Lowered Targets and Strange Bedfellows

The Daily Observation Deck Feature

Targets drop on Apple shares, wheels are in motion for Apple manufacturing in India, and lots of new shows headed to Apple TV+. 

Targets Drop on Apple Shares

Both JP Morgan analyst Samik Chatterjee and Canaccord Genuity analyst T. Michael Walkley cut their 12-month price targets on Apple this week, and frankly — why wouldn’t they? The former had a price target of $190 on the shares, the latter a price target of $200. Apple spent the week trading in the mid-$130s, and there’s no solid reason to see $200 on the relatively near horizon. 

Their notes on the cuts were decidedly similar. Running part of his note, Apple 3.0 had JP Morgan’s Chatterjee saying that earnings for last quarter will disappoint, thanks to the supply constraints on iPhone 14 Pro and iPhone 14 Pro Max. Then there’s concern that demand for Apple gear will be low this quarter, given the troubled economy. Oh, that doesn’t usually hit Apple that hard, but — you know… worry… uncertainty… concern… Quoting Chatterjee’s note:

While high-end smartphones as well as other hardware products (e.g. Mac, iPads) have been more resilient in the recent past amidst the deterioration in fundamentals for the mid- to low-end of the hardware market, we expect to see moderating momentum in the demand drivers for Apple’s hardware portfolio as we start to see signs of the product cycle tailwinds beginning to fade (iPhone and Apple Watch in particular).

It’d be cool to know which signs, but that’s apparently not for us mere mortals. Chatterjee does maintain an “Overweight” rating on Apple shares. He dropped his price target $10 though, moving it from $190 to $180. 

Canaccord’s Take on Apple Valuation

As for Canaccord’s T-Money, Apple 3.0 had his note saying:

While we believe demand is solid and some of the lost December quarter sales will help March results, we anticipate an overall sluggish start to F2023 (…) With the overall concerning macro backdrop for consumer spending on higher-priced devices, we have reduced our overall hardware estimates for F2023 and F2024 with most of the reductions stemming from our lowered iPad and Mac estimates.

At the same time, Walkley lists a number of factors working in Apple’s favor. They include:

  • An overall installed base of over 1.8B devices
  • An installed base of over 1B iPhones
  • A 5G upgrade cycle that’s still underway
  • Continued anticipated growth for Apple’s Services segment
  • A pile of cash $49B high
  • And continued repurchase of its own shares

But — you know, the times are what they are. Walkley keeps a “Buy” rating on Apple shares. He’s cut Canaccord’s price target on the shares from $200 to $170.

Report: Chinese iPhone Component Suppliers Approved for Indian Expansion

Plans to grow Apple manufacturing in India seem to be going well. For now, anyway. Bloomberg and the South China Morning Post say several Chinese suppliers have been given the go-ahead to expand to the subcontinent. According to the report:

More than a dozen of Apple’s Chinese suppliers are receiving initial clearance by India to expand in the country, helping the tech giant’s efforts to diversify its assembly network beyond China.

The piece says about 14 of the 17 suppliers Apple listed as key to iPhone production have received approval. At least that’s the rumor. Apple, India’s technology ministry, and suppliers mentioned in the report did not respond to requests for comment.

Now, there is a sentence in the piece that I personally find unsettling. According to Bloomberg, “India largely cut off Chinese companies from its tech economy after the countries’ troops clashed violently on their long-disputed border in 2020.” 

Does Apple’s manufacturing in India hinge on still getting parts from Chinese companies and peace between China and India? According to Bloomberg:

Apple and other US electronics brands are seeking to reduce their reliance on China after trade restrictions and Covid-related production disruptions laid bare the risks of too much concentration in one country. The clearances signal that India is allowing more Chinese companies in to build out its tech manufacturing sector, even as political tensions between the Asian neighbors have intensified.


Apple Agrees to Labor Practices Audit

From whatever’s going on there to “what the heck is going on here?” Engadget ran a piece earlier this week that said Apple will let a third-party firm audit its labor practices. This after the Cupertino-company was accused by employees and regulators of employing union-busting tactics to stop worker organization. “In a filing with the Securities and Exchange Commission ahead of its annual shareholders meeting,” Engadget says:

…Apple said it would carry out an assessment of its “efforts to comply with its Human Rights Policy as it relates to workers’ freedom of association and collective bargaining rights in the United States by the end of calendar year 2023.”

While bad press may have played a part, money seems to have done a lot of the talking here. According to the report, Apple’s cooperation came in the wake of a call for assessment by a group of investors. The group, which controls ~$7B worth of Apple shares put forth a shareholder proposal on the matter. An official with the city of New York involved with the call for assessment says Apple agreed to the audit, as long as the investors agreed to pull the proposal. 

Costs of Some Apple Hardware Rise in UK and Europe

Obscured by Wednesday’s HomePod news — increases in some areas on the price for HomePod mini. Apple wowed the audiophonic world on Wednesday by returning the larger-and-in-charger smart speaker to market, to market. Up for order now, the new unit will go for $299 in the U.S. and £299 in the U.K. 

