Bloomberg: Apple 5G iPhones still on schedule to launch this fall

But that’s largely because mass production isn’t due to begin until May.

From Mark Gurman and Debby Wu’s “Apple’s Supply Chain Woes Linger Even as China Recovers” posted on Bloomberg News:

Apple kept its business rolling through the coronavirus pandemic this week by launching a new iPad Pro and two new Macs. But that doesn’t mean its supply chain is in the clear.

Deliveries of the new products will begin arriving on doorsteps next week. However, production of those devices likely started in early January, before the worst effects of China’s virus lockdown in February, according to people familiar with Apple’s supply chain.

With a fresh round of supplier factory closures enforced by Malaysia, and the virus disrupting operations in much of the rest of the world, the iPhone maker’s supply chain has not fully recovered yet.

Apple’s next flagship iPhones, with 5G wireless capabilities, are still on schedule to launch in the fall, although that’s partly because mass production isn’t due to begin until May, said the people.

My take: From where I sit, still waiting for the tsunami to hit, May doesn’t seem that far away.

29 Comments

  1. Jerry Doyle said:
    This article shows clearly that a diversified global supply chain is no match for a pandemic.

    0
    March 20, 2020
    • Dan Scropos said:
      That’s a relative statement, Jerry. He/she who has the most diversified supply chain and best contingency plans will ultimately make out better than all of the others. Apple’s revenue destruction and deferred revenue will be a softer blow than that of others.

      Apple has the strongest supply chain management team in the world. They are more prepared than anyone. For example, “injured” supply chain partners may need more than usual upfront cash infusions. Guess who has ~$200 billion in cash? Do they leverage that into a discount? Perhaps. More importantly, though, they have all the tools and relationships across the world to keep their products shipping. Now, more than ever, Tim Cook’s move into Services is the high margin revenue generator needed to soften near term hardware shortfalls.

      2
      March 20, 2020
  2. David Baraff said:
    Ironic: where are all the people who screamed Apple was idiotic for making everything in China rather than the US?

    I think China will be paralyzed, manufacturing wise, for a much shorter period of time than the US.

    How is it that the US is warning about half of California getting COVID-19, I.e. 25. million cases, when China only has 100,000 reported cases so far? Is it just testing vs actual infections?

    2
    March 20, 2020
  3. Jerry Doyle said:
    People are being affected differently. There is no doubt many are being devastated economically by all this closing. My heart goes out to them. Some seem, not so. Throughout the week there has been caravans of RVs and trucks pulling boats heading out of town. I only can assume logically they are heading to isolated places for camping and fishing. I thought, though, folk were “home schooling” and telecommuting.

    I too, am puzzled that half of Californians are going to get Covid-19. Governor Gavin Newsom asked Congress for $1 billion in federal funds to support California’s medical response to the coronavirus. In a letter to President Trump, Newsom wrote that the state predicts more than half of Californians will become infected with COVID-19, or 25.5 million people, over an eight week period.

    Meanwhile, I am watching from my quarantine quarters caravans leaving town. There is so much craziness. Students partying in Florida when the order is “quarantine.” With all its national parks (now opened free) I wonder how many Californians are heading to them?

    0
    March 20, 2020
  4. David Baraff said:
    I wish I understood that figure. I live in the Bay Area, but through a bit of luck, the very last time me and my family was in a group of people (more than 10) was March 9th. So we’re already 11 days removed from having any contact even though we’re on day 4 now of stay-at-home. If California does (largely) observe the stay at home for another 17 days, not seeing how you could get even close to half the population having it, because I assume that a 21 day buffer period largely wipes it out. Then it has to ramp back up again from hopefully very low numbers?

    Maybe half the state assumes we don’t actually do all this. Doesn’t make a lot of sense to me.

    People partying in Florida does really piss me off.

    1
    March 20, 2020
    • Kirk DeBernardi said:
      I too live in the Bay Area AND work at a grocery store. A bit of the frontline “essential”.

