Apple Issues
- Gordon Patrick
- Apr 20, 2024
- 2 min read
WHITEPAPER (The Utility of Apple inc.) posted May 14th 2024 ---
Preview :
On March 21st, 2024, the United States Dept of Justice (DOJ), filed a lawsuit against Apple (AAPL) under section 2 of the Sherman Antitrust Act. The DOJ alleges that Apple is using anticompetitive practices to “...maintain its monopoly in the smartphone market”.
This filing comes at an interesting time for Apple. It is perceived to have failed (so far) to clearly articulate and implement a cohesive AI strategy relative to its peer group in the “megacap” technology sector. Year to date in 2024 it has seen a $400B (13%) decrease in its market capitalization (currently sitting at $2.6T as of April 26th, 2024) and is now a distant second to Microsoft ($3.0T) at the top of the S&P 500 index listings. The examples cited as headwinds for Apple are various:
Geopolitical and economic risks regarding the stability of its strategic relationship with China (re-shoring, manufacturing, US trade tariffs).
A fractious regulatory relationship with the European Union (Digital Markets Act, Digital Services Act).
Declining international smartphone market share (especially in China where its CQ1 2024 Y/Y share just declined 6.6 points to 15.6%; just lost its number 1 market share position).
Prolonged flatline Y/Y corporate growth (Dec 2021@ $179 - April 2024@$169; currently trading at 52-week lows).
Lack of technological innovation, market segment growth and product execution (Titan Car project, Vision Pro, iPhone upgrades).
In summary, Apple is experiencing a relatively rare "PR dip" this year. We wanted to understand the fundamental rationale for this dip, the likelihood of systemic risk and the motivations behind the multiple vested interests involved. With this in mind, we will post an upcoming Analogy Research whitepaper (The Utility of Apple Inc.) on May 14th, 2024, which will:
Develop a comprehensive thesis based on full analysis of the above developments.
Incorporate the latest updates from Apple’s FQ2 earnings release on May 2nd
Incorporate the latest updates from the Apple product announcements on May 7th
Provide a mid to long term assessment on Apple’s strategic outlook.
WHITEPAPER POSTED /
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