Apple iPads are hot hot hot in China right now

From “Apple iPad stocks run low in China as coronavirus spurs e-learning” posted Wednesday in Nikkei Asian Review:

Apple iPad china e-learningStocks of Apple’s iPad are running low in China as families snap up the tablets to help with e-learning at home in response to coronavirus-related school closures.

The extra demand has come as suppliers across the country are struggling to meet production demands amid labour shortages that are also related to the virus.

Demand had been rising strongly since January when Beijing began insisting on quarantine in response to the coronavirus outbreak, sources have told the Nikkei Asian Review. One source with direct knowledge of the matter said Apple recently ordered a 20% increase in production of the latest version of the iPad for the first half of this year, compared with the production forecast the company gave to its suppliers in January before the outbreak…

To help pupils keep up with their studies, Beijing has encouraged schools to move their courses online, with at least 50 million students now taking classes on Alibaba’s telecommunication app DingTalk, for example…

JD.com and T-Mall both show that tablets made by Huawei, the second-largest tablet maker in China after Apple, are still in stock, although T-Mall is limiting purchases to one tablet per person for some models.

My take: This is how Chinese students get ahead in the age of COVID-19.

13 Comments

  1. Steven Philips said:
    I wonder if this will become a trend worldwide.
    Many school closings and push for online classes.
    Once online usage increases it will probably stay somewhat above
    the current base level in the future.

    3
    March 11, 2020
  2. Fred Stein said:
    Even in tablets, even in China, and even with supply constraints, Apple beats Huawei.

    If anyone buys a new tablet now, they won’t buy a foldable phone. It’s redundant.

    Students who buy an iPad for school work, are more likely to subscribe to Arcade.

    2
    March 11, 2020
  3. Wyatt Counts said:
    When Apple expanded FaceTime to 32 people it seemed to me to be about the size of a classroom. That said, I’ve not used it with more than one person.
    Also, I’m curios if we might see a body temperature sensor on the next version of the Apple Watch. In the era of pandemics a real time, opt in, sensor net could be a valuable tool for public health.

    0
    March 11, 2020
  4. David Emery said:
    (Only) Apple is doomed because of Covid-19… 🙂

    0
    March 11, 2020
  5. Gregg Thurman said:
    One source with direct knowledge of the matter said Apple recently ordered a 20% increase in production of the latest version of the iPad

    I haven’t tried to calculate iPad ASP since Apple stopped reporting units sold. The last time I calculated ASP it was $432 (average for fiscal year). If that value remained constant, then increased iPad sales would offset iPhone decline with roughly 2 iPads equalling 1 iPhone sold, ergo overall revenue would not decline as greatly as some are predicting, especially if Services revenue also increases (Arcade subscriptions and Apps).

    I’m not revising my revenue/eps estimates until Apple issues revised guidance numbers (which it will do once the quarter ends). I believe that will happen during the week of April 9.

    My take: This is how Chinese students get ahead in the age of COVID-19.

    Exactly, Asians (unlike Americans) will sacrifice for education.

    0
    March 11, 2020
  6. Aaron Belich said:
    Seattle Public Schools and the surrounding districts are shutting down… SPS is looking at a minimum of two weeks.

    0
    March 11, 2020
  7. Jerry Doyle said:
    I have several observations to make after reading the article and after watching the close of markets today.

    My first observation is if you noticed how Apple, after all the horrendous news today of WHO’s announcement that Covid-19 now is classified as a “pandemic,” that the markets have moved into Bear territory and how federal and state officials all are calling emergency meetings across the nation that Apple held STEADY in the mid $270s, above its previous lows of Monday in the upper $260s. Apple closed today at $275.43. As I write this post, Apple is up in after markets by $1.57 to $277.00. Folk, THAT SPEAKS VOLUMES about the strength of this company’s share price. The fundamentals of Apple are so solid that every time attempts were made to beat the share price downward someone jumped in quickly to grab the sell keeping the share price strengthen. The volume today was 58.47M vs. an average volume of 39.07M. Buyers today seem to be rushing into Apple because they know it is a solid company with excellent fundamentals, justified market capitalization, piles of cash with a positive trend in earnings going forward. It was apparent today that investors viewed Apple as a safe harbor during a violent market storm.

    The second observation is: “…. One source with direct knowledge of the matter said Apple recently ordered a 20% increase in production of the latest version of the iPad for the first half of this year, compared with the production forecast the company gave to its suppliers in January before the outbreak…”.

    A possibility exists that the unintended consequences from the outbreak of Covid-19 may produce revenues Apple initially did not anticipate, thus off-setting some initial loss in iPhone sales in China resulting from the Covid-19 advent.

    If this second observation is correct in China where Apple ordered a 20% increase in production of the latest version of the iPad for the first half of this year compared with production forecast the company gave to suppliers in January before the advent of Covid-19, then can we perhaps extrapolate that similar increases in production may come from other countries, such as the US, as schools and universities close their doors and move their courses online for students to take classes from home? This revelation certainly is something for us to mull.

