​As the US passes the CHIPS Act, the former head of the country’s “Big Fund” which funded a number of China’[s major semiconductor companies,  has been remanded to authorities and is under investigation.  This follows a similar investigation of a former executive of Sino-lc Capital, the manager of the “Big Fund” on July 15.  The big fund’s first investment round, which closed in 2018 was valued at RMB 138.7b ($20.57b US in today’s dollars) with 84% of funds going toward chip design and manufacturing, which included funding SMIC (688981.CH), YMTC (state), and UNISOC (state), and continues to sup[port China’s semiconductor industry today.
The Big Fund, aka The National Integrated Circuit Industry Investment Fund was created by the Chinese Ministry of Finance and China Development Bank Capital (state) in 2014, with major shareholders including China National Tobacco Corp (state), China Mobile (941.HK), and China Electronics Technology Group (state), also known as CEC, with both being on the US entities list due to connections to the Chinese military.  The fund has over 74 direct holdings and over 2,700 indirect holdings, with over 200 being outside of China, and uses its resources to make investments that furthers the goals of the Chinese government.  The funds from the first round were used by the end of 2018 and a 2nd round raising RMB 200b ($29.7b US) was completed in 2019.
In both investigations there was no mention of the reason for the inquiry, although mention of ‘serious violations of laws’ was referenced in statements made by the Central Commission for Discipline Inspection, and since the 2nd round there have been a number of visible and large failures in the Chinese semiconductor space, with HSMC (Wuhan Hongxin Semiconductor Manufacturing) being the most obvious.  The company was valued at $18.5b as a start-up and was to build out a 14nm line followed by a 7nm line but closed last year before producing any silicon.  The company ran out of money due to poor planning and was unable to raise capital after being accused of promoting technology it could not produce.  Whether the investigations are related to the HSMC debacle or some other issue remains to be seen.

The benefits of ultrasound imaging are well-known, especially when you find out you will be the parents of a baby or multiple babies, but typical ultrasound procedures require a trained sonographer whose abilities can help or hinder the imaging of the body’s soft tissue, with relatively short time limits on how long the session can last and where it can be done, which is usually in a doctor’s office or hospital.  A group of researchers at MIT have come up with a way to make such ultrasound imaging as simple as applying a stick-on patch, which is able to transmit ultrasound images wirelessly for up to 48 hours.
Those who have blood sugar issues are quite familiar with adhesive monitoring patches made by Dexcom (DXCM) or Medtronic (MDT), which allow continuous monitoring of blood sugar levels for ~14 days, but the MIT engineers have taken the patch idea to another level as these patches, which are placed on the skin over a small dab of gel, can send continuous high resolution ultrasound images to a monitor, allowing monitoring o recording those images while the patient is performing a normal routine.  As the capabilities of the patches are improved they can be tailored to placement on various parts of the body, transmitting to a smartphone that is able to analyze the image and notify the patient or doctor when an anomaly occurs.
The patches are a vast improvement over the low resolution devices that have been tried in the past, with a flexible adhesive layer made of a hydrogel/elastomer sandwich and a more rigid transducer array being combined to allow the patch to conform to the skin’s surface while remaining at a precise location with the elastomer keeping the hydrogel hydrated, which is necessary for the sound waves to penetrate internal organs.  The entire patch is roughly the size of a postage stamp and is ~3mm thick.  During voluntary human tests the researchers were able to see the diameter of blood vessels change when moving from a sitting to a standing position, changes to the shape of the heart during exercise, and revealed patterns in muscles during weight lifting that could indicate temporary micro-damage, essentially telling the user when the workout was beginning to cause damage.
While the project continues to work toward full wireless functionality and better algorithms for image diagnosis, the idea of wearable ultrasound imaging has many uses for monitoring fetal development or the growth or shrinkage of tumors and with a relatively inexpensive device, can be used by patients and clinicians to monitor bodily functions in real time and then disposed of, without the need for hospital based imaging systems, with the ultimate goal of making such devices as accessible to doctors and consumers as continuous blood sugar monitors have become.  There is a short (2:08) video below.
https://youtu.be/Kn2J8W4csNc
​

