November 2017 — Apple is Looking Good: My Thoughts

Now that Apple is a huge company, it is hard to get the kind of %-growth they had in their go-go years. Nevertheless, Apple stock outperformed by a large margin this year. Rumors of the iPhone X and the idea of a Super Cycle of iPhone sales drove that growth. The iPhone X, though 6 weeks late, and the A11 Bionic tech also in the iPhone 8 are exciting millions. Sales figures aren’t in yet, but glowing iPhone X reviews especially may deliver excellent results even with this new configuration, X shortages and $200 premium. Apple’s Q1 forecast, which is usually very conservative, is for XX% growth.

The beauty is that this should-be lumbering beast can still deliver breakthrough technology gives new life to a 10-year-old product category.

The A11 Bionic System on a Chip

The Brains of the iPhone intrigues. Inside there are 5 custom silicon engines. The most valuable is a new custom graphics processor (GPU) which includes a new Neural Engine responsible for AI and graphics. This is where Apple’s ability to design its own silicon drives competitive advantage.

The iPhone X Gives Apple a Way to get Cutting Edge technology out the door sooner

  • One disadvantage Apple has in iPhone innovation is the sheer scale of iPhone production. Leading edge tech, isn’t immediately available at the tremendous scale Apple needs for the iPhone as we’ve known it. Perhaps because it was designed in-house, the A11 Bionic SOC was able to be delivered at scale so was included in both the iPhone 8 and X. This puts even the iPhone 8 in the lead in the most important category in mobile phones.
  • If you raise the price $200 like Apple did with the iPhone X, you should reduce demand to a point where Apple can introduce leading tech a year earlier. Apple was still 6 weeks late in delivering iPhone X. That’s not ideal, so perhaps next year there will be another iPhone X or X2 priced at a premium and delivered alongside the iPhone 8s. If you don’t reduce demand, then there may be shortages as we are seeing now or worse. But then if you priced a

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