#Echo82. Samsung and Apple - the triumph of IT corporations

As you know, a series based on Isaac Asimov's Foundation cycle of novels will be released on Apple TV next year. I don’t remember the books anymore, I read at the age of 12, I started to re-read them. And the first scene caught my attention. The hero of the novel flies to the capital of the galactic Empire, goes to the taxi stand, guided by the instructions of the customs officer, stands in line at the taxi operator's desk and asks to be taken to some good hotel, worrying about how much it will cost, because money he has almost none. Ask the customs officer for directions! Stand in line! Order a taxi at the counter! Don't know which hotel to choose! Worry about whether the money is enough! This is really fantastic for 2020.

This is not sarcasm towards Mr. Azimov, whose contribution to the development of the whole society is invaluable. This is more about how many things that are obvious today, even such an advanced thinker, immersed in the sphere of the world of the future, like Isaac Asimov, simply could not imagine.

I wonder what the novel would look like if it were written today.

#Echo82. Samsung and Apple - the triumph of IT corporations

Bipolar world

The nature of the current confrontation between the US and China is that the latter has begun to show global business ambitions. As long as China was the world's factory and local companies remained in the home market, everything was fine. However, just as Western companies were seduced by China's huge market, Chinese companies looked at the world around them with interest. And if even 10 years ago the ability of the Chinese to independently create high-tech solutions raised questions, today China can be called one of the world's technological leaders.

It may seem that the main obstacle to Chinese technology has become censorship and ideology, as a result of which Chinese solutions are perceived by the Western world as lepers. But rather, this is the reason, because, as they say, "collision" must be justified.

Smart cities flooded with cameras to help fight traffic jams and crime are, in theory, a boon. The average person has nothing to hide and no one to hide from. And around the world, cameras have long been used to monitor situations. Along the way, admiring the decisions of Singapore, it was Chinese "smart" cities that immediately began to be perceived as synonymous with a police state.

Paying via WeChat or Alipay from any smartphone (whether it has NFC or not) is much easier and more profitable for everyone. But even here they immediately explained that Chinese companies give data to the state, which now knows what kind of coffee you drink. Another thing is the cards of Sberbank or Bank of America, which reliably protect against the vigilant government eye.

Another example is telecom equipment from Huawei. The company offers the best products in terms of quality, features and price. And immediately falls under sanctions.

The next example is much more interesting - TikTok. Perhaps this is the first social product from China, which has become fashionable and in demand around the world. And as soon as this happened, immediately the US government sent signals about a future ban on the application.

You don't need to do any analysis to see that every time the whistleblower is the US government, which subsequently puts pressure on all partners, calling for the abandonment of Chinese technologies. The UK recently dropped Huawei as a 5G service provider. Now everyone is looking at Germany, which has not yet abandoned Huawei. As well as France, which in early July announced that it would not prohibit the use of Huawei products by those companies that are already in partnership with the Chinese manufacturer (but operators that have not previously worked with Huawei will have to justify why it is with Huawei they should cooperate). Then, apparently, German schoolgirls will be banned from dancing on TikTok, and additional sanctions will be imposed on Russia along the way.

Thus, there is a split when countries will have to choose whose side to take - China or the United States.

Instead of a conclusion, I will say that at the moment, China is still losing in terms of the number of technologies, and the power is on the side of the United States. A striking example of this is the problems with the creation of processors. Since the 1990s, attempts have been made at the state level to build their own industry. By the way, the IPO of the largest home chipset builder Semiconductor Manufacturing International Corp, which is several generations behind TSMC, was recently held on the Shanghai Stock Exchange. Well, then countries will have to make a choice which Twix stick is better.

Apple Summary

About Apple and India

Before discussing the report. In the last issue, speaking about India, he casually mentioned that Apple is unable to establish iPhone production there, because local hard workers cannot cope. And then the news arrived, a rumor that the Taiwanese manufacturer Foxconn at the plant in Chennai (India) seems to have mastered the production of the iPhone 11, and that even such smartphones will be exported. It turns out that the height was taken from the third time and 7 months after the previous attempt. Well, so that they don’t reproach me for misrepresenting information, I’ll immediately note that budget outdated refurbished iPhone models since 2017 have been made in India. But the complexity of such work is much lower than the full assembly of the flagship device.

Currently, iPhone production is tied to China. In light of the difficult geopolitical environment, Apple has long and persistently tried to reduce its dependence on China and diversify its manufacturing capacity in other countries. In the same way, the company works with different plants, reducing the risks of dependence on one manufacturer. Foxconn is the main contractor, but Apple also has Pegatron and Wistron.

About the Apple report

In the previous issue of Echo, I wrote that Apple's quarter would be unsuccessful (closer to 2017), and a 2-3% drop compared to the previous year could be called a success. Everything hinted at such a result, from the lack of traditional guidance from Apple, downtime of retail stores, and ending with a drop in the share of iOS and macOS operating systems.