AU Optronics (2409.TT) reported 2Q results as previously noted, down 22.9% q/q and XXX y/y, generating an operating loss.  2Q weaker sales and profits were the result of lockdowns in China and weaker IT product demand from customers who have higher than normal inventory levels, which is predicament that most panel manufacturers faced and AUO was no exception.  The company has lowered its utilization rate (area) to ~70% and will ‘dynamically adjust’ that rate in 3Q, which means they have not set goals, other than to look at each product line and decide if they can generate a profit or positive cash flow before deciding to produce that product in 3Q.  While this sounds like something that should be done on a regular basis, when utilization and profitability is high there are some products that panel producers will run to satisfy large customers, even if they run negative CF.  Given the direr macro circumstances, that perspective has changed.
The company has guided to a decline in shipment for 3Q of between 14% and 16% although they expect ASP (area basis) to be flat based on mix changes, essentially focusing on those products that are in the premium segment of the display market, with automotive and medical singled out.  On a general basis management indicated that they are beginning to see raw material prices stabilize or decline and while transportation costs are still high, many of the logistic bottlenecks have abated.  While this is a positive for the company (and the industry) and is expected to lead to a 2% to 3% cost reduction in 3Q, the easing of transport bottlenecks also pushed more inventory into the channel in 2Q, which now has to be digested by customers and has forced the utilization reductions that are expected to continue in August.
On a medium-term basis, AUO has decided to reduce it capex for the 2022 year by 20%, from NT$45b ($1.5b US) to NT$36b ($1.2b US) and has delayed plans to build a new Gen 8.6 LCD fab until a better picture of the demand cycle becomes available.  The company did indicate that it intends to increase its exposure to the automotive display market, which is seeing improving demand and will continue to grow its ‘non-display’ businesses to offset the cyclicality of the display market.  Figure 1 shows the breakdown by product category of AUO’s revenue with TV declining from over 38% in 2Q ’18 to 16% in 2Q ’22 and the combined commercial, automotive, public display and other category moving from 20% in 2Q ’18 to 43% in 2Q ’22.  While this has helped AUO through various product category weak cycles, the overall weakness in the TV and IT display space in 2Q was great enough to generate losses.
All in, the quarter was generally as expected for AUO and the call rhetoric seems to indicate that while the company would like to be optimistic (they are hoping that brand discounting will burn through excess inventory quickly), they are unsure as to how long this scenario will last, and the capex cut is indicative of that concern.  AUO has responded well relative to competitive challenges from Chinese panel producers over the last two years by focusing away from generic panel production, but with almost all other panel producers now under pressure to find more profitable display products, will likely face increased challenges over product differentiation and capex could shift back to upgrading existing fabs to become more specialized and away from overall capacity expansion given the excess capacity currently existing in the display space.  It was a difficult quarter for AUO and the industry, and it looks like 3Q has started off in the same way, although we expect 3Q to end a bit better than it began and 4Q is going to be a reflection of consumer psychology heading into the holidays, which, given the rapidity in which the macro environment changed in 2Q, seems light years away and equally unpredictable.

​When LG Electronics (066570.KS) decided to end its smartphone business last year it offered to license its mobile patent portfolio to outside customers to generate income as it can no longer gain a competitive advantage from the IP itself.  Since 1976 LGE has made 24,677 patent applications in the US alone and has been granted 39,775 patents, with 55.3% of applications and 53.8% of approved patents filed and granted over the last 10 years and on the WIPO (World Intellectual Property Organization) database, LGE shows over 264,769 filings that reference the company name.
While this is a commendable indication as to the company’s R&D efforts, LGE has a reputation for not compensating those employees who were instrumental in creating that IP.  That seems to be changing, at least to a degree, as the company is offering compensation to current and former employees for their contribution to license or royalty generating IP for the first time, and indicated that it generated 800b won (~$615m) in profit in the 1st quarter of this year.  Compensation ranges from a few million won (1m won = $769 US) to millions of dollars, although the company has not revealed how it arrived at such figures to employees.
While LGE is involved in many IP related lawsuits, particularly with competitors, it is also involved in ~50 lawsuits with employees over compensation for IP development, which seems to lessen the altruistic tone to the LGE offer, but compensation is compensation, and settlements of those suits are the likely goal of the compensation offers, as legal costs and an eventual compensatory payout are the likely result of many of those lawsuits, it is probably a wise decision to make such offers, especially if you don’t have to disclose how the compensation was determined, and will likely avoid new suits going forward under the theory that if they get something now they will be less likely to sue in the future…

