Gene Munster, Loup Funds Managing Partner and longtime Apple analyst, believes Apple CEO Tim Cook will retire as soon as 2026.
Gene Munster for Loup Funds:
Apple has significant exposure in China. Apple’s business is more sensitive to the subject given our estimate that 75-80% of the company’s product sales, or 60-62% of overall sales, are “Made in China.” Additionally, 18% of Apple’s annual revenue comes from Greater China, roughly equal to the size of its services business. Compared to other big tech companies, I believe Apple has the most exposure in China.
Even though it will take years, I believe Apple is reducing its dependence on China. Apple thinks about its business in terms of decades, and in the end, I believe the company will be successful in building manufacturing and a strong user base outside of China … Tim Cook has decades of experience navigating political mines. that derive from relying on a global supply chain. Based on that experience, I believe he sees the writing on the wall and the need to reduce exposure to the region.
Separately, I believe Cook will write two more chapters as Apple’s CEO. One on the side of the new product category, which will most likely be something in AR, health or auto. Secondly, a chapter on the diversification of the supply chain. If you’re wondering, my guess is that Cook will retire between 2026 and 2028, based on his age (61) and options package. That would mean he has plenty of time to position the supply chain for the next decade.
MacDailyNews takes: So, if Munster is right, Cook & Co. has 4-6 years to reduce Apple product production in China, which Munster says is now responsible for about 75% -80% of Apple product production.
It’s too much. IS always been too much. Obviously, it is too risky to be so dependent on one country.
Now, Apple was in dire straits when Cook boarded in the late 1990s and began moving headlong to China. That move helped save Apple, so you can see why Cook has been so married to China ever since, but times change and it’s been clear to most people. lot of years that Apple has too many of its eggs in an autocratic and whimsical basket.
Perhaps COVID and the Chinese Communist Party’s increasingly quixotic responses to the disease they likely invented and released (knowingly or unknowingly) finally got Cook out of his comfort zone. If so, silver lining.
Well, better late than never. Hopefully, Apple can lower the pedal and move manufacturing out of China as much as possible, greatly reducing Apple’s risk before Cook retires.
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