#Echo82. Samsung and Apple - the triumph of IT corporations

However, I was not alone in my judgments. Analysts from Loop Ventures, Munster, investment bank Cowen, JP Morgan unanimously spoke of results in the range of 49 to 50 billion, that is, 5-10% worse than a year ago. And only an analyst from Morgan Stanley assumed that Apple, as always, will surprise by presenting results better than expected, in the region of 55 billion, that is, a couple of percent better.

Against this background, the figure of 59.7 billion dollars named by Tim Cook struck everyone like a bolt from the blue. In an interview with Bloomberg, one of the analysts called the results of the jaw-dropping quarter. I absolutely agree, when Cook called the number, the jaw asked to hang. And at the Q&A session during calls with investors, instead of the usual words of welcome and congratulations on another successful quarter, analysts immediately asked questions, trying to understand how it happened.One analyst even asked a tactless question about the level of channel overstocking, implying that Apple just shipped a lot of products, thus “drawing” good numbers. It is even more surprising that Tim Cook did not shrug it off, but, apparently, feeling obliged to somehow comment on the super result, Archive: Artificial House Plant said that, on the contrary, the overstocking of channels is even lower than it was in a similar situation a year ago.

By the way, here is an interesting point. Whether you noticed or not, Tim Cook, with a rather guilty look, said at the congressional hearings that Apple is making great money during a pandemic. As if he was a little embarrassed by this fact. If this is true, then it says something about the Apple CEO as a person.

It's even more interesting that although Cook did not make official forecasts, he mentioned that the next quarter is expected to be good. And all products, including services, will continue the positive trend.

#Echo82. Samsung and Apple - the triumph of IT corporations

Apple's user base as of January 1 of each year in billions of devices

And perhaps the most interesting fact from the conference call is that the company's user base has grown to a new all-time high. The figure, unfortunately, was not named. But we can assume that this is about 1.55 billion users. The fact is interesting because statistics from Statscounter shows that the share of iOS users has decreased after a surge in April. Here, of course, one could say that this market has increased, but other smartphone manufacturers have shown a drop in sales year on year.

Probably a significant role in the success was played by the launch of a new version of the iPhone SE, which prompted the upgrade. So, Counterpoint in its report notes that about 30% of those who bought the iPhone SE in the US switched to it from the iPhone 6 or older models, and 26% of users switched to SE from Android. The last figure is much higher than usual.

The situation with Apple sales is also curious in that it turns out that the pandemic, in fact, not only did not affect iPhone sales, but even contributed to them. Speaking about the United States, experts note that people used incentive payments from the state to buy new smartphones. And, apparently, the choice was in favor of the iPhone. By the way, this is also seen on the graph with the shares of operating systems. In April, iOS peaked. The situation is similar in China, where Apple sales grew by 32% quarter-on-quarter due to the change of old iPhones to the new SE.

#Echo82. Samsung and Apple - the triumph of IT corporations

Apple cannot be suspected of falsifying the facts. Too significant company and insignificant reason. The company's third financial quarter is always the weakest. And no one expected miracles, and if the results were at the level of last year or worse, then everyone would have reacted with understanding. And then there's this crazy growth. Also in all categories. Macs still have one of the highest record numbers in history. Well. This is why we love Apple. The company knows how to do miracles out of the blue.

By the way, Tim Cook mentioned that this year the presentation of new smartphones will take place later than usual.

About Samsung, BBK and when the company will give way to the leader

Somehow it so happened that Samsung is considered the main competitor of Apple. Although this is absolutely not the case. These are companies with different setups, strategies and sources of profit. But for some reason, Apple fans are pleased when the company bypasses Samsung. I'm still waiting for the brands of BBK Electronics Corp (Oppo, Vivo, realme, iQOO) to finally overtake Samsung. Initially, he said that this would happen by the end of this year, but the coronavirus confused all the cards. In the fourth quarter of 2019, Oppo/Vivo/realme sold 70.5 million units, while Samsung sold 69.5 million units. In 2020, BBK was supposed to strengthen its leadership, but due to the coronavirus panic, it lost the 1st quarter, and in the second quarter, BBK sold 53.4 million, and Samsung – 53.7 million phones. Breathes into the back of the head.

The outcome depends, firstly, on the depth of the economic crisis in which we find ourselves after the pandemic, as BBK is betting heavily on developing countries. And as you know, the crisis primarily affects the least financially secure countries. Secondly, locked in the Chinese market, Huawei continues to terrorize local players. Pay attention to the slide below, the shares of Oppo and Vivo have decreased by 20-30%. Along the way, Xiaomi also received a 35% slap in the face. At this rate, other manufacturers will soon be petitioning change.org to release Huawei into other markets. Thirdly, anti-Chinese sentiments have emerged in the Indian market, which can be called the most important after the home market for BBK.

