Emily Chang, Apple, Sami Khan discussed on BTV Simulcast


Power collide in Silicon Valley and beyond this is Bloomberg technology with Emily Chang I'm Emily Chang in San Francisco and this is Bloomberg technology coming up in the next hour The apple falls Why demand is slowing for apple's most popular device Plus Sami Khan keeps popping up around the world but there's a new treatment that could fight it I'll talk to the maker behind that promising drug And shoppers are scooping up all those one of a kind gifts as we speak but will they make it on time The CEO of Etsy joins me to talk about how he's making sure everyone has a very happy holiday We're going to get to all of that in a moment but first let's get a look at the markets and it was another volatile day are at ludlow with us now Ed what did we see Yes we went from the biggest two day decline on U.S. equity since October 2020 to the biggest one day jump in the S&P 500 since October of this year and investors have a lot to take on board right volatility associated with oma cron and what the fed might do But if there was a pocket of weakness or underperformance it was in technology shares You see that reflected in the NASDAQ 100 a very tech heavy index and particularly in the NYC fang plus index which was just in positive territory on Thursday a lot of that of course to do with Apple which will come onto and on a day where we were really in risk on mode there was selling in cryptocurrencies pretty much across the board which was interesting Some other really important news of course came around U.S. listed Chinese companies And I'm looking at the NASDAQ golden dragon index which at one point was down by the most since September but paired back some of those losses to trade at its lowest level since May of course the SEC coming out saying it has a plan to look at these Chinese companies that are listed in America and think about whether they fit the rules the parameters of what is required to be a foreign company listed in the United States Of course we've got to talk about Apple You talked about it in the intro of the show Notifying according to sources it supplies that demand is disappearing It's not quite there And what we saw from some of the apple's key suppliers was it wasn't just Apple under pain but if you looked at some of its suppliers in Asia for example LG intake LG entertainment gets more than 50% of its revenue from Apple and it fell more than 8% in Korean trading You saw that in Europe as well as ST micro and infinity So a lot to unpack there because we went from thinking well Apple can't make enough iPhones because of supply constraints to no one wants to buy them anyway That's a hard one to follow An interesting that they're saying demand is dropping now at a time when you think it would be spiking ahead of the holidays I mean what does that say about the iPhone Yeah about losing patience right I don't know about you I've been doing some holiday shopping recently You got into any website Any ecommerce platform and you look out of stock We know from the Adobe data out of stock messages up 260% from the same period in 2019 So there is evidence to suggest that you log in on to buy something It's not there Don't even try and buy it Don't wait for it for sure Right Always get those questions about whether folks buying it should wait or not wait and you know case by case basis right I want to get to Bloomberg's Mark garment now who's with us and has been reporting on this story Mark what can you tell us Why is demand for the iPhone falling now of all times Yeah I think that this is a combination of factors One we have a decrease in consumer spending We see things like gas and food and other things that you want to buy on a normal basis increase in people who are trying to hold on to their money We see it's been a while since the last stimulus check So there are issues here that are preventing people from having that extra cash to buy a new iPhone right On top of that the iPhone 13 it's more of a modest upgrade over the iPhone 12 and the iPhone 11 There's not a whole lot of new here But that was sort of covered up by long lead times long lines at Apple retail stores supply chain issues as well as very aggressive rebates and discount deals from both Apple and the carriers which made buying these new iPhones even with minor changes a lot easier to swallow than in years past So why are people holding off buying next year's iPhone you know I mean I'm sure you get the question all the time Should I wait or should I buy it now I mean I think it always depends the answer to that question It depends on who you are what you need the device for how old your phone is There's so many factors It's not a very black or white answer I think personally if you have an iPhone 12 there's really little reason to upgrade to the iPhone 13 I personally did it because I got the phone at no cost because of the rebate deals offered between Apple and the carriers Again even if you're coming from an iPhone 11 if you didn't think the iPhone 12 was worth the upgrade from the 11 and there's really no reason to upgrade from an iPhone 11 to a 13 But if you have an iPhone XS and iPhone X or earlier I think it's a really solid upgrade for you I also think there's a lot of people holding off to the iPhone 14 Everyone knows the way these Apple cycles and patterns with device upgrades work so you know that if there's a modest upgrade the following year is going to be much larger changes So I think people are holding off for the iPhone 14 as well There's been a lot of discussion foldable iPhones So I think it's a combination of everything going on with the world as well as this being a modest device upgrade and some of those carrier rebates starting to run out What does this mean for the overall Apple earnings and holiday story Well the best thing I can tell you is what Tim Cook has already said He said they're going to have a year over year increase in revenue for Q one That means they're going to top a 111.4 billion Analysts are looking for numbers around a 116 to a 117 billion for the quarter And I think Tim Cook wouldn't have said that number on the fourth quarter earnings call if he wasn't more than confident that this was going to happen So I think regardless of the demand regardless of the supply we have to go with what Tim Cook said he's expecting and he's expecting growth year over year At the same time that growth may not be as big as what apple expected They already said $6 billion decline from what they could have made in Q one is to be expected because of the supply chain issues Now we know there's some demand that fits into that picture as well as one of the reasons why this quarter may be very strong but not as strong as it potentially could have been Okay Bloomberg smart gurman Thank you as always and do not forget You can subscribe to mark's weekly power.

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