In our note of 7/15/22 we indicated a dispute between Samsung Electronics and China’s BOE (200725.CH) over what amounts to advertising royalties which have caused Samsung to reduce orders for LCD panels from BOE and has spiked interest from other Chinese panel producers who would like to fill the gap left by the Samsung/BOE disagreement.  As we also noted BOE’s Chinese rival Chinastar (pvt), owned by TCL (000100.CH) has already been to South Korea to sweet talk Samsung executives and local suppliers and is now expected to travel to Cupertino to schmooze with Apple (AAPL) folks to gain some traction as a panel supplier for MacBooks and iPads.
Chinastar has been reviewing plans to expand its OLED production capacity, potentially with lines dedicated to Apple, and would be expected to put additional pricing pressure on LG Display (LPL), the current panel supplier to the MacBook line.  China star is already a supplier of TV panels to Samsung, along with AUO (2409.TT), Sharp (6753.JP), BOE, and LGD, and Samsung is a shareholder in TCL, so the visit to Korea was one with some weight and a visit to Apple by TCL’s chairman would certainly create some anxiety at BOE and LGD.  As Apple is quite particular about their displays, the recent brouhaha over BOE’s changes to Apple’s qualified display design without prior approval has set BOE back a bit in terms of company reliability and once there is even the smallest amount of blood in the water[1] the sharks will gather.  We would assume Chinastar will gain share at Samsung and Samsung will use Chinastar to further its pricing leverage with its other suppliers, particularly BOE, and any success at Apple will help Chinastar gain share against BOE, although we expect it will take considerable time for Chinastar to build out dedicated Apple capacity.


[1] Fact – Sharks can sense between 1 part in 25m and 1 part in 10 billion depending on the chemical, which would be the equivalent of one drop of blood in a small swimming pool.

​TCL is a very price competitive brand, particularly when it comes to TVs and even more so when it comes to QD/Mini-LED TVs, as it was the first brand to release such combined technology and is a generation ahead of rivals, including Samsung Electronics and LG Electronics (066570.KS).  TCL recently released a 98” QD/Mini-LED TV to compete with a 98” offering from Samsung and noted that it had received 5,000 pre-orders for the sets in the 1st hour it was listed, which sell for ~$8,900 against Samsung’s recently discounted price of $13,000.  TCL has now stated that it has already sold more than 4,000 of the units, mostly during the 6/18 holiday, roughly 5x the number it sold last year.  Samsung has not disclosed its sales figures for its 98” QD/Mini-LED models.  Displays for the TCL 98” QD/Mini-LED model are produced by Chinastar, a subsidiary of TCL.
While it is hard to verify such specific sales figures, especially those from China, we expect TCL has had some success with its ultra-large QD/Mini-LED lines given both pricing and local familiarity, but the ultra-large TV market is a rarified one with expectations for less than 100,000 98” units sold this year, including other technologies, although the sales value is certainly enviable even for 4,000 units, which would be the sales equivalent of selling 54,769 TCL 55” QD/Mini-LED TVs based on current prices, and while the TCL98” TVs mentioned were sold in China for ~$8,900 you can steal last year’s model from Best Buy (BBY) at the currently discounted price of $8,500, although you would have to wait until August 3 to have it delivered, especially as it would be hard to fit in a standard vehicle as the box is 5 feet high and 8 feet long.

Silver tooth filings are either a sign of poor dental health or street cred, but those filings have between 22% and 32% silver, mixed with tin, and zinc, with the largest component being mercury (~50%).  But wait, isn’t mercury dangerous and absorbed through the skin and haven’t there been concerns about eating tuna because it contains high levels of toxic mercury? The answer is yes and the use of mercury has been regulated since 2013 and its use restricted in a variety of consumer products.  Mercury batteries, once used in walkie-talkies and transistor radios, are gone due to concerns over mercury leaking into the environment and while that silver amalgam is still used in dentistry mercury is considered a highly toxic substance and has been removed from almost all consumer products except one big one, fluorescent lights.
Mercury vapor fills those endless rows of lighting tubes that are the stalwart of grocery, big box retail, and warehouse lighting, as they are between 3 and 5 times more efficient at producing light as incandescent light bulbs, and cheap hotels still have those ugly compact fluorescent bulbs in bathrooms because they lowered operating costs, but soon that will all be a thing of the past, at least in Vermont, as a new law passed this month makes it the first state to phase out the sale of linear fluorescent lighting in favor of LEDs, with Rhode Island and California to follow.
Based on an 80 page report by the American Council for an Energy Efficient Economy, a non-profit research group that develops policy and standards on energy waste and climate change for appliances, equipment, and lighting, Vermont has decided that starting on January 1, 2024, the sale of those mercury-based fluorescent tubes will be prohibited, particularly the 4 foot types that are the most common.  Earlier legislation passed in 2011 mandated that lighting manufacturers must arrange for the collection of expired/used fluorescent lamps at various sites and safely dispose of them, although we expect many never make it to such collection sites.  That law contained a provision that said the bulbs should be banned completely once a superior alternative was found and various groups petitioned the Vermont Department of Conservation citing LED based tubes as an alternative.
The study provided the table below as a comparison between fluorescent and LED T8 bulbs:

​[1] Lumens/watt

A full transition from fluorescent lamps to LEDs would provide large mercury and CO2 emissions reductions according to the study, which stated that by 2050 the ban would:

• Reduce the amount of mercury shipped in lamps by 16,000 lbs.
• Reduce Carbon Dioxide emissions by 18 million tons, which is equal to the annual emissions of 4 million typical passenger cars.
• A typical school with 980 fluorescent lights would save about $3,700/year in electricity cost by switching to LEDs, which would amount to over $24,000 over the expected life of the replacements.
• A full transition to LEDs would yield $44 billion in national NPV savings.

However as the EU has already eliminated all general purpose fluorescent lighting exemptions for RoHS rules, which will phase them out by next year, there are concerns that the US will become a dumping ground for fluorescents that have been eliminated or restricted in other countries unless other states join Vermont in passing such legislation or there is a federal mandate.  There have been industry associations that have lobbied against the ban  citing cost  and availability, but it is a hard case to make when considering the toxicity of mercury and the energy savings, especially after the heat wave that much of the US has been experiencing recently.

​which will likely include the introduction of the Galaxy Z Fold 4 and Z Flip 4, Samsung’s latest entries into its foldable smartphone line.  Last week we noted that we were less concerned with feature changes in both models than we were about the price, which we hoped would be reduced as Samsung gained scale, although our actual expectations are for flat y/y pricing for the new models.  That said, almost immediately after we published our note, rumors began surfacing that Samsung was going to raise the price of the foldables to compensate for increased material and  logistics costs, certainly a negative in our view.
Most recently we received pricing data from Korea that indicated that Samsung had reached a tentative price agreement for the new models with a mobile carrier (domestic) that would hold the price of the Galaxy Z Fold (256GB) at the same price as last year, while the Galaxy Z Flip (256GB) would increase by 3.6% and the 512GB models would remain at last year’s price.  Given the strength of the dollar there is some play here relative to what will be US pricing, but it seems that Samsung has, at least for now, kept new model pricing relatively intact if the Korean pricing is any indication, which we would see as a positive for foldable sales given the recent rumors, and if you pre-order (Korea) they will throw in a pair of Galaxy Buds 2, a case and a 1 year phone care package. 
While blogs have been chattering about the miniscule changes in bezel size, notch shape, or camera specs, most consumers at least start evaluating new smartphones based on price, so a small or no change should keep the foldable playing field relatively level heading into the 2nd half.  It’s now up to Chinese rivals to see if they are able to cut prices for new foldable models in the current inflationary environment in order to gain share against Samsung, whose share of the foldable market was between 85% and 90% last year.

LG Display (LPL) reported 2Q results of 5.607t won ($4.278b US), down 13.4% q/q and down 19.5% y/y.  Operating income was a loss of 488b won ($372.4m US), the first quarterly operating loss since 2Q 2020.  Gross margins declined from 12.6% in 1Q to 4.9% in 2Q, against 20.8% in 2Q last year as volumes decreased and panel prices declined.  Little in the basic numbers was a surprise although for the first time in the last 4 quarters, the percentage of revenue generated by the production of TV panels increased, although likely as a result of IT panel shipments and prices slowing more rapidly.  On an area basis LG Display saw both shipments and capacity decline, which has been the case since 4Q 2021, with the area utilization rate rising slightly from last quarter’s low of 70.4%.  We note this is not full fab utilization, meaning against the total capacity of the fab, but against the area currently being used.