#Echo82. Samsung and Apple - the triumph of IT corporations

Back to Samsung. The company completed the second quarter with dignity. Sales of semiconductors and memory have grown significantly, consumer electronics has slightly decreased due to a decrease in sales of TV sets. The company linked the last point to the closure of stores, the lack of sports broadcasts and the cancellation of the Tokyo Olympics.

#Echo82. Samsung and Apple - the triumph of IT corporations

In smartphones, everything is generally not bad either. In pieces, sales sank by almost 30%, in revenue - by 19%. But the net profit from the sale of smartphones increased by 40%. If you are confused by the figure, then everything is simple. The company began to sell less, but more efficient models that bring more money. Along the way, Samsung has significantly reduced marketing costs for advertising and offline promotion.

#Echo82. Samsung and Apple - the triumph of IT corporations

Instead of conclusion: Apple, Google, Amazon, Facebook, Nvidia, AMD, Netflix.

A series of reports for the second calendar quarter of 2020 has passed. And, perhaps, the main result of the quarter is the undeniable power of IT companies. Most hi-tech companies have shown results that seem to pay no attention to the difficult situation in the world. Bad bank reports, rising unemployment, falling grocery and FMCG sales, planes don't fly, and cruise ships rust in ports. If you look like that, it may seem that the world is falling apart. And perhaps it is, if we talk about the concept of the old "analogue" world. But the new digital one is flourishing.

#Echo82. Samsung and Apple - the triumph of IT corporations

As you know, a series based on Isaac Asimov's Foundation cycle of novels will be released on Apple TV next year. I don’t remember the books anymore, I read at the age of 12, I started to re-read them. And the first scene caught my attention. The hero of the novel flies to the capital of the galactic Empire, goes to the taxi stand, guided by the instructions of the customs officer, stands in line at the taxi operator's desk and asks to be taken to some good hotel, worrying about how much it will cost, because money he has almost none. Ask the customs officer for directions! Stand in line! Order a taxi at the counter! Don't know which hotel to choose! Worry about whether the money is enough! This is really fantastic for 2020.

This is not sarcasm towards Mr. Azimov, whose contribution to the development of the whole society is invaluable. This is more about how many things that are obvious today, even such an advanced thinker, immersed in the sphere of the world of the future, like Isaac Asimov, simply could not imagine.

I wonder what the novel would look like if it were written today.

#Echo82. Samsung and Apple - the triumph of IT corporations

Bipolar World

The nature of the current confrontation between the US and China is that the latter has begun to show global business ambitions. As long as China was the world's factory and local companies remained in the home market, everything was fine. However, just as Western companies were seduced by China's huge market, Chinese companies looked at the world around them with interest. And if even 10 years ago the ability of the Chinese to independently create high-tech solutions raised questions, today China can be called one of the world's technological leaders.

It may seem that the main obstacle to Chinese technology has become censorship and ideology, as a result of which Chinese solutions are perceived by the Western world as lepers. But rather, this is the reason, because, as they say, "collision" must be justified.

Smart cities flooded with cameras to help fight traffic jams and crime are, in theory, a boon. The average person has nothing to hide and no one to hide from. And around the world, cameras have long been used to monitor situations. Along the way, admiring the decisions of Singapore, it was Chinese "smart" cities that immediately began to be perceived as synonymous with a police state.

Paying via WeChat or Alipay from any smartphone (whether it has NFC or not) is much easier and more profitable for everyone. But even here they immediately explained that Chinese companies give data to the state, which now knows what kind of coffee you drink. Another thing is the cards of Sberbank or Bank of America, which reliably protect against the vigilant government eye.

Another example is telecom equipment from Huawei. The company offers the best products in terms of quality, features and price. And immediately falls under sanctions.

The next example is much more interesting - TikTok. Perhaps this is the first social product from China, which has become fashionable and in demand around the world. And as soon as this happened, immediately the US government sent signals about a future ban on the application.

You don't need to do any analysis to see that every time the whistleblower is the US government, which subsequently puts pressure on all partners, calling for the abandonment of Chinese technologies. The UK recently dropped Huawei as a 5G service provider. Now everyone is looking at Germany, which has not yet abandoned Huawei. As well as France, which in early July announced that it would not prohibit the use of Huawei products by those companies that are already in partnership with the Chinese manufacturer (but operators that have not previously worked with Huawei will have to justify why it is with Huawei they should cooperate). Then, apparently, German schoolgirls will be banned from dancing on TikTok, and additional sanctions will be imposed on Russia along the way.

Thus, there is a split when countries will have to choose whose side to take - China or the United States.

