DED calls FUD on Apple coronavirus reporting

Don’t fall for the fear mongering, says Daniel Eran Dilger. Apple is less at risk from store closures and quarantines than Huawei, Oppo, Vivo or Xiaomi.

From “Why Apple’s supply chain is prepared for China’s coronavirus” posted Monday on AppleInsider:

As China scrambles to contain the outbreak of the highly infectious strain, media bloggers working to erect fear, uncertainty, and doubt about Apple’s prospects have sensationalized the greatest imaginable potential impacts on Apple. That naturally includes Apple’s product sales in China, where its brick and mortar retail stores have been closed for a few days following the Lunar New Year holiday period out of “an abundance of caution.”

Never mind that store closures—and full city shutdowns in some cases—aren’t unique to Apple. Apple has the fewest stores in China of any of the major handset manufacturers. Apple’s few dozen landmark retail stores in China exist to establish the company as a permanent, enduring brand capable of supplying customer service for its products well into the future.

Most rival domestic phone resellers in China operate vast numbers of kiosks designed to sell their cheap Androids largely via promotional pricing. The greatest impact of broad retail store closures will fall on brands such as Huawei, Oppo, Vivo, and Xiaomi, who all strive to make razor-thin margins on vast unit sales of commodity devices. Their businesses are contingent on massive sales volumes shipped out at minimal cost —and Apple’s are not…

Fear-mongers have also targeted the potential impacts that travel bans, quarantines, and business closures within China might have on Apple’s ability to build its products for global audiences, because much of its components and assembly are centered in China…

Apple has long been taking the lead in employee safety, worker rights, and environmental protections, a luxurious moral stance it can afford as a very profitable company. Yet its competitors in China have long had a poor reputation in safeguarding their employees or even monitoring factory safety. Which Android makers can afford to take elaborate steps to keep their factories and their workers safe and productive when they are already barely profitable at peak production?

My take: Gregg Thurman, this one’s for you.

7 Comments

  1. Michael Thompson said:
    Daniel Eran Dilger is my personal favorite ACCURATE Apple journalist. His writings are mandatory consumption for all Apple longs.

    Few tell the truth about Apple and no one obliterates the media and analyst LIE narrative better than Dilger.

    5
    February 11, 2020
    • Robert McDonald said:
      100% agree with Dilger and others posting here for the longer term but I think a lot of people have their head in the sand regarding Apple’s results over next two quarters and Dilger’s not acknowledging that. Again I am out of Apple in my tax free accounts and intend to be back in at a big discount sometime over the next 3 to 6 month timeframe.

      What’s happening on the Carnival Cruise liner and DBS Bank headquarters in Singapore (See below) is a script for what could happen in a Foxconn factory in the near future.

      PS: This is not a fear monger talking. This is a realistic assessment made by a person who has 30 plus years of investment experience and does hours of investment research everyday. My focus is currently on the impact of the Coronavirus on Apple and worldwide financial markets.

      https://www.livemint.com/news/world/coronavirus-outbreak-singapore-s-dbs-group-evacuates-300-employees-asks-to-work-from-home/amp-11581503303497.html

      0
      February 12, 2020
  2. Kirk DeBernardi said:
    All true. A great addition to the study of Apple.

    Yet while accurate, thorough and constantly unabashed about calling out inaccuracies that deserve a healthy calling out, DED tends to sidestep Apple criticism a bit too frequently.

    Thorough and unabashed should swing both directions.

    2
    February 11, 2020
  3. Kirk DeBernardi said:
    @ Sacto Joe —

    That I can’t give you ANY examples of criticism kind of proves my point.

    Full exposure — I personally have been accused of this same overtly defensive stance amongst my family and friends when it comes to any general (or specific) criticism of Apple. I defend FAR more than criticize.

    Is my defensive protectionism attitude due to the fact that a tremendous amount of my personal wealth is in AAPL

    — or —

    am I simply convinced that this company can do no wrong

    — or —

    sadly, both.

    Ironically, I still haven’t figured that one out.

    All I feel is that in many instances it’s somewhat discomforting to feel this way — all in, baby — all great.

    The clickbait worthiness of anything Apple inherently brings attention — the cardinal want of any writer. Apple continues to be a hot topic, good or bad. We all should be a bit grateful for this as it allows for a much deeper, more broad and thorough understanding of Apple as an investment — scuttlebutt and all.

    So let’s beat this stuff up and thrash it around in public and private. If you pay attention, the truth will out.

    As the old adage goes — it’s when they DON’T talk about you, is when you should worry.

    3
    February 11, 2020

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