Apple finishing the green today. The stock is now 10 days in a row.
As long as its winning streak since 2010.
The company basking in the afterglow becoming the first streaming service to win a Best Picture award at the Oscars.
Apples only been in the biz with Apple Plus for three years.
They won them for the movie coda,
one negative headline though, for the company reports that Apple is cutting production for its new iPhone by about 20%
due to weaker than expected demand.
This report comes out of out of Japan.
We heard these things before my Co.
Especially from the Japanese newspapers,
which is, you know, supposedly have their ears to the ground to the supply supply chain that exists out in Asia.
What do you make of this?
So two quick things about this.
I mean, first of all,
my biggest concern would take place if we saw essentially concerns about or the desire to start slowing production because we saw people transitioning to a competing devices and that
is not the case here.
The other thing is that when I read this I I saw that it was the iPhone SC which I think is just a subset and I'm not sure that
it's the highest price subset you know,
as long as the you know the demand essentially for Apple products as.
A percentage of the overall mobile devices market remains unchanged or continues to grow.
I I don't really see why this is such a huge negative.
Obviously there have been some pretty significant setbacks in terms of supply chain and things like that for a lot of technology providers.
I think of this as more of as a pause.
I don't see this really affecting Apple's market share at all,
and that's what I'm keeping my eye on.
The SC. Of course, being the cheaper phone I mean revenues could be down,
caring. Maybe margins would be higher actually.
For the cheaper phone, no.
If they if if if 20%
of the cheaper phone production mix right,
the
mix could be a better mix would change right?
But I I agree with.
I mean, Mike's point is to me the main one.
Is it a demand issue or supply issue right?
I sort of would think this is a supply issue.
Then we get back to you know is it?
Is it denied or delayed that sale?
I would think just delayed so you know I'm long the stock.
It's certainly not the cheapest thing I owned by a lot,
but I wouldn't trade out of it on a story like this.
Yeah, when I think about Apple.
Today also on a day and we're going to talk markets with Tony Dwyer a little later in the show.
But on a day when the the story in the bond market was really that again.
You know we're seeing the the yield curve,
invert, etc. The reason I'm bringing up Apple in this conversation is because the flight to Quality Inn big cap tech is is undeniable.
And and we just had this conversation about Tesla and as a paying devs,
you know why etc. I mean,
Apple is a company that has so many levers to pull and even during a period where we think demand could be an issue,
Apple can be buying back stock.
They can be increasing dividend their capital markets and they're there.
Essentially, their their capital structure dynamics are so different than any other company in the world that this is a reason why I think even on a day like this,
if this was a headline that could have taken Apple down like I,
I think their their fiscal numbers that come out in,
you know, whatever we six weeks away are are are really the story that people are going to want to see on margins and where demand is for a bunch
of products that I think have been pulled forward.
Yeah, I think the reaction in the stock C was the most,
I don't wanna say surprising thing about it,
but it tells you a lot about how the Market Street with these sorts of rumors.
We hear them time and time again about suppliers getting orders to cut.
Whatever you know because of demand issues or whatever it is just cut production.
Right?
So, so the I'll give you the negative I'm.
I'm still long Apple I I intend on staying long apple.
The only negative that I see is it's had an incredible bounce off the recent low.
Today was an outside day so technically it made a higher high and a lower low than the previous day,
which means that it's it should in theory break trend if it breaks trend.
The trend has been up so you don't want to see it break trend.
You want a continuation of the process,
but everyone is going to be talking about that one 8286 number.
Yet again, that's the $3 trillion market cap level that it was at before it faded.
The other thing I think people are going to start talking about is the auto auto recurring sales event to make it like a subscription stock.
Are you going to want to do the auto subscription stock for your hardware?
Maybe, maybe not, but I think Apple is getting ahead of the service headwind that potentially could be coming out that well.
I I shouldn't say potentially that's been coming at them regarding the Apple Store for years,
but that's going to be an ongoing an ongoing headwind 4 years.
I would stay long apple and look for $200 sooner rather than later,
even though technically you could get a little bit of a backpedal.
Are you saying that they came out with a subscription hardware plan?
Steve, because they they know that services are gonna slow dramatically.
No, I don't think they.
I don't think they're going slow,
but I do think that the rhetoric is out there and I guess services are somewhere around 18%
of total revenues right now.
Maybe I'm a little bit shy,
maybe it's more like 19%.
I don't think they're going to slow dramatically,
but that is the potential,
and that is definitely the rhetoric,
and I think they want to stay ahead of that.
Just one more thing on that subscription.
It makes me wonder, do they want to get into your pocketbook more?
Do they wanna have you paying monthly and do they want to have you?
You know Apple Pay? Do they want to provide financing?
You know they have the credit card,
I don't
know and they want they want into my pocketbook.
I'll tell you that Karen.
No, no, no. But then if you think about Apple Plus as a as a subscription service too.
I mean, if you think about it,
you you brought up the whole dynamic of of of winning the best picture.
I, I just think Apple as a company that has a services target on everything that you're doing and places they can you.
I, I think the fact that the media companies are now dominated by Netflix,
Amazon and Apple is is extraordinary and under.
Under appreciated the day after the Oscars?
Well, how should we interpret apples win?
I mean, we mentioned that Apple has been in the business for what,
three years or so as a content producer with with Apple plus and so should the other streamers be more highly valued or should we look at them as potentially
the next studio? Should folks like a Disney or Comcast be worried because their studios have much stiffer competition from the likes of of an Apple and Netflix Mike?
No, I don't really think so.
I mean, here this is the thing I mean,
do we sit and watch the the Oscars every single year and then figure out?
OK, well, you know whichever,
whichever studio one that that's the one that we're going to go and chase the stock.
Now I, I don't really think that's the way you know investors think about things.
I mean, if you have a big blockbuster,
that's that's another story. We do see people,
and we often see the Reddit crowd.
For example, start chasing that a little bit,
but you know, at the end of the day,
we're more interested in profit margins and.
On revenues and ticket sales,
and I think we are the number of shiny trophies.
Although you know if you're in Karen's family,
maybe that's the thing that you're paying a lot of attention to as well,
because you seem to be accumulating them.
I mean to shine two shiny trophies in your family,
that's really very cool. Very cool.
I had nothing at all to do with any of it,
sadly, but one more thing though.
These movies, I mean, those 10 nominations were a lot of small movies,
right? And then they had that 5 highlights people's favorite.
They were all like Avengers.
This and. Marvel that and blow up this,
and that's where the giant those tentpole movies are.
Yeah, I mean Netflix had 27 nominations or something like that.
I mean, it's extraordinary. And as someone that at one point called Netflix,
just the pipes and, and really a a a conduit and now an owner of Netflix,
now an owner of Netflix shares and now an owner of Disney shares and an owner of Apple shares so and an owner of Amazon shares.
So I mean, I, I like my exposure to both old school media and new school media,
but but I I do think it is about content I.
I do think that. Argument and I love Disney's content.
I think their studio is unrivaled in their ability to roll out things that are massive and the flywheel and all of that.
But to say that Apple's you know getting best picture isn't a Seminole moment,
I I think for Hollywood,
I think it is. And I think it's a really important in terms of driving talent.
They could always have overpaid.
But now I think this is a studio that has to be respected differently.