The iPhone X was released at the end of last year. Would the hype, the OLED screen, the face recognition & the animojis, justify the 4 figure price?
Answer: whilst the phone is undoubtedly good, it is struggling. Consider the following:
- Production of key iPhone X components has stopped. You, the potential customer, have decided not only that the X’s price is too high, but also that the iPhone 8 & iPhone 8 Plus are not good enough iterations to justify the increased cost. The result? iPhone 6 & iPhone 7 demand is red hot.
- Apple is planning 3 new iPhones, with component specs currently being redesigned & mass production scheduled to start in May/June.
- Improving smartphone specs are dictating more electronic materials per unit. The iPhone X contains 20 Flexible Printed Circuits versus 14 in the iPhone 6. What does that mean? Put simply: more stuff at faster speeds in the drive towards frictionless communication.
- The X’s OLED screen is interesting. As the only company currently capable of consistently mastering the welding of fine metal masks to metal frames with the correct tension & precision, Samsung holds a lock on the smartphone OLED screen market.
- A Japanese company we are recommending has developed a competing product which facilitates higher OLED screen production capacity at lower cost, first orders for which are due in the coming 6 months. The Chinese are currently forming a disorderly queue to get their hands on it.
The above stream of technology consciousness is a product of Storm Research spending 100% of its time immersed in the Japanese small & mid cap equity landscape. It is a process designed to develop a detailed understanding of what is going on out there & where to find the best ideas.
In the (paraphrased) words of Liam Neeson in Taken:
‘What we have are a very particular set of skills. Skills we have acquired over a very long career. Skills that allow us to add value to people like you.’
Portfolio managers with Japanese equity exposure reading this post are encouraged to get in touch.