      Governor Gavin Newsom somehow came up with this “worst case” scenario, but I personally think it’s unnecessarily extreme — just as it seems like states, country and the world-at-large are extreme concurring to commit economic suicide.

      Consider this thought; what if all of these sicknesses and deaths didn’t have a virus name/identity attached to them, yet were just added numbers on the everyday stack of people dying from flu like symptoms, pneumonia and other respiratory problems. Would we even have noticed? Would we have panicked? No doubt it’s an additive number, but would that increased number be an alarming one. Much akin to any odd increase in automobile deaths year-over-year would be, for example. Would that be as alarming to us or not?

      I understand that I risk being “naive to numbers” to even assume this notion, but are the numbers that grandiose of an increase?

      In other words how many times have people been sick enough to require hospitalization ending in death that just simply didn’t have a virus name attached to it, but on death certificates we’re deemed as death due to “accute natural respiratory causes”.

      Get my drift? If this virus didn’t have a name attached to it, would the increase in deaths cause us such worldwide wide alarm?

      New York’s Governor Cuomo now wants the same.

      I really think the distancing — the comprehensive washing of the hands — the suspension of gatherings, etc. will probably ALONE have the desired effect that’s needed. But the “shelter in place” concept is just going overboard, AND when does it properly end?

      When we’re economically in ICU?

      3
      March 20, 2020
      • Aaron Belich said:
        Kirk… that’s kind of the point of WHO and national departments of Health. To catch these diseases before they do turn into Bubonic Plague / Spanish Flu / H1N1. It’s human nature to put a name on something, and a huge part of science and the study of what’s around us.

        https://en.m.wikipedia.org/wiki/List_of_epidemics

        What happens when you let science go? You will default to the madness of religious fervor and the power hungry craziness that can result from it.

        So no. Please don’t put your head in the sand and claim ignorance. It only sets back human society and civilization. Everyone should do their part. Be safe. Be kind.

        2
        March 20, 2020
        • Kirk DeBernardi said:
          @ Aaron B. —

          I do my level best to not be a “stick my head in the sand” kind of fellow and I wholly embrace the need and logic of the applied sciences already critical to our world’s survival.

          I guess my plea here is crying out for a better balance of damage control, both that of health and economics.

          Given the primary mode of transmission is exhaled droplets, does not the social distancing — handwashing/sanitizing — gathering suspension — travel restrictions efforts all amount enough for a bulwark of what’s truly needed to arrest the spread until a vaccine/cure comes along — which assuredly will come along?

          I’d love to see what blessings just the simple fervor of great handwashing etiquette will bring our civilization.

          The world has suffered already with a viral noose being placed around our collective neck.

          Need we be the ones to pull it tighter?

          Where’s the proper balance?

          2
          March 20, 2020
          • Kirk DeBernardi said:
            BTW — Thanks for the link.

            1
            March 20, 2020
      • Jerry Doyle said:
        @Kirk DeBernardi: A concern of mine is how all the attention to the virus has impacted negatively needed medical attention to individuals with other serious physical issues. I know there has been rescheduled surgeries, canceled doctors’ appointments and delayed medical examinations relative to other physical complaints.

        Then I read last evening a news article about a frantic cancer patient whose scheduled surgery was delayed to the virus restrictive policies. So what I am hearing from some peers must be correct about “their” scheduled medical exams being delayed.

        It seems to me that an unintended consequence from all the attention to the virus may lead to increase deaths and illnesses among others. I am empathetic to what Kirk is denoting in his post.

        2
        March 20, 2020
      • Gregg Thurman said:
        I’m with you Kirk. COVID-19 is spread by physical contact and exhaled droplets. Washing hands is good, but I don’t hear anyone advising the wearing of masks. Where’s the emergency funding for those, or the release of government stockpiles?

        Me? I’ve started wearing paint masks. They are plenty good enough for the kind of droplets that are contagious.

        Nearly 3 months into this and worldwide deaths (overwhelmingly amongst an easily identifiable demographic) are a pittance compared to natural death rates. In China alone the average death rate (from all causes) is 25,000/day.