The company attributed the weakness to soft demand, weak LCD panel prices, and disruptions in the supply chain in China, resulting in lower LCD panel utilization and shipments, although OLED TV shipments were up in the quarter, a ray of hope for OLED emitter supplier Universal Display (OLED) that derives material sales and unit price royalties from LGD.  OLED TV sales were up ~25% y/y in the 1st half, however the company is forecasting that while there will be OLED TV shipment growth in 2H, it will be at a slower pace than in 1H,, likely closer to 13% to 17% as retailers are expected to order more cautiously in 2H.
In that same vein, inventory levels increased in 2Q by 11.6%, which is concerning considering the company is forecasting continued soft demand at both TV set manufacturers and retailers as a result of excessive inventory levels at those points in the supply chain.  The rational, despite the company’s expected further reductions in utilization were based on new model introductions and the potential need for higher inventory levels heading into the holiday build period, although Figure 4 would indicate that such levels are out of line with historic norms, with the company indicating it expects to return to more normal inventory levels by the end of the year.  We expect some of the inventory build in 3Q is related to the company’s display supply contracts with Apple (AAPL) for the upcoming iPhone, but no specifics were given.
Guidance for 3Q was a bit more specific, with area shipments projected to be up between 4% and 6% q/q as IT and OLED shipments recover, and ASPs (Area basis) increase as the share of smartphones and wearables, which carry higher profitability on an area basis, increase in 3Q, but at the same time the company was forecasting IT panel prices to continue to decline and TV panel prices to also continue to decline, but at a more gradual rate as other LCD panel producers continue to lower utilization rates.

As the risk levels for panel manufacturers rises most companies indicate a desire to expand their product lines away from more generic LCD IT and TV panels and to more value-added displays that are both less competitive and carry higher margins, and LGD indicated the same mantra, with a focus on expanding its already market leading automotive display penetration while increasing both its OLED TV penetration rate and expanding what it calls a ‘made to order’ business, which we assume to mean more product co-development with large customers. 
Much of this is the same corporate speak that appears when the macro environment begins to sour, and should be addressed more closely when things are going well, but LG Display, along with Samsung Display (pvt) has been in the camp of winding down its large panel LCD production for the last few years, although at a much slower pace than their rival.  This brought up the question of the company’s plans for that process, with LGD being a bit more open about plans for their LCD large panel business.  The company’s largest production line known as P7 is a Gen 7.5 a-Si LCD line that was built to produce 225,000 sheets/month.  The company has already brought capacity down to 150,000 sheets and plans to reduce that by another 60,000 during 2H and another 30,000 in the 1st half of next year.  The original plan was to end all production by the end of next year but the company has indicated that they will likely accelerate that process now that large panel prices have been declining.
While we understand that LGD has supply contracts with customers that it must fulfill, and certainly does not want to maintain fabs that run at a small portion of stated capacity, we have been surprised as to how long it took for the company to make the decision to accelerate the wind-down process, with the company stating that the fab had been running at high utilization rates, but as of last July (2021) large panel prices began to decline at a rapid pace and it seemed inevitable that the high utilization rates of 1H 2020 were not sustainable, at which point the push to cut large panel exposure should have been made.  The company did indicate that its Gen 8 fab in Guangzhou China will not be closed but will be converted to the production of smaller IT panels, rather than larger TV panels, for which 10% - 15% has already been completed, with the remainder by the end of 2H next year, which will reduce the company’s exposure to large panel production by 40% (their number).  Other company fabs in Korea, which are Gen 5 and Gen 6 are already oriented toward IT panel production.  The company indicated that the profitability of its IT panel production declined in 2Q but saw less impact than the overall market due to its focus on high-end products.
While the question was asked about plans for expansion of the company’s OLED TV capacity, no answer was given other than the general reference to the development of new OLED oriented products (including automotive), but more importantly when asked about the on-again off-again negotiations with Samsung Electronics (005930.KS) concerning that company’s purchase of multiple millions of OLED TV panels, management indicated that such negotiations had taken place but there was nothing in progress, followed by the more general comment that the company would negotiate with any major customer ‘as long as they recognized value’, which would seem to indicate that price negotiations between the two did not end well.
The circumstances under which panel producers such as LG Display had to operate in 2Q were difficult, but not unexpected and we are always surprised at how slowly pane producers react to what seemed an inevitable conclusion as to panel prices, both TV and IT, and now that the inevitable has occurred panel producers seem a bit surprised at how rapidly things deteriorated, although few were complaining when pane prices were rising rapidly and hitting unprecedented heights.   Now it seems everyone, LGD included, have gained ‘religion’ and are looking at a more conservative approach to production and longer-term plans.  Of course it is easy to me an arm-chair quarterback but there is one consistency in the CE space and that is history repeats itself, so when things like prices get far out of line with historic norms, the elastic band always snaps back, so we wonder if those being ‘snapped’ really thought things were really at ‘a new normal’ or they just did not want to think about anything other than near-term prospects.  Its actually not that hard to answer.

