Antifragile: Actually improve under stress
Its one of the highest market cap companies in the US. I don’t think I’d say they improve under stress anymore… they’ve reached a stage at which innovation is completely unecessary, and can weather storms via their existing capital.
This does show their sales are solid, but they also just recently lost the top world smartphone sales spot to xiaomi. If anything a lot of these late stage companies are on a slow decline.
Yeah, I certainly wondered about that too. The premise of the article was interesting (trying to come up with a framework to understand how Apple managed to handle the pandemic so well), but I’m not sure I completely buy the author’s argument that Apple is uniquely equipped to “thrive” in these kinds of crises.
The point about Apple’s policy of pre-ordering processor capacity in excess of other similar hardware companies was interesting:
Have you tried to buy a PlayStation 5 or an Xbox Series X? Good luck, they’re still hard to get. No one can produce enough chips. The same goes for automobiles. Automakers have had to choose between producing cars with fewer features or not making them at all.
Apple hasn’t had this problem. You can walk into an Apple store right now and pick up an iPhone 12 or an M1-based Mac. Apple CFO Luca Maestri had warned in the company’s Q2 earnings call that Apple was expecting supply chain constraints, but in the Q3 call, he briefly mentioned that Apple had worked around them. He warned of more severe constraints in Q4, but knowing Apple’s habit of underpromising and overdelivering, I’m betting that it won’t turn out to be a major problem. Even if I’m wrong, I guarantee that Apple will be in a better situation than other silicon-dependent manufacturers.
Apple can do this because it spends billions well in advance to secure the parts it needs—precisely what the auto industry didn’t do. Apple reported that it plans to spend over $38 billion in manufacturing purchase obligations this quarter, up 26% from last quarter. Analyst Ben Bajarin said it’s due to Apple locking in its chip supply. Other manufacturers have been caught with their pants down while Apple guarantees its chip supply.
At the same time, I don’t think there’s been a significant shortage of most laptops or smartphones, mostly just GPUs and consoles at the “high end” and microcontroller-type boards at the “low end”.
I’d never really heard of this “antifragile” concept so I kinda thought the piece was interesting, but far from perfect.
So, monopolies continue being monopolies even after a rough couple years?
Quick someone call the Rockefellers!
