Helping you navigate the new normal since 2001
Apple’s massive price rises highlight demand destruction in action. Suddenly, prices are going up, not down. The longer the wars and the AI bubble continue, the more prices and inflation will rise as supplies reduce
Smartphone sales collapse confirms War and AI-related demand destruction is now underway Read More
China is potentially in the ‘eye of the storm’ as component prices rise. This will force its manufacturers to raise their prices – just as the Strait of Hormuz closure forces consumers to cutback spending.
Strait of Hormuz closure adds to smartphone downturn Read More
Smartphone markets are essentially acting as the ‘canary in the coalmine’, warning us that the global economy is still only at the start of suffering a major shock.
Hormuz crisis, memory-chip costs, will reshape the smartphone market Read More
Today’s key issue is that we are seeing the end of the ‘middle market’. We are now returning to a world where companies compete on Value or Luxury. The highly profitable middle market of ‘affordable luxury’ is disappearing.
iPhone captures Luxury market whilst Samsung’s Galaxy competes with low-cost Value players Read More
Republicans are racing to finish the draft budget by Memorial Day at the end of the month. Bond investors can be forgiven for getting nervous about who is going to pay the bill for Trump’s tariff war and tax cuts.
President Trump’s tariff war and planned tax cuts reawaken the ‘bond vigilantes’ Read More
China is Trump’s main target. He has claimed that China will pay the extra cost. But US consumers know better. They rushed to buy in March before prices rose. Q1 US sales were up 12% as Apple flew-in 1.5m iPhones ahead of the start of the tariffs.
President Trump’s Tariff War will soon lead to empty shelves at Wal-Mart, Target, Home Depot and many other stores this month. The famous saying “Well in May and go away” might be a prudent policy for investors.
We are back in a world where geopolitics, not economics, drives decision-making. It is a world of shifting alliances. And so defence spending is set to be a key growth area for the future as Cold War 2.0 begins.
The Rules for doing business have to change. As NATO’s leader, Mark Rutte, has warned, Europe needs to “Raise defense spending or start learning Russian”
6 ‘Rules for Success’ as tariff wars and Europe’s Clean Industrial Deal begin Read More
The smartphone market highlights how consumers are refocusing on ‘value for money’. Sales are falling as people hold onto their phones for longer. And more people are now happy to buy a cheaper used model.
Smartphone sales confirm that ‘value for money’ is starting to drive consumer demand Read More
The world’s most successful investor, Warren Buffett, has been selling his shares. Apple was once half of his equity portfolio. But over the past year, he has sold 2/3rds of his holding. And Buffett doesn’t normally sell shares when he thinks the company will do well.
Smartphone markets could see major changes as Trump rolls out his tariffs Read More
Demographic changes are transforming the nature of demand in all major industries. The highly-profitable middle market is disappearing. Companies and investors need to abandon ‘business as usual’ strategies and refocus on these major changes.
Smartphones highlight major shifts underway in consumer markets. The cost of living crisis means people are only buying what they “need”, and cutting back on what they only “want”. And today’s ageing populations mean there are fewer young people to make their “first purchase”.
Apple loses its Top 5 position in China as price competition intensifies Read More
Nvidia is a good company. And AI has proved useful for decades – flying planes, for example. But Silicon Valley is also very good at hype. And so Nvidia’s share price is more likely to follow Cisco’s path, than to keep climbing forever.
Stock market bubbles follow the same pattern, as Nvidia and Cisco confirm Read More
Q1 data showed that many consumers are tightening their belts and focusing on value for money. But investors don’t yet seem to have noticed, and are still bidding up Apple’s share price to euphoric levels.
Smartphone sales continue to slow as consumer demand patterns change Read More
Resilience requires companies to refocus downstream and diversify their portfolio. They also need to be clear about the value proposition for their target market – are they providing Value, or Luxury? Rethinking, repositioning and restructuring are now all key to survival and future profit.
Rethinking, repositioning and restructuring are now essential for industry survival Read More
These changes in demand patterns are not just impacting Apple and the smartphone market. They are already impacting suppliers to the market. And they are also starting to impact a vast range of other major consumer markets.
Used smartphones take 21% of global sales; Samsung declines as middle market disappears Read More
The smartphone market highlights how companies are responding very differently to the economic slowdown. Samsung is adding features such as ‘foldables’. But Apple is building services business to provide annuity revenue for the future.
Q3 smartphone market confirms need to build Services revenue as consumer sales slow Read More
The downturn in the global smartphone market highlights the need for companies to focus on the Value segment and Services as the Middle Market disappears. iPhones are now 49% of the booming second-hand market, allowing Apple to gain more Services revenue via its App Store.
Smartphone decline highlights the end of the profitable BabyBoomer-led ‘middle-market’ Read More
Either chemical markets are wrong or the financial markets are wrong, and obviously we think it’s the latter. People thought China was going to bounce back rapidly after Covid but China’s growth since 2008 was the product of massive stimulus and property speculation which couldn’t go on forever.
Chemicals, financial markets reach a fork in the road Read More
Cheap used phones priced at <$200 are now the only growth area in the smartphone market. Companies who just sell hardware are now set to be Losers as their profits tumble. Companies like Apple, with a strong brand and service offering, will be long-term Winners.
Smartphone sales hit new low as world moves into its first “demand recession” Read More
Now, we are all starting to suffer for the central banks mistake in adopting Bernanke Theory. The bubbles they created are finally starting to burst as interest rates return to more normal levels. This will be very painful for all those who trusted them to manage the economy.
“FANGs” lose their teeth as stock markets relearn their key role of price discovery Read More
Apple symbolises the major changes underway in the economy. Its stock price is in decline as central bank stimulus disappears. And its profits are threatened as pressure builds on its supply chain and pricing.
Apple’s China problems highlight smartphone market downturn Read More
Since January, investors have begun to realise that the FAANG stocks were just as over-valued in December as during the dotcom bubble. Of course, hope springs eternal as we saw this month. History suggests we will see several ‘false dawns’ before the market finally bottoms.
FAANG stock prices start to tumble as the tech bubble begins to burst Read More
Consumers around the world are tightening their purses and cutting back on non-essentials as the impact of the 4 Horsemen of the Apocalypse – Covid, the war, food shortages and rising interest rates – increases.
Smartphone sales go ex-growth as consumers cut back Read More
The market downturn couldn’t have come at a worse time for Apple. It was already facing major supply chain chaos in Q2. And now it has to face a major decline in the smartphone market itself. Inevitably this will lead to a brutal battle for market share as companies struggle to survive.
Smartphone sales set to tumble as China’s lockdowns continue Read More
Two core trends are playing out in the smartphone market, now it has gone ex-growth. The weaker players are suffering major hits to their revenue and profits. And the most successful company, Apple, is busy accelerating its move into the more service-based markets of the future.
Apple still takes 75% of smartphone profits, due to its domination of the value chain. But other industries have been rather slow to learn the lessons from its success.
Smartphone sales decline highlights need to move to a more service-based business model Read More