Instead of a conclusion, I will say that at the moment, China is still losing in terms of the number of technologies, and the power is on the side of the United States. A striking example of this is the problems with the creation of processors. Since the 1990s, attempts have been made at the state level to build their own industry. By the way, the IPO of the largest home chipset builder Semiconductor Manufacturing International Corp, which is several generations behind TSMC, was recently held on the Shanghai Stock Exchange. Well, then countries will have to make a choice which Twix stick is better.

Apple Summary

About Apple and India

Before discussing the report. In the last issue, speaking about India, he casually mentioned that Apple is unable to establish iPhone production there, because local hard workers cannot cope. And then the news arrived, a rumor that the Taiwanese manufacturer Foxconn at the plant in Chennai (India) seems to have mastered the production of the iPhone 11, and that even such smartphones will be exported. It turns out that the height was taken from the third time and 7 months after the previous attempt. Well, so that they don’t reproach me for misrepresenting information, I’ll immediately note that budget outdated refurbished iPhone models since 2017 have been made in India. But the complexity of such work is much lower than the full assembly of the flagship device.

By the way, here is an interesting point. Whether you noticed or not, Tim Cook, with a rather guilty look, said at the congressional hearings that Apple is making great money during a pandemic. As if he was a little embarrassed by this fact. If this is true, then it says something about the Apple CEO as a person.

It's even more interesting that although Cook did not make official forecasts, he mentioned that the next quarter is expected to be good. And all products, including services, will continue the positive trend.

#Echo82. Samsung and Apple - the triumph of IT corporations

Apple's user base as of January 1 of each year in billions of devices

And perhaps the most interesting fact from the conference call is that the company's user base has grown to a new all-time high. The figure, unfortunately, was not named. But we can assume that this is about 1.55 billion users. The fact is interesting because statistics from Statscounter shows that the share of iOS users has decreased after a surge in April. Here, of course, one could say that this market has increased, but other smartphone manufacturers have shown a drop in sales year on year.

Probably a significant role in the success was played by the launch of a new version of the iPhone SE, which prompted the upgrade. So, Counterpoint in its report notes that about 30% of those who bought the iPhone SE in the US switched to it from the iPhone 6 or older models, and 26% of users switched to SE from Android. The last figure is much higher than usual.

The situation with Apple sales is also curious in that it turns out that the pandemic, in fact, not only did not affect iPhone sales, but even contributed to them. Speaking about the United States, experts note that people used incentive payments from the state to buy new smartphones. And, apparently, the choice was in favor of the iPhone. By the way, this is also seen on the graph with the shares of operating systems. In April, iOS peaked. The situation is similar in China, where Apple sales grew by 32% quarter-on-quarter due to the change of old iPhones to the new SE.

#Echo82. Samsung and Apple - the triumph of IT corporations

Apple cannot be suspected of falsifying the facts. Too significant company and insignificant reason. The company's third financial quarter is always the weakest. And no one expected miracles, and if the results were at the level of last year or worse, then everyone would have reacted with understanding. And then there's this crazy growth. Also in all categories. Macs still have one of the highest record numbers in history. Well. This is why we love Apple. The company knows how to do miracles out of the blue.

By the way, Tim Cook mentioned that this year the presentation of new smartphones will take place later than usual.

About Samsung, BBK and when the company will give way to the leader

Somehow it so happened that Samsung is considered the main competitor of Apple. Although this is absolutely not the case. These are companies with different setups, strategies and sources of profit. But for some reason, Apple fans are pleased when the company bypasses Samsung. I'm still waiting for the brands of BBK Electronics Corp (Oppo, Vivo, realme, iQOO) to finally overtake Samsung. Initially, he said that this would happen by the end of this year, but the coronavirus confused all the cards. In the fourth quarter of 2019, Oppo/Vivo/realme sold 70.5 million units, while Samsung sold 69.5 million units. In 2020, BBK was supposed to strengthen its leadership, but due to the coronavirus panic, it lost the 1st quarter, and in the second quarter, BBK sold 53.4 million, and Samsung – 53.7 million phones. Breathes into the back of the head.

The outcome depends, firstly, on the depth of the economic crisis in which we find ourselves after the pandemic, as BBK is betting heavily on developing countries. And as you know, the crisis primarily affects the least financially secure countries. Secondly, locked in the Chinese market, Huawei continues to terrorize local players. Pay attention to the slide below, the shares of Oppo and Vivo have decreased by 20-30%. Along the way, Xiaomi also received a 35% slap in the face. At this rate, other manufacturers will soon be petitioning change.org to release Huawei into other markets. Thirdly, anti-Chinese sentiments have emerged in the Indian market, which can be called the most important after the home market for BBK.

#Echo82. Samsung and Apple - the triumph of IT corporations

Back to Samsung. The company completed the second quarter with dignity. Sales of semiconductors and memory have grown significantly, consumer electronics has slightly decreased due to a decrease in sales of TV sets. The company linked the last point to the closure of stores, the lack of sports broadcasts and the cancellation of the Tokyo Olympics.