​About a year ago we noted that there were rumors that quantum dot leader Nanosys (pvt) was rumored to be in talks with a SPAC firm in order to bring the company public.  Those rumors died down, particularly as the SPAC market slowed and while we had our doubts about the story in the first place given Nanosys’s investor list, which includes Samsung (005930.KS), BOE (200725.CH), and LG Display (LPL) giving them both considerable technology credibility and financial access, we note that the company has just announced the completion of a $50m financing round with new investors Fortress Investment Group 9984.JP), Centerbridge Partners (pvt), and Kilonova Capital (pvt). 
While we miss the opportunity to get detail on Nanosys’s financials, we believe a private financing was certainly more beneficial to the company’s timelines and goals than a SPAC IPO would have been, especially to the growth of the company’s quantum dot business, both as it relates to extending the life of LCD technology and its application in the micro-LED space and the potential for self-emitting quantum dot displays.  Quantum dots seem to be a solution that solves some of the complexities surrounding a number of RGB self-emitting materials and systems, which gives the technology sustainability across all of the current display technologies and those being developed over the next few years and should provide ample room for R&D and product expansion for Nanosys with the additional financing, along with the potential for quantum dots themselves as a self-emitting material.

Smartphone prices vary on a country by country basis, with logistics and currency playing a significant roll in setting those prices, and with the rapid depreciation of the yen against the dollar this has become quite apparent as Apple (AAPL) raised iPhone prices in Japan as of July 1 in order to protect profitability as profits are converted back to dollars.  Not only are current models now more expensive, but older models have also seen price increases and less expensive models like the iPhone SE are becoming scarce, particularly the iPhone SE (2nd Generation) Apple’s low-priced offering released in April 2020.  That phone (used) used to sell for ¥20,000 ($146.34 US) but is now selling for ¥30,000 ($219.51 US), a 50% increase according to retailers in Tokyo.
Other iPhone models have also seen increases, such as the iPhone 13 (128GB), which was released in September 2021, and has gone from ¥98,800 ($722.91 US) to ¥117,800 ($861.92 US), a 19.2% increase, and the iPhone SE (3rd Generation), which was released in March of this year, has increased in price from ¥57,800 ($422.92 US) to ¥62,800 ($459.50 US), an 8.6% increase since its release., and the iPhone 11[1] (released 9/2019), the iPhone 12 (released 10/2020), and the iPhone 13 (released 9/21) have increased in price by 15.4%, 8.5%, and 7.8% respectively.  A recent survey added that ownership of used phones (purchased used or refurbished) in Japan in April of this year was 11.6%, almost 2 times the rate over the last 20 years.
While certainly disconcerting from the Japanese consumer’s standpoint, however iPhone prices in Japan are still below those of the equivalent phones in other countries as shown in the table below, which shows both the pre and post price increase in Japan compared to the US, Germany, and China representing the North American, European, and Chinese markets[2], although the US price does not reflect retail sales tax as they vary from state to state.  As the price rises in Japan it pushes the iPhone purchaser’s income threshold higher but still represents a bargain for those in most other countries and ‘pre-increase’, the Apple direct sales sites in 34 countries averaged $925.23 for the iPhone 13 (128GB), while the Japanese site price was $723.02, the lowest of all.  Some Japanese retailers have noted that since Japan’s COVID tourist restrictions have been eased the number of iPhones sold, both new and used, has increased, with some purchasing more than one, leading to speculation that they are being resold in other countries.
 


[1] 256GB for all iPhone 11,12,13

[2] Table conversion rates are 139¥, 1€, and 6.7 yuan to the dollar.
 
 
 

With 4 of the top 5 selling smartphones in Japan being iPhones (52% share in April 2022), the Japanese smartphone consumer is very sensitive to Apple smartphone price changes and fears that further price increases in existing or upcoming iPhone models will price them out of the Japanese market, despite their low cost relative to the global averages, so it will be up to Apple as to whether it will continue to increase prices if the yen depreciates further against the dollar.  That said, Apple has US investors to consider and a larger vested interest in the US Federal Reserve’s policy moves than it does in the Bank of Japan’s and the US smartphone market alone is over 5 times the size of the Japanese market, so the decision to raise prices based on the spread between the yen and the dollar was actually an easy one and will continue to be so if the trend continues.