our theme Apple Component Supplier InventoryA stock index that includes the diverse companies that supply components for Apple’s devices is expected to drop about 25% in 2022, beating Apple’s stock, which fell 29%.
While the decline over the past year has been largely driven by rising interest rates and a broader selloff in tech stocks, we’ve also seen disruptions in Apple’s iPhone supply chain. China has relaxed Covid-19-related restrictions, but cases have surged in the country in recent weeks, which could temporarily affect production. Protests are also taking place at Apple’s contract manufacturer Foxconn’s factory in Zhengzhou, which produces the majority of the devices. Apple will see stronger demand compared to the iPhone 14 – during the holiday season.
Additionally, there are concerns about margins for Apple’s component suppliers. Apple has kept prices of its new flagship iPhones basically flat for the past five years despite rising inflation. For reference, the 2022 flagship iPhone 14 Pro is priced starting at $1000, the same as the 2017 iPhone X. Despite flat pricing, Apple is actually improving gross margins. This can lead to pricing and margin pressure for Apple’s component vendors.
These are negative developments for Apple’s suppliers, but there may also be some trends that help our theme stock. It may help Apple’s suppliers who are focused on semiconductors that For example, an Android device vendor is looking to bring more of his 5G capabilities into its mid-range and low-end models. Apple’s iPhone model mix is also increasingly skewed toward premium devices, which can be seen as a positive trend for Apple’s suppliers as well.
On our subject, Qorvo, a semiconductor vendor best known for supplying radio frequency components, ultra-wideband and WiFi solutions for consumer electronics, was the worst performer, trading at around 43% over the past year. % fell.Jabiru on the other side
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