#Echo82. Samsung and Apple - the triumph of IT corporations

In smartphones, everything is generally not bad either. In pieces, sales sank by almost 30%, in revenue - by 19%. But the net profit from the sale of smartphones increased by 40%. If you are confused by the figure, then everything is simple. The company began to sell less, but more efficient models that bring more money. Along the way, Samsung has significantly reduced marketing costs for advertising and offline promotion.

#Echo82. Samsung and Apple - the triumph of IT corporations

Instead of conclusion: Apple, Google, Amazon, Facebook, Nvidia, AMD, Netflix.

A series of reports for the second calendar quarter of 2020 has passed. And, perhaps, the main result of the quarter is the undeniable power of IT companies. Most hi-tech companies have shown results that seem to pay no attention to the difficult situation in the world. Bad bank reports, rising unemployment, falling grocery and FMCG sales, planes don't fly, and cruise ships rust in ports. If you look like that, it may seem that the world is falling apart. And perhaps it is, if we talk about the concept of the old "analogue" world. But the new digital one is flourishing.

#Echo82. Samsung and Apple - the triumph of IT corporations

As you know, a series based on Isaac Asimov's Foundation cycle of novels will be released on Apple TV next year. I don’t remember the books anymore, I read at the age of 12, I started to re-read them. And the first scene caught my attention. The hero of the novel flies to the capital of the galactic Empire, goes to the taxi stand, guided by the instructions of the customs officer, stands in line at the taxi operator's desk and asks to be taken to some good hotel, worrying about how much it will cost, because money he has almost none. Ask the customs officer for directions! Stand in line! Order a taxi at the counter! Don't know which hotel to choose! Worry about whether the money is enough! This is really fantastic for 2020.

This is not sarcasm towards Mr. Azimov, whose contribution to the development of the whole society is invaluable. This is more about how many things that are obvious today, even such an advanced thinker, immersed in the sphere of the world of the future, like Isaac Asimov, simply could not imagine.

I wonder what the novel would look like if it were written today.

#Echo82. Samsung and Apple - the triumph of IT corporations

Bipolar World

The nature of the current confrontation between the US and China is that the latter has begun to show global business ambitions. As long as China was the world's factory and local companies remained in the home market, everything was fine. However, just as Western companies were seduced by China's huge market, Chinese companies looked at the world around them with interest. And if even 10 years ago the ability of the Chinese to independently create high-tech solutions raised questions, today China can be called one of the world's technological leaders.

It may seem that the main obstacle to Chinese technology has become censorship and ideology, as a result of which Chinese solutions are perceived by the Western world as lepers. But rather, this is the reason, because, as they say, "collision" must be justified.

Smart cities flooded with cameras to help fight traffic jams and crime are, in theory, a boon. The average person has nothing to hide and no one to hide from. And around the world, cameras have long been used to monitor situations. Along the way, admiring the decisions of Singapore, it was Chinese "smart" cities that immediately began to be perceived as synonymous with a police state.

Paying via WeChat or Alipay from any smartphone (whether it has NFC or not) is much easier and more profitable for everyone. But even here they immediately explained that Chinese companies give data to the state, which now knows what kind of coffee you drink. Another thing is the cards of Sberbank or Bank of America, which reliably protect against the vigilant government eye.

Thus, there is a split when countries will have to choose whose side to take - China or the United States.

Instead of a conclusion, I will say that at the moment, China is still losing in terms of the number of technologies, and the power is on the side of the United States. A striking example of this is the problems with the creation of processors. Since the 1990s, attempts have been made at the state level to build their own industry. By the way, the IPO of the largest home chipset builder Semiconductor Manufacturing International Corp, which is several generations behind TSMC, was recently held on the Shanghai Stock Exchange. Well, then countries will have to make a choice which Twix stick is better.

Apple Summary

About Apple and India

Before discussing the report. In the last issue, speaking about India, he casually mentioned that Apple is unable to establish iPhone production there, because local hard workers cannot cope. And then the news arrived, a rumor that the Taiwanese manufacturer Foxconn at the plant in Chennai (India) seems to have mastered the production of the iPhone 11, and that even such smartphones will be exported. It turns out that the height was taken from the third time and 7 months after the previous attempt. Well, so that they don’t reproach me for misrepresenting information, I’ll immediately note that budget outdated refurbished iPhone models since 2017 have been made in India. But the complexity of such work is much lower than the full assembly of the flagship device.

Currently, iPhone production is tied to China. In light of the difficult geopolitical environment, Apple has long and persistently tried to reduce its dependence on China and diversify its manufacturing capacity in other countries. In the same way, the company works with different plants, reducing the risks of dependence on one manufacturer. Foxconn is the main contractor, but Apple also has Pegatron and Wistron.