I bring up the U.K. price because that is one of the places the price for HomePod mini quietly edged up. 9to5Mac says the cost for the diminutive speaker has moved from £89 to £99. Other price increases have also been spotted. Tweets from Italy and France show the HomePod mini’s price rising from €99 to €109.

Just a sound decision on Apple’s part? No. 9to5Mac says prices for other hardware have also increased. The nine-to-fivers have the site The Apple Post pointing to increases for the iMac as well. In the UK, prices for those went up midweek by £150. 

9to5Mac sees nothing odd about the decision. In fact, it almost doesn’t look like a decision. More like, math. The piece points out “that UK and EU prices include sales tax (VAT),” where US prices do not. The way 9to5Mac sees it:

The direct pre-tax comparison on the HomePod mini would be £82.50 ($101.85) in the UK against an almost identical $99 in the US. The price increase, then, just brings the UK back in line with US pricing after currency movements.

Still costs £10 more than it did Tuesday, though. Sort of stinks for his majesty’s subjects and people in Europe looking to buy today. 

Apple Music Classical References Spotted in iOS 16.3 RC

Though they missed 2022, Apple still seems to be working on whatever it’s turning Primephonic into. We talked bout this one in mid-December. As a reminder, Apple bought the classical music service Primephonic in August 2021. It shut the service down a couple of weeks later, though it said it would “launch a dedicated classical music app” sometime the following year. 

Then, we said “Happy New Year.” Then, we said it again — that second time without a Primephonic replacement. Now, a piece from AppleInsider says, work still looks to be underway. A replacement is not expected with next week’s release of iOS 16.3. However, the piece says snippets of code in this week’s 16.3 release candidate show references to “Apple Music Classical,” thought, for some reason, to be Apple’s classical music replacement. 

Apple TV+ Announces Slate of Shows Through Spring

Tons of new content coming soon to Apple TV+, assuming it’s working again. Lots of sites ran posts Thursday night saying that firing up Apple’s streaming video service was a no-go. According to a piece from Cult of Mac:

Around 5 p.m. PST, a message in the Apple TV app read: “Content Unavailable. There’s a problem loading this content. If this continues, check your Internet connection.” On Macs, the message appeared in the Watch Now, Apple TV+ and Store tabs of Apple’s TV app.

Strange and relatively short lived. Apple’s System Status page says the issue was resolved by 6:45 p.m. PST. Sorry about your primetime, people back east.

Anyway — Tons of new content coming to Apple TV+. The Cupertino-streamer issued a press release this week, listing off titles and premier dates, including:

  • “Truth Be Told” season three hits today — Jan. 20
  • “Shape Island” premieres today — Jan. 20
  • “Shrinking” premieres a week from today — Jan. 27
  • “Dear Edward” starts on Friday, Feb. 3
  • “Hello Tomorrow!” hits two-weeks later — Friday, Feb. 17
  • Thriller series “Liaison” premieres Friday, Feb. 24
  • Eugene Levy’s “The Reluctant Traveler” lands the same day — Feb. 24
  • The climate change anthology “Extrapolations” premiers Friday, March 17
  • The music competition “My Kind of Country” hits March 24
  • Season two of the musical comedy “Schmigadoon!” starts April 7
  • Mystery series “The Last Thing He Told Me” begins April 14
  • Environmental kids’ series “Jane” hits the same day — Friday, April 14
  • Season two of “The Afterparty” starts April 28
  • The NYC drama “City on Fire” premiers May 12
  • “The Big Door Prize” gets a vague Spring 2023 time frame
  • Season two of “Swagger” begins sometime in June

The End of ‘Ted Lasso’ Draws Nigh

And finally — a series I’m both looking forward to and dreading… the third (and likely final) season of “Ted Lasso” is set for sometime this spring. The picture for that one looks dramatic and sad. Part of me can’t wait. Part of me never wants to see it.

I’ll be fine.

There are pictures, descriptions, cast-members, and more for all of the series in Apple’s press release. Though if you want to see the shows in action, you’ll want to head to YouTube. AppleInsider ran a piece this week highlighting five trailers from Apple TV+. Getting the sound+vision vibe were  “Shrinking,” “Dear Edward,” “The Reluctant Traveler,” “The Big Door Prize,” and “Hello Tomorrow!

That last one could give “Schmigadoon!” a run for the title of “most stylized.” CNET describes the trailer for “Hello Tomorrow!” as “‘Mad Men’ with jetpacks.”

View the trailers at your leisure. Each lives now on YouTube.

Today on The Mac Observer’s Daily Observations Podcast

India has given Chinese companies a green light that should help Apple grow manufacturing on the subcontinent. But, if it requires Chinese companies, is diversification into India really diversification? TMO Managing Editor Jeff Butts and I puzzle over that. Plus — a how-to on making use of HomePod’s temp and humidity sensors. hat’s all today on the Daily Observations Podcast from The Mac Observer.

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