trucks enter the labor market.
Disclaimer: when we talk about, that something has grown, we mean a comparison with the same quarter a year earlier. Since all issuers are from the USA, then all results in dollars. When creating the material, sources were used, inaccessible to users from the Russian Federation. We hope, Do you know, what to do.
New Hope: slow change in Apple's business
Over the last few weeks in the life of tech giant Apple (NASDAQ: AAPL) there have been a number of significant changes, which should be taken into account as its shareholders, and just outsiders.
Subscriptions. The company is now working on introducing a paid subscription to its devices.. It is hard to say, exactly how it will look. But very likely, that this plan will operate on the same model, What is car leasing: in fact, the same loan, but cheaper and more flexible.
Supposed, that different types of devices will have different subscription plans. Subscription start will occur at the earliest at the end 2022, but the idea itself can be wrapped up in general, since now the company also continues to experiment with installment.
In 2015, the company launched an iPhone upgrade program.: through a partner financial institution, users could pay the cost of the iPhone for 24 months and change it to a new model every 12 Months. The company also allows Apple Card users to pay in installments the cost of their purchases of Apple products.. Payment for tablets and laptops can be stretched for 12 Months, and watches and smartphones 24 months.
Considering the hype around the installment plan, artificially inflated in Western countries by startups like Affirm, i would expect, that the company will play with installments for a long time and, may be, even prefer it to a subscription program.
By the way, many large companies have already started experimenting with subscriptions. You can recall the infamous American manufacturer of exercise equipment Peloton: he is now testing the ability to share his bikes and training programs as part of a monthly subscription from 60 to 100 $ per month.
The American airline Alaska Air Group is also testing a subscription in its business.. The potential benefits of introducing device subscriptions are really great: Apple could start capturing market share from cheaper Android and Xiaomi. If a subscription to her devices will cost relatively moderate money, then its goods will be in demand and all, who does not buy her smartphones because of the exorbitant price, will take her smartphones by subscription. Furthermore, this will allow Apple to count on a more or less stable inflow of money.
The risks are also great.: iron is not the same, what are cloud services, it may not be returned and the company will lose money. Understandably, that these risks are especially high in the countries of Asia and Africa, where Apple is currently weak. And to collect smartphones through collectors in these areas will, certainly, extremely costly.
Decreased production of devices. The company reduced the volume of orders for the production of iPhone SE model by 20% - this is approximately 2-3 million pieces - due to well-known events in Eastern Europe. Moreover, an important point in making a decision for the company was a drop in demand.
The company also plans to reduce orders for the production of AirPods by 10 million by the end of the year for the same reasons.. This amounts to approximately 10% of the total number of headphones sold annually.
The company also reduced the purchase price of old iPhones under the exchange program - higher prices for older models can be found on marketplaces like eBay. Usually, the higher the price of buying old iPhones in Apple stores, the more incentives for smartphone users to come and exchange them with a surcharge.
Among Apple smartphone users, 25% have older models - iPhone 8 or even older. This, certainly, very large potential audience for buying new iPhones.
Some analysts consider, that the decline in exchange prices indicates that, that Apple is not worried about the demand for new iPhones and this is an indicator that, that everything is good in her business. But I'm not so optimistic: against the backdrop of news about the decline in device production, it seems to me, that Apple is just cutting costs.
This is very bad news for all her suppliers.. In particular, for Qorvo, Broadcom, Qualcomm и Skyworks Solutions.
"Oscar". Movie streaming service Apple TV + «CODA: A Child of Deaf Parents won three Oscars at the last Academy of Motion Picture Arts and Sciences Film Awards. What matters is, that the film received the main award - "Best Film".
In my opinion, this can bring a lot of new subscribers to the company's streaming service for a number of reasons.
Firstly, this can attract a lot of talented filmmakers to her studio. In this environment, the Oscars are still considered a very important medal - much like a CFA diploma among financial analysts.. And in theory, these authors can greatly improve the quality of Apple-produced content., which will allow, in its turn, attract a lot of new subscribers.
It's not so important here, that "CODA" is not a very commercially attractive product. The main thing is a professionally staged film with difficult production decisions., which means, its director, Shan Hader, will quite cope with some comic book movie. By the way,, there are many talented directors like Gregory Hoblit and Nicole Cassel on television “in honorary exile”.