About the Apple report

In the previous issue of Echo, I wrote that Apple's quarter will be unsuccessful (closer to 2017), and a 2-3% drop compared to the previous year can be called a success. Everything hinted at such a result, from the lack of traditional guidance from Apple, downtime of retail stores, and ending with a drop in the share of iOS and macOS operating systems.

#Echo82. Samsung and Apple - the triumph of IT corporations

However, I was not alone in my judgments. Analysts from Loop Ventures, Munster, Cowen investment bank, JP Morgan unanimously spoke of results in the range of 49 to 50 billion, that is, 5-10% worse than a year ago. And only an analyst from Morgan Stanley assumed that Apple, as always, will surprise by presenting results better than expected, in the region of 55 billion, that is, a couple of percent better.

Against this background, the figure of 59.7 billion dollars named by Tim Cook struck everyone like a bolt from the blue. In an interview with Bloomberg, one of the analysts called the results of the jaw-dropping quarter. I absolutely agree, when Cook called the number, the jaw asked to hang. And at the Q&A session during calls with investors, instead of the usual words of welcome and congratulations on another successful quarter, analysts immediately asked questions, trying to understand how it happened. One analyst even asked a tactless question about the level of channel overstocking, implying that Apple just shipped a lot of products, thus “drawing” good numbers. It is even more surprising that Tim Cook did not shrug it off, but, apparently, feeling obliged to somehow comment on the super result, Archive: Artificial House Plant said that, on the contrary, the overstocking of channels is even lower than it was in a similar situation a year ago.

By the way, here is an interesting point. Whether you noticed or not, Tim Cook, with a rather guilty look, said at the congressional hearings that Apple is making great money during a pandemic. As if he was a little embarrassed by this fact. If this is true, then it says something about the Apple CEO as a person.

It's even more interesting that although Cook did not make official forecasts, he mentioned that the next quarter is expected to be good. And all products, including services, will continue the positive trend.

#Echo82. Samsung and Apple - the triumph of IT corporations

Apple's user base as of January 1 of each year in billions of devices

And perhaps the most interesting fact from the conference call is that the company's user base has grown to a new all-time high. The figure, unfortunately, was not named. But we can assume that this is about 1.55 billion users. The fact is interesting because statistics from Statscounter shows that the share of iOS users has decreased after a surge in April. Here, of course, one could say that this market has increased, but other smartphone manufacturers have shown a drop in sales year on year.

Probably a significant role in the success was played by the launch of a new version of the iPhone SE, which prompted the upgrade. So, Counterpoint in its report notes that about 30% of those who bought the iPhone SE in the US switched to it from the iPhone 6 or older models, and 26% of users switched to SE from Android. The last figure is much higher than usual.

The situation with Apple sales is also curious in that it turns out that the pandemic, in fact, not only did not affect iPhone sales, but even contributed to them. Speaking about the United States, experts note that people used incentive payments from the state to buy new smartphones. And, apparently, the choice was in favor of the iPhone. By the way, this is also seen on the graph with the shares of operating systems. In April, iOS peaked. The situation is similar in China, where Apple sales grew by 32% quarter-on-quarter due to the change of old iPhones to the new SE.

#Echo82. Samsung and Apple - the triumph of IT corporations

Apple cannot be suspected of falsifying the facts. Too significant company and insignificant reason. The company's third financial quarter is always the weakest. And no one expected miracles, and if the results were at the level of last year or worse, then everyone would have reacted with understanding. And then there's this crazy growth. Also in all categories. Macs still have one of the highest record numbers in history. Well. This is why we love Apple. The company knows how to do miracles out of the blue.

#Echo82. Samsung and Apple - the triumph of IT corporations

Back to Samsung. The company completed the second quarter with dignity. Sales of semiconductors and memory have grown significantly, consumer electronics has slightly decreased due to a decrease in sales of TV sets. The company linked the last point to the closure of stores, the lack of sports broadcasts and the cancellation of the Tokyo Olympics.

#Echo82. Samsung and Apple - the triumph of IT corporations

In smartphones, everything is generally not bad either. In pieces, sales sank by almost 30%, in revenue - by 19%. But the net profit from the sale of smartphones increased by 40%. If you are confused by the figure, then everything is simple. The company began to sell less, but more efficient models that bring more money. Along the way, Samsung has significantly reduced marketing costs for advertising and offline promotion.

#Echo82. Samsung and Apple - the triumph of IT corporations

This is not sarcasm towards Mr. Azimov, whose contribution to the development of the whole society is invaluable. This is more about how many things that are obvious today, even such an advanced thinker, immersed in the sphere of the world of the future, like Isaac Asimov, simply could not imagine.

I wonder what the novel would look like if it were written today.