        From Wikipedia:

        As of 2020, for instance, the CIA estimates that the crude death rate globally will be 7.7 deaths per 1,000 persons in a population.

        Ergo, of 6.6 billion populace 140 thousand will die daily from all causes. So far, and yes the rate is increasing rapidly, after nearly 3 months there have been about 10,000 deaths.

        We are hugely distant from the natural rate.

        1
        March 20, 2020
          • Gregg Thurman said:
            https://www.zdnet.com/article/graph-theory-suggests-covid-19-might-be-a-small-world-after-all/

            This would explain why COVID-19 spread so quickly in northern Italy. Can’t find the link right now, but one official with WHO pointed out last week that COVID-19 was spreading fastest among family (network) members.

            As members of a network are exposed, and survive, the number within the network susceptible to COVID-19 declines, limiting future growth.

            My own extrapolation of the article is that the more below age ~65 (death rate less than 1%) that are exposed the faster COVID-19 retreats into background noise.

            Thanks for the link David. Very informative.

            0
            March 20, 2020
    • John Konopka said:
      I listened to Gavin’s press conference last night. I believe that number came from epidemiologists studying our population in California. If no action was taken that was the number sick that we could eventually expect. He explained that with the actions we are taking in California the goal is to see far fewer infections.

      China took very strict measures and the infection rate in Wuhan was held to about 1%. With aggressive testing and a quarantine for anyone found infected they hope to prevent any flare up of the disease.

      In a week or two or three we should see test kits available here at the rate of more than five million a week. By the end of April we could be testing more than a million people a day. The point would be to find those infected and have them stay isolated for a few weeks. This is especially true for those showing no symptoms.

      If you know everyone who has the virus and if you keep those people isolated for two or three weeks that stops the disease in its tracks.

      0
      March 20, 2020
  5. Fred Stein said:
    Shame on Bloomberg’s co-authors. No one can predict the fall iPhone launch

    Apple’s fall iPhone production ramps are miracles.

    There is no need to panic. With the virus spreading at 4% daily*, we need to keep the restrictions in place. That has economic impact and will impact Apple’s complex supply chain.

    * 6% if we remove China and South Korea, where the virus seems to be contained for now.

    5
    March 20, 2020
    • David Emery said:
      I have very little confidence in attempts to try to integrate data from all these disparate sources. Each is sampling data under different regimes. And “no new infections in Wuhan” seems statistically unlikely.

      The best we can do, I think, is observe the rate of change (1st derivative) in each sample space (national reports).

      4
      March 20, 2020
      • Jerry Doyle said:
        @David Emery: “… And ‘no new infections in Wuhan’ seems statistically unlikely.”

        You called that correctly. Since when can we rely fully on data from the CCP, especially relative to this flu outbreak originated from Wuhan.

        0
        March 20, 2020
  6. David Baraff said:
    On a completely different topic (and looking for shreds of silver linings amidst all this badness), I have to say that the massively increased volatility in AAPL is making for some crazy options plays.

    Yesterday, mid-day, with the price of AAPL around $249, I sold covered calls that expire *today* with a strike price of $260. For $2.40 / share!

    That seems insane. I sold something yesterday for $2.40 / share that was incredibly likely to expire completely worthless one day later? (And frankly if the price miraculously shoots up about $262.4 today and my shares get called away, so be it. Seems a good price to gain some safety given where the stock has been.)

    I plan on checking the price again next Thursday, and if volatility is causing the options to again be sky-high, I will rinse and repeat.

    3
    March 20, 2020
  7. Jerry Doyle said:
    Maybe I am overly optimistic, but I keep seeing attempts to drive Apple below $240 a share but Apple just keeps pushing back. I am cautiously optimistic that Apple has tested its lows and that low area is $240.

    3
    March 20, 2020
    • Gregg Thurman said:
      Right on Jerry.

      To me the most important stock metric of them all is the intraday low. This week’s intraday low seems to have stabilized in the $238/$240 range.

      Any dip to that level and I’m a buyer, using my deep in the money Call Spread strategy.

      0
      March 20, 2020

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