Secondly, let the number of views of the Oscars plummet, it's still a big event with over 10 million viewers. Not taxi drivers are watching, quite a solvent audience. Often - left-liberal views and with money. Relatively speaking, readers of the New York Times. See, will the company's victory at the Oscars lead to an influx of paying subscribers. But, it seems to me, receiving an award increases the chances of this.
In sum, all three news indicate that, that the company has not yet abandoned its plans to move into the service sector. She has 785 million paying subscribers across all her services.: Music, TV+, Arcade, news and others. This is 165 million more, than a year ago. Logically, that the company wants to further develop this segment, increasing the audience of paid subscribers and selling them more and more of their services.
But this path will be thorny: US court orders Apple to allow third-party app developers to make in-app purchases that bypass Apple's payment system. And that means, that the most marginal way is "to own the marketplace, receive a commission and do nothing” for the company is gradually closed. She will have to spend a lot of money on developing her own services., which will not have a very good effect on its accounting and profit indicators. Still, the devices make up the majority of the company's revenue., and this is the area, where the company is strong.
Apple has a lot of money, and she can afford to spend generously on experiments. This threatens the entire economy with an increase in wages in the field of content production., and inflating the cost of various startups. So,, Apple's current and potential competitors in the services market should prepare to compete with the Apple company for employees, content and audience.
road warriors: how self-driving trucks could destroy hundreds of thousands of jobs
American researchers from Carnegie University and the University of Michigan published a study Impact of automation on long haul trucking operator-hours in the United States, dedicated to, how self-driving trucks will affect the US job market. Here's what you can find out from there:
- self-driving trucks can perform 94% all long haul shipments in the USA;
- depending on the scale of the reception of self-driving trucks, the labor market for drivers and operators in this area will suffer: there may be no need for a very, very large number of human workers - ranging from 30 up to 500 thousand people.
Research is very interesting, and I advise everyone to read it. For investors, it is relevant for two reasons..
Firstly, it shows great potential for the implementation of this technology, which will be a great joy for companies like TuSimple (NASDAQ: TSP).
Secondly, it allows us to predict major socio-economic upheavals, which may occur in the event, if there is mass unemployment, caused by robotization of labor. Unlikely, that all these drivers who have lost the opportunity to earn money will just sit and watch, how they are replaced by algorithms.
In this regard, people, decision makers, can "tighten the wick" and slow down the automation of labor, to avoid serious shocks. Basically, this is not fatal: automation will still occur, just not as strong. So TuSimple and others like her will still be able to make good money - albeit not immediately.
head in the clouds: AMD buys Pensando
AMD Semiconductor Colossus (NASDAQ: AMD) announced the purchase of private cloud company Pensando.
Here's what investors need to know:
- purchase price - $ 1.9 billion;
- Pensando is a cloud company, providing a platform and software for various computing solutions. Her clients include Goldman Sachs., IBM, Microsoft и Oracle;
- the deal will close sometime in the second half of this year;
- I did not find anything about the financial performance and profitability of the company. Single number - annual revenue, it is 110 million. Although this is not accurate. But if the company really sells its solutions for such an amount every year, then the fact, that AMD paid more than 18 its annual earnings, - extremely generous deal.
These AMD movements are connected with the plans of the company's management to compete with Intel in the field of creating chips for data centers.: to date, AMD's share in this market has decreased to 1% and it is trying to correct this state of affairs. After all, the growing need for computing in the corporate sector makes data centers one of the highest marginal and promising specializations in the semiconductor market..
Well,, the plan is actually not the worst and in some ways even logical. Unlike Intel, AMD does not have its own production: they make chips for her, outsourcers test and assemble components from them, and, given the market situation, attempts to develop their own production will cost the company a pretty penny. After all, all the major players are spending huge amounts of money to expand their production capacities., which leads to higher prices in this area. And the company's cloud software will strengthen the existing line of AMD offerings.
Pensando is, if you can say so, "intellectual" business, just that area, in which AMD is strong simply because of its specialization. So let's hope, that the new acquisition of the company will be of great benefit.
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