    My parents raised me as a child to believe that every difficulty we encounter or every setback that we may confront in life that causes us discomfort or harm, also contains a potential for a beneficial outcome. It’s perhaps that trite expression we all have heard “Look for the silver lining!” I believe above that I may have observed today two silver linings for Apple. Things often are never as bad as we may perceive initially.

    Lastly, do you notice in the picture that while it does not show the normal crowds (that I always see when site visiting Apple stores in China) it shows a sparsely group of four Apple consumers. Only one of them is wearing a mask. I guess its because they are young folk. I found that observation interesting, too.

    2
    March 11, 2020
    • Jacob Feenstra said:
      @Jerry
      Great contribution. Thanks. As I said in recent posts, Apple is an extremely healthy company. What do people do in this crisis—they stay home, meaning less spending on many things, but using their digital devises. And obviously buying new ones for greater flexibility in use.
      On the AAPL stock though, I think it will get pulled down further by the general market. I would be surprised (but not unhappy) if it goes well below $250 in the weeks or months ahead.

      0
      March 11, 2020
      • Jerry Doyle said:
        @Jacob Feenstra: “… On the AAPL stock though, I think it will get pulled down further by the general market.”

        You may very well be correct. As I write this post, the Dow futures are down another 1,000 points because WS’s analysts believed the president’s speech tonight did too little to address the problem. The administration is not developing a comprehensive plan to deal with this issue in a way to soothe a nation that needs assurance.

        People literally are panicking. Utah Jazz center Rudy Gober tested positive for the coronavirus. What was the NBA’s Commissioner’s response to Rudy Gober testing positive? The NBA Commissioner suspended the entire 2019-2020 season indefinitely. Examples of this sort of behavior is being manifested everywhere. I question if such dramatic action of one player in an entire league coming down with the virus warranted canceling the entire season for all other players.

        0
        March 11, 2020
      • Jacob Feenstra said:
        I meant to write, I would be surprised if it does NOT go down well below $250…

        0
        March 11, 2020
  8. Gregg Thurman said:
    I continue to believe that, in the end, this “crisis” will not be near as bad as it is made out to be.

    There are now two COVID 19 vaccines being given to those infected under the “humanitarian” exception. I have no idea if these will prove effective, or how long, if they are, before being approved. Both were being touted by their developers as being corona virus specific vaccines. Does that include COVID 19, I don’t know. The fact is that regulatory agencies seem to be moving much faster than usual on this.

    Also read more on the populace at greatest risk. They are those over 70 with pre-existing respiratory impairments. The fatality rate among those under 70 and healthy seems to be less than 1%.

    0
    March 12, 2020
  9. Jacob Feenstra said:
    @Gregg That’s not totally correct, Gregg. It’s about 1% death rate of those under 60 (healthy or not—of the number of that age group). The death rate of those 60-69 is about 8% (healthy or not—of the number of that age group) and the death rate of those 70 and over is about 15% (healthy or not—of the number of that age group). Interestingly enough, no fatalities for those 0-9 years or age. God bless the children.

    Those are the figures for those both confirmed or suspected having COVID-19. The rates are higher, of course, for the confirmed cases. I don’t have all those numbers (only for the age group over 80: 22%). Those are all today’s numbers, which are really yesterday’s numbers.

    0
    March 12, 2020
    • Gregg Thurman said:
      @Jacob
      In lieu of anything definitive from any other source I can easily accept your numbers, which begs the question:

      Why all the fuss? I’m 73 and in one of the highest danger demographics, but it seems to me that we are repairing a Rolex with a sludge hammer.

      Could it be that modern medicine has increased our life expectancy to the point we – die? Many will say my point is cruel but the reality is that nobody leaves this world alive. Being upset that people are dying, as though it doesn’t happen in many different ways (in far greater numbers) is irrational. Hell, 25,000 people die every day (under normal circumstances) in China. That number is even higher in India.

      If the world’s economy drops into a severe recession because of the draconian measures being taken to prevent the spread of COVID-19, many more will die from lack of basic needs.

      I’ve posted on many a forum about the greatest danger to us all, that being planetary overpopulation. I think we’re seeing this in action today.

      COVID-19 (and all other coronaviruses, cancers, and ailments) is how mother nature culls the weak from the greater healthy herd. We embrace that philosophy in the way we manage our wildlife and forests, but being arrogant people (believing ourselves to be special) we reject the idea when it comes to us.

      Locking down entire countries because a demographic select people are getting sick and dying is an emotional reaction and totally irrational.

      As a people, we survived the plague, twice, without modern medicine or science to identify the cause. We can do absolutely nothing and survive this, and the converse is true, no matter what we do people will die. But cutting your nose off to spite your face is stupid.

      This won’t be the last contagion to cycle through the weak and it won’t be the deadliest of those to come. It’s time we face reality – death is inevitable and a natural part of living. Eternal life is a myth and we shouldn’t conduct ourselves believing it isn’t.

      0
      March 12, 2020

Leave a Reply