Bipolar World

The nature of the current confrontation between the US and China is that the latter has begun to show global business ambitions. As long as China was the world's factory and local companies remained in the home market, everything was fine. However, just as Western companies were seduced by China's huge market, Chinese companies looked at the world around them with interest. And if even 10 years ago the ability of the Chinese to independently create high-tech solutions raised questions, today China can be called one of the world's technological leaders.

It may seem that the main obstacle to Chinese technology has become censorship and ideology, as a result of which Chinese solutions are perceived by the Western world as lepers. But rather, this is the reason, because, as they say, "collision" must be justified.

Smart cities flooded with cameras to help fight traffic jams and crime are, in theory, a boon. The average person has nothing to hide and no one to hide from. And around the world, cameras have long been used to monitor situations. Along the way, admiring the decisions of Singapore, it was Chinese "smart" cities that immediately began to be perceived as synonymous with a police state.

Paying via WeChat or Alipay from any smartphone (whether it has NFC or not) is much easier and more profitable for everyone. But even here they immediately explained that Chinese companies give data to the state, which now knows what kind of coffee you drink. Another thing is the cards of Sberbank or Bank of America, which reliably protect against the vigilant government eye.

Another example is telecom equipment from Huawei. The company offers the best products in terms of quality, features and price. And immediately falls under sanctions.

The next example is much more interesting - TikTok. Perhaps this is the first social product from China, which has become fashionable and in demand around the world. And as soon as this happened, immediately the US government sent signals about a future ban on the application.

You don't need to do any analysis to see that every time the whistleblower is the US government, which subsequently puts pressure on all partners, calling for the abandonment of Chinese technologies. The UK recently dropped Huawei as a 5G service provider. Now everyone is looking at Germany, which has not yet abandoned Huawei. As well as France, which in early July announced that it would not prohibit the use of Huawei products by those companies that are already in partnership with the Chinese manufacturer (but operators that have not previously worked with Huawei will have to justify why it is with Huawei they should cooperate). Then, apparently, German schoolgirls will be banned from dancing on TikTok, and additional sanctions will be imposed on Russia along the way.

Thus, there is a split when countries will have to choose whose side to take - China or the United States.

Instead of a conclusion, I will say that at the moment, China is still losing in terms of the number of technologies, and the power is on the side of the United States. A striking example of this is the problems with the creation of processors. Since the 1990s, attempts have been made at the state level to build their own industry. By the way, the IPO of the largest home chipset builder Semiconductor Manufacturing International Corp, which is several generations behind TSMC, was recently held on the Shanghai Stock Exchange. Well, then countries will have to make a choice which Twix stick is better.

Apple Summary

About Apple and India

Before discussing the report. In the last issue, speaking about India, he casually mentioned that Apple is unable to establish iPhone production there, because local hard workers cannot cope. And then the news arrived, a rumor that the Taiwanese manufacturer Foxconn at the plant in Chennai (India) seems to have mastered the production of the iPhone 11, and that even such smartphones will be exported. It turns out that the height was taken from the third time and 7 months after the previous attempt. Well, so that they don’t reproach me for misrepresenting information, I’ll immediately note that budget outdated refurbished iPhone models since 2017 have been made in India. But the complexity of such work is much lower than the full assembly of the flagship device.

Currently, iPhone production is tied to China. In light of the difficult geopolitical environment, Apple has long and persistently tried to reduce its dependence on China and diversify its manufacturing capacity in other countries. In the same way, the company works with different plants, reducing the risks of dependence on one manufacturer. Foxconn is the main contractor, but Apple also has Pegatron and Wistron.

About the Apple report

In the previous issue of Echo, I wrote that Apple's quarter would be unsuccessful (closer to 2017), and a 2-3% drop compared to the previous year could be called a success. Everything hinted at such a result, from the lack of traditional guidance from Apple, downtime of retail stores, and ending with a drop in the share of iOS and macOS operating systems.

However, I was not alone in my judgments. Analysts from Loop Ventures, Munster, investment bank Cowen, JP Morgan unanimously spoke of results in the range of 49 to 50 billion, that is, 5-10% worse than a year ago. And only an analyst from Morgan Stanley assumed that Apple, as always, will surprise by presenting results better than expected, in the region of 55 billion, that is, a couple of percent better.

