Tim Cook on Chinese manufacturing: "Vocational expertise is very, very deep here" (2018)

There's a confusion about China...  The popular conception is that companies come to China because of low labor costs.  I'm not sure what part of China they go to, but the truth is, China stopped being a low-labor-cost country many years ago.  The reason [for moving jobs to China] is because of the skill.  The quantity of skill in one location and the type of skill it is.  The products we [make] require really advanced tooling and the precision you have to have in tooling and working with the materials we do are state-of-the-art.  And the tooling skill is very deep here.  In the U.S., you could have a meeting of tooling engineers, and I'm not sure we could fill the room.  In China, you could fill multiple football fields.  Vocational expertise is very, very deep here.

~ Tim Cook, "Apple CEO Tim Cook explains why Apple chooses China for manufacturing," 2018

Martin Yang on how Apple is losing market share in China

Melissa Lee: Martin, how do you think about Apple's China market share and whether or not its stance in China is impaired permanently...?

Martin Yang: Certainly, I think the pressure on Apple in China come from a couple sources.  Internally, I think Apple is taking a questionable product strategy with iPhone 6E.  Usually those lower end models will help Apple to gain share in markets such as China, but 6E, with a single camera on the back and a higher-than-expected price point is a very poor new addition to the portfolio to gain share.  And additionally, Apple's competitive pressure in China is very different.  A lot of local competitors is able to offer much more compelling hardware features, such as camera foldable designs and thin form factor to offer a much better differentiation on the hardware side.  And third point is the competition on Apple in China where Apple's software advantage is much weakened in China.  That also helped competitors gain share at a more structural basis.

~ Martin Yang, Oppenheimer analyst, "Apple Intelligence is not a major driver for an upgrade cycle, says Oppenheimer's Martin Yang," 1:10 mark, CNBC, March 14, 2025

Shaun Rein: Chinese consumers are buying local brands

Chinese consumers are cutting back.  They are buying local brands right now not because they're being told to by the government, but because they're patriotic, just like the Canadians are buying Canadian to offset the Trump tariffs and also because Chinese products are cheaper and just better right now.  So I use a Xiaomi phone because it's about 30% cheaper than Apple.  I think it's almost as good.  Maybe it's as good as an Apple.

So investors need to be buying brands that are Chinese to ride the patriotism trend and also because they're just good value.  Think Luckin Coffee rather than Starbucks.  Think ANTA Sports rather than Nike.

~ Shuan Rein, "Chinese consumers are cutting back and buying local brands, says China Market Group's Shaun Rein," CNBC, 0:50 mark, February 12, 2025

Cyrus Janssen: "I don't believe that China is the biggest threat to the United States"

One fundamental belief that has really guided me a lot is be the change you want to see in the world.  It's very simple...  So I want to see a change between the U.S. and China.  Maybe I'm too small.  Maybe I'm just one person.  Maybe I can't really influence this, but I'm going to go try.  I'm going to try to be that change that I want to see in the world.

I don't believe that China is the biggest threat to the United States.  That is something that I'm going to die on.  It's a fundamental belief of mine that's something that I'm going to continue to preach on.  So when I talk to people, when I speak in conferences around the world, when I speak to anybody, from the side of the street to...  I went to a local pharmacy and there were two guys talking about China.  "Oh, China's taking all our jobs, there's no manufacturing anymore in America because of China.  China's the problem!"  And I thought, "What's interesting is that, what phone do you have?"  

"Oh, I have an iPhone."  

"Okay, well, if we bring that factory back to America, we're going to have to hire Americans for about $50 to $60 an hour because they won't work for less than that in a factory.  They don't want to do that job.  So are you willing to pay $5,000 to $6,000 for an iPhone?"  

"$5,000 to $6,000?  That's insane."

"Exactly, that's why we need China, because there's also a fundamental reason why Apple's gone to China, is because they're able to produce the best quality phones, at the best prices and they do so because it's China...  And as a result, Apple's become one of the most valuable companies in the world.  So if anything, just go buy some Apple stock and enjoy the tangible benefits that come from dealing with China,"

~ Cyrus Janssen, "Shocking Truth About China Told by an American," Max Chernov, 38:15 mark, October 14, 2024

Fred Hickey on why Apple's stock is vulnerable

Apple's stock has rallied all year long (almost back to a record high) and certainly does not reflect the deterioration in the economy, the squeeze on consumers from tightened lending, declining consumer sentiment (remember - Apple sells to consumers - not corporations), the slide in the smartphone market - leading to an inventory overbuild and digestion period, falling revenues and earnings and a rising P/E ratio (twice as high as it normally runs at).  It also doesn't account for its heavy exposure to China (relations between the U.S. and that country continue to worsen), a difficult (and likely costly) transition from producing nearly all its products in China to places such as India, the likelihood that the Chinese government will kick Apple in the pants on the way out (I don't think China will forget how the U.S. government destroyed Huawei's smartphone business), the poor position of its product cycle and lack of innovation.

Of all today's Big Seven, Apple (and likely Tesla) appear to me to be in the most trouble (short-term and long-term) and once Apple's stock momentum inevitably turns downward again, investors may experience a Wile E. Coyote moment - over the cliff and with a long way to fall in the bear market.

