The new iPhone shows three phenomena in the global economy
10:35 AM EDT, September 30, 2023, updated: 9:06 AM EDT, October 5, 2023
In September, Apple showcased its new smartphone: the iPhone 15. The product excited the fans and underwent several significant changes. According to UBS economists, the launch of the new iPhone reveals three interesting trends in the global economy.
As indicated by UBS analysts in their report on this subject, the waiting time for delivery of a new iPhone in the USA is almost twice as long as it was for the previous model. This is 10 days, while for the "fourteenth" one had to wait six. This period is even longer in China - the largest foreign market for Apple. However, the premiere of the new smartphone, as usual, aroused considerable emotion and, according to UBS economists, shows three interesting phenomena.
1. Companies cannot escape from geopolitics
In a truly global economy, large corporations can no longer avoid navigating the realities of geopolitics. As UBS analysts point out, the new iPhone contains a chip designed by Apple in the USA, but produced in Taiwan. Meanwhile, the smartphone itself is assembled in China.
"This illustrates the complexity of the global supply chain, necessary for producing advanced technologies. Semiconductors are one of America's largest export goods, but even the largest producers rely on other suppliers of materials" - describe the bank's economists. They remind that the regulations introduced in 2022 related to chips, known as the CHIPS Act, aim to help in financing programs that strengthen protection for key technological sectors in the USA.
2. The economy is becoming more and more of a closed loop
According to UBS economists, Apple is an example of a rapidly increasing efforts towards recycling - through, among other things, discounts on exchanging old iPhone models for new ones and recovering materials from older products. Experts emphasize that the batteries in iPhone 15 are 100% manufactured from recycled cobalt, as are 100% of the rare metals used in production, just like the aluminum in the internal frame and the copper used on the main boards of the smartphone. The switch to USB-C charging is also expected to reduce the amount of electronic waste generated when using iPhones.
Analysts note that on the one hand, companies want to minimize the amount of electronic waste in this way, but on the other - they reduce dependence on rare materials and raw materials.
3. Customers focus more on experiences than on possession
Experts from UBS have no doubt: consumers are increasingly focusing on experiences and interesting adventures rather than possessing things. This is, among others, a result of the pandemic, after which the global desire to spend money on travel and entertainment significantly increased. "Manufacturers also notice this," claim the bank's economists.
In the case of the new iPhone, this phenomenon is confirmed by the fact that an A17 chip has been added to it, which allows game manufacturers to create mobile versions of popular, large productions. In addition, the upcoming software updates for the iPhone are expected to enable developers to create spatial content to be displayed on mixed reality goggles, which we described here.
As summarized by UBS economists, the above trends - circular economy, complication of supply chains, and focusing on customer experiences - will be key for investors and companies in the coming years.
Let us remind you that, although the launch of the new iPhone traditionally stirred a lot of emotions, it was not without problems - users are reporting, among other things, about the excessively heating 15 Pro model.
