Apple Inc. recently became the first company in the world to exceed $3 trillion in market capitalization, which has attracted global attention. However, just as Apple's stock price is climbing, Pegatron, its second-largest foundry in China, announced the suspension of production activities at two factories in Shanghai and Kunshan, involving 90 billion production capacity and 100,000 employees, due to the impact of the epidemic.
The move was seen as a signal that Pegatron was abandoning the Chinese market and turning to India, and it also raised questions about the stability of Apple's supply chain. So, what is the relationship between Pegatron's shutdown and Apple's market capitalization? Is Apple's market value growth really irrelevant to the development of the artificial intelligence industry?
Pegatron shut down the factory, and Apple's supply chain suffered
Pegatron is Apple's second-largest foundry in China, mainly responsible for the production of products such as iPhones and iPads. Pegatron's two factories in Shanghai and Kunshan reportedly account for 20 to 30 percent of the world's iPhone production capacity. Due to the impact of the epidemic in Shanghai, Pegatron was forced to suspend production activities at the two factories, resulting in a disruption in Apple's supply chain.
This is a huge blow to Apple, as the iPhone is Apple's most important source of revenue, accounting for nearly half of its total revenue. If iPhone shipments are affected, Apple's revenue and profits will also be hit.
In addition, Pegatron's shutdown has also made Apple's competitiveness in the Chinese market, Apple's largest overseas market and the growth engine of the iPhone. If Apple can't meet the needs of Chinese consumers in a timely manner, it could lose market share and user loyalty.
Apple's market capitalization has returned to 3 trillion, and the demand for iPhones is strong
Although Pegatron's shutdown put pressure on Apple, Apple's stock price was not affected much, instead hitting an all-time high at the beginning of the year, bringing its market value back to the $3 trillion level. This achievement reflects Apple's strong resilience and innovation capabilities, and shows that Apple's market value growth is not entirely dependent on the Chinese market and supply chain.
In fact, the main driver of Apple's market capitalization growth is the strong demand and high volume of shipments of iPhones. According to analyst estimates, Apple shipped 83 million iPhones in the fourth quarter of last year, 3 million more than expected and a record high. Demand for iPhones is mainly coming from developed markets such as the United States and Europe, as well as emerging markets such as India.
Apple's iPhone 15 series has been warmly received by consumers, mainly because it is equipped with a 5G network and an A15 chip, which offers faster speeds and stronger performance. In addition, Apple has also expanded its market coverage and user base by lowering the price of older iPhones to attract more replacement users and new users.
Apple's market capitalization is growing, and artificial intelligence is working
Some industry insiders said that Apple's rising market value has nothing to do with the development of the artificial intelligence industry, mainly relying on the strong demand for iPhones and the revenue growth brought by a large number of shipments. This statement is not entirely true, as Apple's market capitalization growth has also been driven and influenced by artificial intelligence.
First of all, although Apple rarely mentions artificial intelligence in its latest financial report, in fact, Apple has been investing a lot of resources and energy in the development and application of artificial intelligence technology to improve the quality and experience of its products and services.
For example, Apple uses a neural engine on the iPhone 15, which enables smarter photo recognition and editing, as well as more natural voice interactions and translations. Apple has also made extensive use of artificial intelligence in products and services such as Siri, Face ID, AirPods, Apple Watch, etc., to provide users with more convenient and personalized features and content.
Secondly, Apple also has ambitious plans and layouts in the field of artificial intelligence, and is expected to launch its first augmented reality and virtual reality device, Vision Pro, next year, which is another new computing platform since Apple launched the Apple Watch in 2014, and an important step for Apple to enter the metaverse.
Vision Pro will leverage artificial intelligence technology to provide users with an immersive visual and auditory experience, as well as richer interactive and creative features. The Vision Pro is expected to be Apple's next growth point, and it will also bring new impetus to Apple's market capitalization growth.
Epilogue:
The truth behind Pegatron's closure of factories in mainland China, but Apple's market value has returned to 3 trillion, is that Apple's market value growth is not entirely dependent on the Chinese market and supply chain, but is driven and influenced by the strong demand and large shipments of iPhones, as well as artificial intelligence. Apple's market capitalization growth reflects Apple's strong resilience and innovation, as well as Apple's competitive advantage and leadership in the global market.
Apple will continue to face various challenges and opportunities in the future, and will need to constantly adapt and optimize its products and services to meet the needs and preferences of users, as well as the development and change of technology. Whether Apple's market value can continue to remain high depends on whether Apple can make more breakthroughs and innovations in the field of artificial intelligence, as well as create more surprises and value in the field of the metaverse.