Asymco Bulletin 020 - July 5, 2025
by asymco-admin
Asymco Bulletin is a digest of all the work we have published for the week ending July 5, 2026.
Research
Memory is a Commodity
A commodity is a product whose price does not rise when performance improves, so businesses trading in commodities compete on production and distribution rather than design. That is why Apple does not build memory: it would lock itself into its own cost structure and give up the flexibility to negotiate across vendors. Memory makers can only make money by lowering cost per bit, which they do by shrinking process nodes. Beijing spent hundreds of billions over more than a decade building strategic memory suppliers; twelve years in, that industry may only be reaching profitability because of the current imbalance. →
Nota Bene
Apple's Q1 iPhone sales in Africa grew 44% → Counterpoint Research reports Africa's smartphone shipments fell 12% in Q1 2026, hit by fuel prices, memory-driven price rises, and extreme price sensitivity. iPhone bucked the trend and grew 44%. Apple does not adapt to markets; markets evolve to become Apple markets. →
Counterpoint: Apple to Hit Record Market Shares in Smartphones, Laptops, Tablets; Watch Share Also Set to Grow → Counterpoint expects Apple to reach its highest-ever share in smartphones near 25%, plus record share in laptops and tablets in 2026, while most OEMs face double-digit declines. Stable pricing, high margins, and supply chain control let Apple weather the memory crisis best. The article predates the June 25 price increase, but the conclusion still holds. →
Office Hours Q&A
Earnings are an opinion, cash flow is a fact → Dave E. asked whether the hyperscalers face an AI bust and how Apple would adjust. There is revenue but little profit or free cash flow because everything is being reinvested. The bubble bursts only if debt gets mispriced, and so far AI has not become a debt story. →
Why is betting against Apple the extraordinary claim? → An Office Hours question about Apple's forward prospects given 26.6% CAGR over twenty years. Analysts make one-year calls swamped by short-term noise, while the CAGR reflects a decades-long trend. The extraordinary claim is that a flywheel with this much momentum suddenly stops. →
Will agents kill the app economy? → Question was: whether agentic AI would consolidate revenue to Apple and agent providers. Apple keeps trusted permissions inside apps: apps become callable APIs, Apple still hands off credentials, and the app economy lives on alongside intent, touch, and vision. →
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