Apple stock takes another hit, as Piper Sandler downgrades to neutral

Nvidia benefits enormously from CUDA lock-in and they are squeezing every dollar of profit out of that lock-in that they can. But if AMD (or Intel or others) can break that lock-in, then nvidia stock will plummet. 

blastdoor said:

Nvidia benefits enormously from CUDA lock-in and they are squeezing every dollar of profit out of that lock-in that they can. But if AMD (or Intel or others) can break that lock-in, then nvidia stock will plummet. 

Suppose there were a company with first rate CPU, GPU, OS, and language/compiler teams. Suppose that company was already the most profitable in the world. What would happen if that company invested in creating a soup to nuts AI training and inference platform? Seems like a nightmare scenario for Nvidia. I wonder if it will happen….

That isn't an impossibility but it takes far more than that and Apple hasn't really pushed that avenue. Nor does it have the technical assets (patents, knowhow or employee base). 

Personally, I think it was a mistake but they probably just underestimated the short term impact of AI. Now it's pushing hard to convince everyone that it isn't behind. 

The problem is that Apple has only really been interested in margins and chasing those (mainly through iPhone) has kept it busy. 

Apple is already having a tough time producing a modem and again it was a huge strategic mistake to get into a worldwide spat with Qualcomm with only one alternative supplier (which didn't deliver). 

As the smart car market booms with state of the art vehicles hitting the showrooms, Apple has yet to produce anything. 

Currently Apple is entrenched in the consumer electronics realm and trying to branch into services. 

R&D has only recently seen a jump of note. 

It can be reasonably argued that Apple is spreading itself a little thin by taking on modem and Wi-Fi efforts, plus the rumoured car and the end point software focus of AI. 

Although I think it would be good for them to get into the back-end side of AI and cellular, it might be biting off more than it can chew and its now quite late in the day.

Late is better than never though and there is time ahead. 

CUDA is a major platform but isn't alone and when Huawei announced its Ascend product stack in 2018 it was a shot across the Nvidia bows (without forgetting the importance of Google, Meta, etc) but then Trump played his sanctions card and Nvidia got a breather (of sorts). The problem was that sanctions didn't only slow Huawei down (short term) but boomeranged back onto Nvidia and cut it off from one of its biggest markets (China). 

The nightmare scenario was now not only in the imagination. 

Nvidia responded by trying to lower performance of its hardware, specifically for the Chinese market, and then saw sanctions strengthened to nix that.

Top officials from SIA, ASML and Nvidia have constantly proclaimed sanctions as 'the wrong way' and that it would force China to do it itself. 

That is happening but the genie has long left the bottle and is not going back. 

Only now has the US back-tracked an inch or two and negotiated with Nvidia a set of limits which will at least allow it to continue some sales to China. Just a few weeks ago someone in the US administration claimed that for every attempt by Nvidia to wriggle around sanctions, there would be new changes in sanctions. That line seems to have ceased. 

Apple wouldn't be able to sell anything cutting edge to China/Russia (assuming it could produce a full stack solution) and that would leave it to fight against Nvidia, Google, Meta etc (plus Huawei) in the remaining markets. 

That would be difficult. 

I still think they should be exploring the avenue because it has been known for a very long time, what is coming (the convergence of AI, ICT and XR) . The problem is that Apple isn't really 'there' on key strategic moves, but like I said, we shouldn't be surprised as it is a CE company seeking margins. 

On the stock gloom and doom we will see the usual subjects and random wackiness but under the madness there are some valid points, not least economic headwinds. 

Even the Daily Mail wants a piece of the action! LOL

https://www.dailymail.co.uk/sciencetech/article-12922173/The-beginning-end-iPhone-Apple-shares-slump-4-lackluster-iPhone-15-sales-experts-claim-smartphones-formulaic-warn-customers-jumping-ship-rivals-Samsung-Huawei.html

Perhaps it's just the silly season but over the last 48 hours, and following a report by TechInsights, the web has exploded with claims that HarmonyOS will overtake iOS in China this year, marking a setback for both Google and Apple (assuming that it actually happens). https://www.gizchina.com/2024/01/04/huawei-harmonyos-next-mobile-os/

Factors specifically affecting Apple are a difficult first-half handset market, and signs of RAM and Flash chip pricing increasing.

Could someone tell me what "handset" Apple makes? That's the old term for the part of a wired telephone that was held in the hand, hence "handheld." I assume the iPhone is meant, but why didn't Piper Sandler use the same word as everyone else? And as for "RAM and Flash chip pricing increasing," that's true of everyone in that market not just Apple. By its sheer size Apple is in a better position to dictate prices.

There is a legitimate concern that Apple may have trouble transiting from assembling iPhones almost exclusively in China to making them in India and Vietnam, but that's not mentioned. 

Handset—The handle-shaped part of a telephone, containing the receiver and transmitter and often a dial or push buttons.

inkling said:

Factors specifically affecting Apple are a difficult first-half handset market, and signs of RAM and Flash chip pricing increasing.

Could someone tell me what "handset" Apple makes? That's the old term for the part of a wired telephone that was held in the hand, hence "handheld." I assume the iPhone is meant, but why didn't Piper Sandler use the same word as everyone else? And as for "RAM and Flash chip pricing increasing," that's true of everyone in that market not just Apple. By its sheer size Apple is in a better position to dictate prices.

There is a legitimate concern that Apple may have trouble transiting from assembling iPhones almost exclusively in China to making them in India and Vietnam, but that's not mentioned. 

Handset—The handle-shaped part of a telephone, containing the receiver and transmitter and often a dial or push buttons.

The term may be old but is widely used in current usage to mean mobile phone. 

We still say 'dial' a number in spite of phones not having dials. 

blastdoor said:

Suppose there were a company with first rate CPU, GPU, OS, and language/compiler teams. Suppose that company was already the most profitable in the world. What would happen if that company invested in creating a soup to nuts AI training and inference platform? Seems like a nightmare scenario for Nvidia. I wonder if it will happen….

That company spent a decade on adding 4 wheels to a computer and delivered... a Mac Pro. Nvidia should worry about AWS, Google, AMD... not Apple.