2023 is turning into an uneventful year for Apple
For years, Apple (NASDAQ:AAPL) has yearned for control over its product manufacturing. Cut out the middleman, and watch profits increase.
And that’s exactly what Apple’s doing. The major breakup came in 2020 when Apple ended a 15-year partnership with Intel — switching to its own chips in newer MacBooks.
But power is addictive — and Tim Cook’s starvin’.
Yesterday, news came out that Apple plans to drop more suppliers:
- Samsung and LG: Starting in 2024, Apple will use its custom-made displays on its mobile devices — cutting off the tech giants.
- Broadcom and Qualcomm: Apple may cut ties with the chipmakers as it launches its custom 5G modem chip for the iPhone in 2025.
Other developments signal a slower year ahead for Apple. Decreasing consumer demand has been a major topic amongst retailers — but now it’s making its way to the top.
- First, it was supply issues. China’s COVID-19 restrictions in 2022 hurt iPhone 14 supply — impacting the sales of its largest source of revenue ****(~50%).
- Now, it’s turning into a demand problem. Apple lowered its production target after demand turned out to be lower than expected.
What else is slowing? The Apple App Store has become a major part of Apple’s business — making up 21% of its total revenue. Yesterday, Apple released its App Store numbers which showed growth declining from 27% in 2021 to 14% in 2022.
But Apple enthusiasts may have a new toy to play with this year….
- Per Bloomberg, Apple pulled resources from other departments into its mixed-reality headset — which is planned to launch in 2023 (after multiple delays).
- This could lead to minimal upgrades from other major products, including the MacBook, iPad, and other accessories.
Barclays analysts cut $APPL’s price target from $144 to $133 following weakening demand — over problems mentioned above.