Apple (AAPL) Hits A Great Wall In China

Key Points:

• Apple (NASDAQ: AAPL) is struggling with their flagship iPhone in China.
• The new iPhone 16’s is selling poorly, while the iPhone 15 sold 10% less than the predecessor iPhone 14
• Apple’s struggles could signal the next big tech shift, on par with the mobile wave that made Apple earth’s most valuable company in the first place. Find out on the Next NVIDIA, and see which companies are set to dominate tomorrow.

Watch the Video:

Transcript:

[00:00:00] Doug McIntyre: So Apple has finally launched it’s a much anticipated iOS 18. I think they still call it a beta or something, but you can, and this is stupid, you can go to Apple’s website. You can sign up for it and then it gets downloaded to your phone. It’s like, why couldn’t they just do what they do usually? And it’s just, yeah, I don’t know.

[00:00:23] Doug McIntyre: But here’s the thing I think is really, really stupid. This works on the iPhone 15 max and pro. Yep. So why do I upgrade to the 16? I mean, what’s, what’s the purpose? If my phone, I mean, look, this phone here, this phone has been shattered, completely broken. So I can, I’m going to have to buy a new one, but if yours isn’t broken, why, why would you do it?

[00:00:53] Doug McIntyre: The upgrade is free.

[00:00:57] Lee Jackson: I don’t know. Gen Z peer pressure. I don’t know. It’s ridiculous. And again, who in the marketing arm at Apple, you know, didn’t go to Timmy Apple and say, uh, you realize the chip we have in the 15 will make the iOS 18 work in those phones as well. I mean, why didn’t they put in, you know, some sort of backdoor thing that would not allow that chip to work?

[00:01:23] Lee Jackson: Oh no, they went ahead and did it. And again, like you said, all you gotta do is you can go into the, your dealer, your, you know, at and t or Verizon or T-Mobile and just say Hi, you know, I want to trade in my phone. , you may be able to, if you change service, you may be able to get a free one.

[00:01:41] Doug McIntyre: Yeah. As a matter of fact, I, I went to the, you know, Verizon online store and the cost of an iPhone 15. Now that the 16 is out is incredibly cheap, you know, just people. So my advice to anybody would be. Listen, the 16, maybe is the camera any better? I don’t know, but no one knows. You can’t tell unless you’re Rembrandt and, uh, you know, the chip’s a little faster.

[00:02:10] Doug McIntyre: What do you, what do you need a fast chip for? The answer is, the answer is nothing.

[00:02:14] Lee Jackson: Yeah. I think like we discussed at one point when I read, you know, kind of the reviews of the new AI system and it’s, you know, it’s interesting what it can do, but basically. The reviewer was saying, well, it’s an upgrade over the incredibly bad Siri product that they have now, which is true.

[00:02:31] Lee Jackson: It’s just horrible AI. If it, if it can’t quickly search it on the internet, it just goes quiet.

[00:02:38] Doug McIntyre: Look, you know what, you know what Siri is? It’s a call center with 500, 000 people in Nebraska. We speak into it. They looked at the stuff up and send it back to you. There’s not, it’s not our official intelligence.

[00:02:50] Doug McIntyre: There’s a bunch of people. Listen, I wouldn’t rule that out. I wouldn’t, I wouldn’t rule it out. So we won’t get most of this stuff is not going to show up in the earnings. We’re about to see this week. It’s, it’s a fiscal for them, but it’s the third calendar quarter. There’ll be a little bit of the 16 there.

[00:03:09] Doug McIntyre: But not much,

[00:03:10] Doug McIntyre: We’re looking about waiting probably end of January before we know how the 16 and this iOS did.

[00:03:18] Lee Jackson: Yeah. And it’ll be really interesting to see because a lot of the preliminary numbers when the 16 dropped were not overwhelming and underperformed the 15, which underperformed the 14 by like 10%.

[00:03:31] Lee Jackson: And so what’s going to happen if people just say. Yeah. Times are a little bit tough. I need a new phone and I’ll go get the 15.

[00:03:42] Doug McIntyre: I’ll get the 15. Uh, okay. So here’s what I’m going to look for in the Q3 numbers that come out. This week, China, China, China in China, 950 million people have a smartphone in the United States.

[00:03:59] Doug McIntyre: It’s probably less than 300. Apple is not doing well in China. If you can’t do well in China, you can’t, you really, in this day and age, you can’t do well if you can’t do it. And that’s true in the EV business. Yep. I mean, the Volkswagen, I don’t know if you saw today, they’re laying off tens of thousands of people.

[00:04:19] Lee Jackson: And giving them a pay cut, which probably is not going to go over well.

[00:04:24] Doug McIntyre: There’s going to be a big strike, but they’re going to be a huge, you know, you’re, you’re talking now about a problem that is almost universal. If you look at the Starbucks earnings last week, same store sales, 16%. That was supposed to be their big market.

[00:04:41] Doug McIntyre: They talked about it for a decade and now they’ve got the local competition from Luckin coffee, who’s got right in store. So it’s, it’s true in coffee. It’s true in cars and now it’s true in smartphones. So I’m looking at the line. I’ll go immediately to the line. Uh, in that PDF they attach where you can see everything and look at how are they doing in China?

[00:05:05] Doug McIntyre: If they’re not doing well in China, that’s it.

[00:05:08] Lee Jackson: Yep. Well, I mean, it doesn’t end, you know, this iconic company, but it just slams the brakes on cause they got nothing else.

[00:05:16] Doug McIntyre: What it means is right. If you’re not a company, they’ve got this artificial intelligence, vision, pro, whatever it is, and that thing’s three grand, they’re not selling any of the information, which is a very good, uh, newsletter said they’re selling none of those.

[00:05:33] Doug McIntyre: They’re just cutting back production. So Apple doesn’t have any place to go at all. They’ve got to win in China. They got to win with the 16. If they don’t listen, you’re right. It’s still a great company, but the problem is, is that it’s a great company that’s got mediocre performance.

[00:05:48] Lee Jackson: Yeah. And it’s hit a wall because the ancillary products just, they don’t really move the needle, the, you know, the watches and, you know, the big computers and all that. I mean, they just don’t move the needle. And so, yeah, they, they need to win there for sure.

[00:06:02] Doug McIntyre: No, no. You gotta have, see that you just have to have watched that old people like me can look at.

[00:06:07] Lee Jackson: Yeah, yeah.

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