A ‘Set and Forget’ Investment and Negative Zero COVID

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Evercore’s still way positive on Apple, negative zero-COVID in China and fighting union with “union.”

Evercore Dubs Apple a ‘Set and Forget’ Investment

If there is one thing Evercore analyst Amit Daryanani likes, it’s a longterm investment in Apple shares. MarketWatch highlighted a note he wrote on Friday, wherein he named ticker symbol AAPL his firm’s top “set and forget” investment. Yes — he knows about the fiasco that is/was iPhone City. It does not concern him. Quoting his note:

While we understand investors are concerned about the near-term iPhone outlook given manufacturing disruption issues in China, we see any headwinds as transitory and investors should remain focused on the long-term opportunity…

I think he means opportunity that is Apple, since he outlines a couple of opportunities for the Cupertino-company. Quoting his note again:

We feel confident that Apple is working on AR/VR [augmented reality/virtual reality] products and this will likely be the next major hardware product… On the software side, Apple is making big moves in advertising and payments that are generally underappreciated by investors.

Daryanani sees a “high probability” that Apple will try the mixed-reality headset thing in the next six-to-twelve-months. If it follows a similar trajectory to Apple Watch, “it could contribute $18.1 billion to sales and 19 cents EPS [earnings per share] at scale,” according to the analyst. 

As for the payments part, the analyst says:

Apple’s interest in financial services makes a lot of sense, as a big part of their digital services strategies revolves around building ‘toll booths’ throughout the ecosystem…

The way he sees it, the fintech side of the tech giant could generate $11.6 billion in revenue by fiscal year 2026. If there’s one thing he likes, it’s a longterm investment in Apple. Daryanani has a positive rating on Apple shares. His price target on the shares is $190. 

‘iPhone City’ Lifts COVID Restrictions as China Abandons Zero-COVID Policies

Most COVID restrictions have been lifted at Foxconn’s iPhone City plant in Zhengzhou, China — so says a piece from 9to5Mac. The closed loop is apparently no loop now — with the plant’s point-to-point system ended. The piece explains that that was the system:

…in which workers were only allowed to move directly between their dormitory and place on the production line, with no other movement within the plant allowed.

That meant “no access to cafeteria and leisure facilities,” and — of course — no leaving. The change comes as China seems to have abandoned its zero-COVID restrictions. It also comes as the country faces “its biggest public health challenge since the start of the coronavirus pandemic,” according to CBS News. Quoting that report:

Nine days after the [Chinese] government abruptly abandoned its draconian “zero-COVID” policy, halting mandatory mass-testing and forcible quarantines, COVID-19 is once again spreading like wildfire across the vast country.

Interestingly, the World Health Organization says one has nothing to do with the other. Dr. Mike Ryan, head of emergency programs for the organization, says:

The explosion of cases in China is not due to the lifting of COVID restrictions… The explosion of cases in China had started long before any easing of the zero-COVID policy.

Sounds kind of crazy. Then you remember that the COVID outbreak at the iPhone City plant started when zero-COVID was still in full effect. 

If you’re wondering what all of this means for iPhone production, we will have to wait and see. 9to5Mac says:

It’s still likely to take considerable time to ramp up iPhone 14 Pro production to the point where supply balances with demand, but at least iPhone workers will have dramatically better working conditions. This, in turn, should help Foxconn recruit more staff to replace those who left.

CWA Accuses Apple of Using Fake Union to Fight Union

You know the phrase “fight fire with fire?” Apple stands accused of trying to “fight union with union.” We’ve heard talk throughout 2022 of Apple Retail locations considering moves to unionize. We’ve also heard accusations of anti-union maneuvering by the Cupertino-company. Now, a piece from 9to5Mac says the company has tried to head off unionization moves by organizing a “pseudo-union.” 

Highlighting a Bloomberg report, 9to5Mac says the Communication Workers of America (CWA) filed a complaint with the National Labor Relations Board last week, accusing Apple of “soliciting employees to join an employer-created / employer-dominated labor organization as a means of stifling union activities.” That is in addition to a (starting to become) standard charge of:

…holding mandatory anti-union meetings in which management falsely claimed the company would be legally barred from negotiating on certain topics if workers unionized.