Against this background, the figure of 59.7 billion dollars named by Tim Cook struck everyone like a bolt from the blue. In an interview with Bloomberg, one of the analysts called the results of the jaw-dropping quarter. I absolutely agree, when Cook called the number, the jaw asked to hang. And at the Q&A session during calls with investors, instead of the usual words of welcome and congratulations on another successful quarter, analysts immediately asked questions, trying to understand how it happened. One analyst even asked a tactless question about the level of channel overstocking, implying that Apple just shipped a lot of products, thus “drawing” good numbers. It is even more surprising that Tim Cook did not shrug it off, but, apparently, feeling obliged to somehow comment on the super result, Archive: Artificial House Plant said that, on the contrary, the overstocking of channels is even lower than it was in a similar situation a year ago.Against this background, the figure of $ 59.7 billion named by Tim Cook struck everyone like a bolt from the blue. In an interview with Bloomberg, one of the analysts called the results of the jaw-dropping quarter. I absolutely agree, when Cook called the number, the jaw asked to hang. And at the Q&A session during calls with investors, instead of the usual words of welcome and congratulations on another successful quarter, analysts immediately asked questions, trying to understand how it happened. One analyst even asked a tactless question about the level of channel overstocking, implying that Apple just shipped a lot of products, thus “drawing” good numbers. It is even more surprising that Tim Cook did not shrug it off, but, apparently, feeling obliged to somehow comment on the super result, Archive: Artificial House Plant Archive: Artificial House Plant said that, on the contrary, the overstocking of channels is even lower than it was in a similar situation a year ago.

Probably a significant role in the success was played by the launch of a new version of the iPhone SE, which prompted the upgrade. So, Counterpoint in its report notes that about 30% of those who bought the iPhone SE in the US switched to it from the iPhone 6 or older models, and 26% of users switched to SE from Android. The last figure is much higher than usual.

The situation with Apple sales is also curious in that it turns out that the pandemic, in fact, not only did not affect iPhone sales, but even contributed to them. Speaking about the United States, experts note that people used incentive payments from the state to buy new smartphones. And, apparently, the choice was in favor of the iPhone. By the way, this is also visible on the graph with the shares of operating systems. In April, iOS peaked. The situation is similar in China, where Apple sales grew by 32% quarter-on-quarter due to the change of old iPhones to the new SE.

Apple cannot be suspected of falsifying the facts. Too significant company and insignificant reason. The company's third financial quarter is always the weakest. And no one expected miracles, and if the results were at the level of last year or worse, then everyone would have reacted with understanding. And then there's this crazy growth. Also in all categories. Macs still have one of the highest record numbers in history. Well. This is why we love Apple. The company knows how to do miracles out of the blue.

By the way, Tim Cook mentioned that this year the presentation of new smartphones will take place later than usual.

About Samsung, BBK and when the company will give way to the leader

Somehow it so happened that Samsung is considered the main competitor of Apple. Although this is absolutely not the case. These are companies with different setups, strategies and sources of profit. But for some reason, Apple fans are pleased when the company bypasses Samsung. I'm still waiting for the brands of BBK Electronics Corp (Oppo, Vivo, realme, iQOO) to finally overtake Samsung. Initially, he said that this would happen by the end of this year, but the coronavirus confused all the cards. In the fourth quarter of 2019, Oppo/Vivo/realme sold 70.5 million units, while Samsung sold 69.5 million units. In 2020, BBK was supposed to strengthen its leadership, but due to the coronavirus panic, it lost the 1st quarter, and in the second quarter, BBK sold 53.4 million, and Samsung – 53.7 million phones. Breathes into the back of the head.

The outcome depends, firstly, on the depth of the economic crisis in which we find ourselves after the pandemic, as BBK is betting heavily on developing countries. And as you know, the crisis primarily affects the least financially secure countries. Secondly, locked in the Chinese market, Huawei continues to terrorize local players. Pay attention to the slide below, the shares of Oppo and Vivo have decreased by 20-30%. Along the way, Xiaomi also received a 35% slap in the face. At this rate, other manufacturers will soon be petitioning change.org to release Huawei into other markets. Thirdly, anti-Chinese sentiments have emerged in the Indian market, which can be called the most important after the home market for BBK.

Back to Samsung. The company completed the second quarter with dignity. Sales of semiconductors and memory have grown significantly, consumer electronics has slightly decreased due to a decrease in sales of TV sets. The company linked the last point to the closure of stores, the lack of sports broadcasts and the cancellation of the Tokyo Olympics.

In smartphones, everything is generally not bad either. In pieces, sales sank by almost 30%, in revenue - by 19%. But the net profit from the sale of smartphones increased by 40%. If you are confused by the figure, then everything is simple. The company began to sell less, but more efficient models that bring more money. Along the way, Samsung has significantly reduced marketing costs for advertising and offline promotion.

Instead of conclusion: Apple, Google, Amazon, Facebook, Nvidia, AMD, Netflix.

A series of reports for the second calendar quarter of 2020 has passed. And, perhaps, the main result of the quarter is the undeniable power of IT companies. Most hi-tech companies have shown results that seem to pay no attention to the difficult situation in the world. Bad bank reports, rising unemployment, falling grocery and FMCG sales, planes don't fly, and cruise ships rust in ports. If you look like that, it may seem that the world is falling apart. And perhaps it is, if we talk about the concept of the old "analogue" world. But the new digital one is flourishing.