Mad Hedge Technology Alerts!
Apple (AAPL) iPhones overheat and this could mean lower quality phones in the future.
Spend the amount of an expensive laptop for a handheld device and the customer becomes bitter – that’s a pretty crappy business model.
The old Apple wouldn’t have slipped up like this – the one helmed by Steve Jobs.
Even more ironic, Apple is specifically renowned for its software expertise, but all signs point to their engineering team botching the latest iteration of the products that Steve Jobs built.
The latest black eye for the company in Cupertino is heaped onto the already large set of problems like China banning their products and declining iPhone sales.
Apart from a titanium finish, the iPhone doesn’t really give much of a reason to upgrade to the new version and why would someone go the extra mile when there is a high chance of battery heating problems.
Apple will issue a software update that would address customer complaints about the latest iPhone 15 models.
Apple said that the new iPhone models were running hot because of a combination of bugs in iOS 17, bugs in apps, and a temporary set-up period.
Apple is preparing to release a new iOS 17 update to address "a few conditions" it has "identified" that can cause the new iPhone 15 models with a titanium frame to run warmer than expected.
Days after the new iPhone release on Sept. 22, customers who stood in line at Apple stores complained their new phones were overheating to the point of being too hot to hold and even shutting down on their own, with some folks recording temperatures above 120 degrees.
The complaints are mainly about the iPhone 15 Pro and Pro Max.
The 15 Pro Max did become noticeably hot after using a MacBook Pro's 140W power adapter to charge it.
Negative press about the new iPhone could dampen sales as the company has experienced an overall year-over-year sales slump in the last three quarters.
Apple is trying to sell the iPhone 15 Pro Max (1TB storage) for as much as a high-end laptop, around $1,600 (before taxes).
Apple’s new high-end models, the $999 iPhone 15 Pro and $1,199 iPhone 15 Pro Max have a redesigned titanium enclosure with an aluminum frame to make them easier to repair.
Apple’s problems with their new iPhones epitomize the current state of tech companies.
Many firms like Google, Facebook, and so on try to sell the same product with no noticeable upgrades.
The bulk of people won’t see much difference between using an iPhone 14 and iPhone 15.
Tim Cook was never a visionary and now that iPhones are declining, his response appears to double down as an expert operations specialist.
This won’t cut it when the company needs more spice.
Running the company more efficiently and streamlined won’t solve the issue of the flagship products losing sales.
A transformative shift in the management is needed to reimagine what the future could be something more akin to his predecessor Steve Jobs.
Many years on, Cook is still living off of Steve’s ideas, but the issue now is the diminishing returns is now resulting in negative growth.
The diminishing returns happen because Cook is holding onto ideas that have grown stale.
That never happened before and shareholders hate it.
In fact, Apple has been previously lauded for its aggressive creativity, and by and large, that has vanished from their current staff.
Apple needs a kick in the butt and it’s highly possible that all the great talent that used to be in Apple has been chased out because the company became too comfortable and too corporate.
Mad Hedge Technology Letter
September 29, 2023
Fiat Lux
Featured Trade:
(WHAT TO DO ABOUT MICRON)
(MU), (SAMSUNG), (SK HYNIX), (SOXX)
The chip maker Micron Technology (MU) fell 5% yesterday, but the stock is amazingly up 4% today.
The see-saw moves are a feature of this strategically important stock to the tech ecosystem and not just a symptom of it.
The stock is highly volatile which is emblematic of a stock that needs to constantly navigate around unstable geopolitics.
The stock's latest whipsaw action stems from the company predicting a steeper loss than anticipated in the current quarter, indicating that an industry slowdown is still weighing on the largest US maker of memory
For chip companies (SOXX), Samsung Electronics Co., and SK Hynix Inc., 2023 has been a crushing time after the glory period of the healthcare lockdown years.
September has been a month where we are experiencing weakening fundamentals as the US consumer is truly stretched.
Customers in big US markets for personal computers and smartphones have slashed orders as they cope with lackluster demand and stockpiles of excess parts.
Many are continuing to dive deeper into debt to make ends meet and that trend will not go away as the US middle class shrinks further as they grapple with soaring inflation.
The lack of consumer strength will mean it will take longer for Micron to return to profits.
Prices for Micron’s products are going up, and the rate of the price jump is increasing and we can probably say that about prices in most industries.
Sales have fallen for five straight quarters. In the three months ended in August, Micron’s revenue declined 40% to $4.01 billion.
The forecast suggests sales will begin to grow again in the fiscal first quarter, which runs through November.
Beijing has proved a thorn in Micron’s side.
This negative headwind has already cut into the US company’s revenue in China — the largest market for semiconductors — in what management has previously called a “significant headwind.”
The outlook remains mixed in the short term. In traditional servers — the computers that are still the mainstay of most data centers — demand remains tepid at best.
Both personal computers and smartphones will return to growth next year, with units increasing by a percentage in the low- to mid-single digits.
To cope with the slowdown, Micron and its peers reined in production, severely reducing supply and helping prices bottom out.
Micron will be demonstrably below peak 2022 output for the foreseeable future. The company plans to continue to run factories at less than full capacity well into calendar 2024. Micron also will further reduce spending on new equipment next year.
These are bad signs in the short term, but the strategic importance of MU puts a solid bid under the stock price.
I wholeheartedly expect the industry outlook to brighten considerably by 2025 — especially as artificial intelligence systems demand new types of more expensive memory chips.
Therefore, every big dip is a buying opportunity in Micron because this stock is resilient.
Luckily, big dips are common in MU and readers should be patient to wait for optimal entry points.
This is a good one to buy and hold for the long term.