The most recent complaint is said to center around activities at Apple’s Easton Town Center store in Columbus, Ohio. In an email to Bloomberg, a CWA exec said:

Creating a work group controlled by management is undemocratic and a clear attempt at union-busting… If management actually cared about workers having a voice on the job, they would direct them to Apple Retail Union/CWA which is run by workers, not bosses.

Apple did not offer comment for the Bloomberg report. 

Report: Apple Trying to Get Out of Office Lease in Moscow

Here’s something crazy sounding: Apple has a lease on an office in Russia out of which it is trying to get. The lease that is. Not Russia. Apple’s pretty much out of Russia, but let’s back up. 

Back in mid-2021, the Russian government passed laws requiring tech companies that wanted to do business in Russia to have offices in Russia. In early 2022, Russia invaded Ukraine, and suddenly those tech companies didn’t want to do business in Russia. But Apple had just moved into its Russia office about a month before the invasion. While the company has gotten its workers out, stopped product sales in Russia, and suspended most services there — they were one month into a three-year lease on an office that can’t have been cheap. It is within sight of the Kremlin, according to a piece from Apple Must.

It is so strange to me that the company is trying to terminate the lease. Why not just pay it out? Why not just keep sending checks once a month? Unless it’s about not wanting to give any money to Russia, in which case — why not stop paying? 

But… Apple Must says the Cupertino-company is “in talks” to close the office. 

All of this proves one thing: The world will never stop being weird.

Deadline: ‘Shantaram’ Canceled After One Season

The curse of the Apple TV+ series Shantaram has come to an end — in a way just as cursed as the rest of the series. One of the earliest titles picked up by Apple — long before Apple TV+ was announced, the show got a couple of episodes into filming before producers found out that the original writer and show-runner hadn’t gotten around to writing all of the episodes they were supposed to film. Then COVID-19 hit, hampering the search for a new writer, and slowing international shooting once they actually had scripts to shoot. 

Finally produced, it finally started running… and that seems to have been plenty for Apple. A piece from Deadline says the Cupertino-streamer has cancelled the show after its first (and now only) season. 

Working Apple-1 Numbered By Steve Jobs Sells for $442K

And finally today, checking the working Apple-1 price index… I told you a week or so ago that another one of those allegedly rare machines was going up for auction. What made this one special (besides the fact that it exists and works) is that it was hand-numbered by Apple co-founder and CEO Steve Jobs. 

RR Auction had expected the machine to fetch ~$375,000. It did better than that. A piece from AppleInsider says last week’s auction ended with the machine going for $442,000. 

Other Jobs paraphernalia up for bids included a NeXT computer brochure signed by Jobs — that went for $18,210. An early production model of an actual NeXT Computer (circa 1988) went for about a third of that, selling for just under $6,100. And getting a bit of love from bidders was current Apple CEO Tim Cook. AppleInsider says an Auburn University football signed by Mr. Cook sold for just under $5,700. 

Today on The Mac Observer’s Daily Observations Podcast

Today, on the Daily Observations podcast, TMO Managing Editor Jeff Butts and I talk the lifting of COVID restrictions at the iPhone City plant. Plus: Will Smith, AirDrop, and Continuity each pop out of the mailbag. That is all today on the Daily Observations Podcast from The Mac Observer.

One thought on “A ‘Set and Forget’ Investment and Negative Zero COVID

  • Ken:

    It’s not the COVID-19 restrictions or the lack thereof.

    It’s about the vaccines in-country. China’s vaccines have not been independently tested (unless you believe CCP stamp of approval connotes independence) and appear to underperform relative to those developed elsewhere (apart from the Sputnik vaccine developed by Russia, also not independently assessed – and notably eschewed by PP Himself).

    Given the population density, the limited vaccine efficacy and uncertain uptake, the ‘force of infection’ and transmission is likely high. Very high.

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