APPLE: Bold Bet on India

Apple, in collaboration with its suppliers, is setting ambitious targets to significantly increase iPhone production in India, aiming to exceed 50 million units per year within the next two to three years. This expansion plan also includes the production of additional tens of millions of iPhones in the subsequent years, as reported by insiders. Such growth would position India to contribute roughly a quarter of Apple's global iPhone output, gradually increasing its market share towards the end of this decade. However, China will maintain its status as the leading producer of iPhones.

Despite encountering obstacles such as inconsistent infrastructure and stringent labor laws, Apple has been progressively shifting more of its production to India. The company is navigating challenges like powerful labor unions, especially in states usually considered pro-business. These unions are contesting proposals for 12-hour workdays, which are often crucial for Apple's suppliers during peak production times.

In line with these plans, a new Foxconn facility in Karnataka, India, is slated to start operations in April. This plant is part of Apple's strategy, with expectations to manufacture about 20 million mobile phones a year, mainly iPhones, in the next two to three years, according to those with intimate knowledge of the project.

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LULULEMON: Q3 Flex and Future Flicker

On Thursday, Lululemon reported a strong third quarter with increased demand and a positive start to the holiday season. However, post-market shares fell due to a cautious fourth-quarter outlook. The company's third fiscal quarter saw adjusted earnings of $2.53 per share and revenue of $2.20 billion, slightly surpassing expectations.

Net income for the quarter was $249 million, down from the previous year's $255 million. Sales grew by 19% to $2.2 billion, with a 12% increase in North America and a 49% jump internationally.

Despite this, Lululemon's forecast for the fourth quarter was lower than anticipated, expecting sales between $3.14 billion and $3.17 billion, slightly below the predicted $3.18 billion. The company also estimates full-year sales to reach between $9.55 billion and $9.58 billion.

AMAZON: Payment Tango

Amazon recently announced a significant update to its payment methods, revealing that Venmo will no longer be accepted as a payment option starting January 10. This change, communicated to customers, marks a notable shift in Amazon's payment policy.

The company clarified that while direct Venmo payments would be phased out, Venmo-branded debit and credit cards will still be accepted. Venmo also confirmed this update on its website, indicating that the change is part of recent adjustments. Customers who currently use Venmo for Amazon purchases can continue until the specified date in January 2024.

This move comes as a surprising reversal from Amazon's earlier decision in October, where it had expanded its payment methods to include Venmo, a service popular for its instant money transfer feature among users.

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Gaming Goldmine

Grand Theft Auto 6 is set to be released in the next 18 months.

The Grand Theft Auto series are video games published by a company called Rockstar Games, which is owned by Take-Two Interactive, a publicly traded company. Take-Two owns another popular video game label called 2K and brands like Bioshock, Borderlands, and Red Dead Redemption, among others. 

Grand Theft Auto is one of their leading revenue sources. The last Grand Theft Auto game was released in 2013. It cost $265 million to make but generated a crazy $7.78 billion in revenue, a gross profit of ~2,805%. 

Take-Two sold 185 million copies of Grand Theft Auto 5, but the company makes the bulk of its money from in-game purchases and subscriptions. The newest version of this game is set to cost $2 billion due to cutting-edge graphs and technology. They expect the same type of return as the last game. This is projected to be the most hyped video game release in history and has the potential to be an absolute cash cow for Take-Two Interactive. 

Chart of the Day

📊 This chart shows the U.S. monthly pending home sales index from March 2001 to October 2023.

The author, publisher or insiders of the publisher may currently have long or short positions in the securities of the companies mentioned herein, or may have such a position in the future (and therefore may profit from fluctuations in the trading price of the securities). To the extent such persons do have such positions, there is no guarantee that such persons will maintain such positions.

Sources:

1. CNBC (www.cnbc.com)

2. CNBC (www.cnbc.com)

3. CNBC (www.cnbc.com)