Please excuse the simplistic headline – economies and stocks must absorb many factors such as inverted yield curves and arrests of execs at top Chinese tech firms but still, analysts have told us time and again that sales of Apple devices are far less than expected. This in-turn is hurting stocks.
The most recent story explains that foundry TSMC is only running at 80-90 percent of its 7nm capacity. TSMC makes many of the chips in devices from Apple and other companies.
If we assume the reports are correct, then what could be the reason? We really don’t believe the iPhone XR or XS have any issues which should reduce their desirability. Instead, there could be a simple software explanation, iOS 12.
The speed improvements in this new version of the operating system were quite dramatic – especially on older devices. In some cases, two times faster! Apple deserves a great amount of credit for making hundreds of millions of devices much more useful.
The downside? Less of a need to upgrade.
This, in turn, hurt suppliers.
The takeaway among many analysts is there is less demand for tech and thus perhaps consumer confidence has issues, or there is something else wrong with the economy.
What seems to be missing in all the analysis is the fact that the need to upgrade has been dramatically reduced thanks to hundreds of millions of devices that are now far more useful.
So in short – Apple suppliers may be hurting and this, in turn, spooked markets and now we have hit bear market territory for some equities.
Unless iOS gets even faster in the future, we can expect this to be a one-time issue with upgrade cycles returning to normal over time – often because batteries really start to degrade after a few years, making all mobile devices less useful.