~ Fred Hickey, "2000 Déjà vu," The High-Tech Strategist, June 1, 2023

Steven Sosnick on investors piling into Apple and Microsoft

The one thing that does worry me is the concentration in everybody's favorite stocks, so to speak.  You've got now Apple and Microsoft combining to be 25% of the Nasdaq 100.  Stop and let that sink in: two stocks being 25% of a major index.  They're 13% of the S&P 500, give or take, combined.

~ Steven Sosnick, "A bank crisis brings back an old favorite back for traders," Yahoo Finance, 5:30 mark, March 28, 2023

John Tamny on economic ties between the U.S. and China

It cannot be stressed enough that to visit China today as an American is to feel like you're a very welcome person.  You feel more at home than the average person because everywhere you look is a McDonalds, Burger King, KFC, Apple store, Nike store.  Everything over there is American.  The Chinese people - say what you will about Xi - are conducting a love affair, and it's a passionate one, with all things American.  Apple sells a fifth of its iPhones there, it's the second largest market for McDonalds, 4,200 Starbucks there on the way to tens of thousands.  It is a massive market for U.S. goods and so I find it just strange: China was a much bigger threat to us when it was a desperately poor communist country than it is now as a country that its people are finally tasting the fruits of economic freedom.  Are they as free as we are?  No, but these are people who love all things American and all you need to do is visit there to see this.

~ John Tamny, "Key Takeaways from the Annual Stansberry Conference," 1:14:55 mark, November 4, 2021

Evan Lorenz on competition heating up in Big Tech

On Oct. 20, the U.S. Department of Justice filed a suit against Alphabet [parent company of Google], alleging that the search giants payments to Apple, Inc. to make Google the default search engine contravenes U.S. law. To put the Department's suit in perspective, Alphabet pays Apple an estimated $8 billion to $12 billion per year, a sum equal to between 12% and 18% of Cupertino's operating income. Nearly half of all Google searches originate from Apple devices. This is not a parking ticket. However, there appear to be contigency plans. Two-and-a-half years ago, Apple hired John Giannandrea, Google's head of search.  An Oct. 28 report by the Financial Times found that iOS 14, the latest iPhone operating system, used Apple's home-grown search engine for certain user suggestions.

[...]

As we go to press, Apple trades at 35.6 times trailing earnings and Alphabet at 36.5 times.  The stocks seem priced for everything - except competition.

~ Evan Lorenz, "Comity in Washington," Grant's Interest Rate Observer, November 13, 2020

Dan Ferris on the mania for Big Tech

No one can imagine that Amazon isn't the greatest thing in the world.  No one can imagine that Facebook and Google and Apple... at a $2 trillion market cap.  People simply can't imagine that these aren't the greatest businesses now and forever.  I promise you, they will be disappointed.

~ Dan Ferris, "Kodak Crashes 85% from Recent Peak," Stansberry Investor Hour, 67:00 mark, August 13, 2020

Warren Buffett on Berkshire Hathaway's 5.5% stake in Apple

[Apple is] probably the best business I know in the world.

~ Warren Buffett, interview with CNBC's Becky Quick, February 24, 2020

(AAPL closed that day at 298.18, valuing the company at $1.328 trillion.)

Fred Hickey on Apple's recent earnings release

Apple handily bested estimates with better than expected iPhone sales but weaker services growth ($400 million less than expected).  On the conference call CEO Tim Cook was asked which services segments caused the shortfall.  He avoided answering the analyst's question.  It's important because Apple's services businesses are supposed to pick up the slack from the no growth (and highly competitive) smartphone market.

~ Fred Hickey, The High-Tech Strategist, February 4, 2020

Barron's: DOJ goes after Big Tech even though "none of the companies have traditional monopoly positions"

The Justice Department announced late Tuesday that it has opened a review of “the practices of market-leading online platforms.” The agency didn’t name specific companies, but the wording suggests that it will look into Google parent Alphabet for search, Facebook for social media, and Amazon.com for e-commerce.

[...]

[P]roving consumer harm is a tough task when Facebook’s and Google’s services are mostly free, and Amazon’s e-commerce platform has arguably lowered prices and increased convenience through faster delivery.

In fact, none of the companies have traditional monopoly positions in various markets. EMarketer estimates that Amazon represented 37% of U.S. e-commerce sales in 2018 and 3.5% of total retail sales. The firm also said Google accounted for 50% of U.S. digital-ad spending that year, while Facebook had 22%. Apple’s iPhone had 45% of the U.S. smartphone market, according to eMarketer’s latest data.

~ Tae Kim, "Why Investors Shouldn’t Overreact to the DOJ’s Antitrust Review of Big Tech," Barron's, July 27, 2019

Carl Icahn: "Apple is a no-brainer"

I think Apple is a no-brainer.  You don't need to be a genius in technology to understand [that it's trading at 9 times 2014 earnings.]

~ Carl Icahn, CNBC, January 22, 2014

(Icahn owns roughly 1% of Apple's shares and wants them to buy back $150 billion in stock.)