MrKnoot @MrKnoot: "𝗔𝗽𝗽𝗹𝗲 𝗥𝗲𝘃𝗲𝗮𝗹𝘀 𝗖𝟭 - 𝗙𝗶𝗿𝘀𝘁..."

United Kingdom

𝗔𝗽𝗽𝗹𝗲 𝗥𝗲𝘃𝗲𝗮𝗹𝘀 𝗖𝟭 - 𝗙𝗶𝗿𝘀𝘁 𝗜𝗻-𝗛𝗼𝘂𝘀𝗲 𝟱𝗚 𝗠𝗼𝗱𝗲𝗺 This here is the real headline, not the iPhone 16e. And my God, what a headline. Several billion dollar effort over the course of 7 years have culminated in this monumental technical achievement. Further vertical integration that can shake up another competitor’s grip out of the logistics network that comes from manufacturing iPhones. This could possibly be the biggest news in the hardware business since the release of the first M chip. At the stage Apple is with the iPhone business, the most impactful thing they can do is not to increase the market. It’s to deepen the moat around their business. That is mostly accomplished by increasing efficiencies and sinergies within your market. I started to get interested on the stock when I noticed how methodically they were doing just that and I went all in when I knew about their development of the M series. Such improvements not only improve margins, they make products better. The first M1 was a ground-breaking change for the laptop market, giving $AAPL (Apple) a lead in both product quality and cost-effective production. The release of the C1 Modem is another one of those moments. To the shock of nobody, one of the most crucial parts of the engineering of a phone is the modem. That is, the little machine that ensures internet connection. This is often overlooked by the consumer for one reason: Almost everyone in the market - including Apple - has been using the exact same modems. The ones $QCOM (Qualcomm Inc) makes. And therefore there was no comparison to make, everyone has been taken for granted the current modem capabilities as an inevitability. This is only natural when you know that Qualcomm has been holding an iron grip on the engineering and manufacturing of phone modems for decades. Keeping astronomical prices and absolutely ruthless deals that were only possible because phone makers had literally no alternative. They have enjoyed a similar position $INTC (Intel) had a couple of decades ago in the PC market with their chips. What happened to them? $AMD (Advanced Micro Devices Inc) and $NVDA (NVIDIA Corporation) happened to them. And eventually the M chip series happened to them. And now C1 is what’s happening to Qualcomm. Many engineers have said that it might be near impossible to build this. Radio-Frequency engineering is a nightmare of a field. Tons of weird edge cases, interference issues and nearly unpredictable physics. Most of the technology we take for granted right now is built on decades and decades of tribal knowledge that Qualcomm was gatekeeping. Do I think the C1 will actually outperform the current Qualcomm’s line-up? I actually think it’s going to be worse. Simply getting C1 out the door is a monumental technical achievement and I don’t want you to read this as me downplaying it. Apple needs to test this in as many devices as possible to get actual, real data of people using it in strange places and under weird conditions. With this data they’ll be able to iterate, refine and make the next modem (C2) better. Apple themselves are downplaying this! Two sentences in the press release and 15 seconds in the announcement video of an iPhone that has nothing going for it besides being cheaper. Apple tends to be pretty proud of their in-house technical achivements and they love to brag about vertical integration. But they’re downplaying this one because they know it’s actually not a great product right now. There’s a very good reason this is launching on the entry level phone and not on the Pros. These devices will be the guinea pigs. A high-volume seller with higher-tolerant users are the perfect petri dish to tinker with the development of this until they get it right. And getting this right is crucial. For it has the potential to improve both iPhones connection speeds and robustness, but most importantly battery. Right now, unsuccessful mobile network searching burns through a phone’s battery and is probably the main culprit when you rush for a charger at the end of a day. If anyone has capacity to take this and fully integrate it with the main chip, the OS and the entire phone to make it a far more efficient system is Apple. Not only making an unequivocally better product, but doing so while further expanding the profit margin of selling that product. This is huge news. Both for consumers, as more competition in the 5G modem market can only improve things, and for Apple investors - as we see yet another example of why this company deserves to be the giant it currently is. People place far too much importance on flashy, consumer-facing product achievements that are shallow and meaningless. While the true engineering feats that actually unlock the possibilities for exciting new product development goes unnoticed. This is the sort of thing Apple’s competitors wish they could do.

5 Mentioned

AAPL

Apple

QCOM

Qualcomm Inc

INTC

Intel

AMD

Advanced Micro Devices Inc

NVDA

NVIDIA Corporation

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