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Photo taken on Aug. 14, 2023 shows iPhones at an Apple store in Hangzhou, East China’s Zhejiang province. On the same day, data released by TechInsights showed that Apple’s iPhone sales in China surpassed the United States for the first time in the second quarter of 2023, becoming the largest single market for iPhone shipments. 

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Global smartphone shipments this year are on track to be the worst in a decade, Counterpoint Research said in a report on Thursday, as the market is dragged down by the U.S. and China.

However, Apple could become the biggest player in smartphones this year by shipments, as its high-end iPhone sales remain resilient, the report added.

Measuring expected demand, shipments are not equivalent to sales and represent the number of devices that smartphones vendors send to retailers.

Counterpoint Research said it expects smartphone shipments in 2023 to decline 6% year-on year to 1.15 billion devices.

“Asia is one of the major hurdles to positive growth, as headwinds halt the economic turnaround anticipated for China at the start of the year, and the broader region experiences intensifying declines across emerging markets,” Counterpoint said in its report.

China’s economy this year has sputtered and not lived up to expectations of a rapid recovery, while consumers remain cautious on spending.

Chinese smartphone purchases, which used to average 450 million devices a year at their peak, have shrunk to 270 million per year — contributing as a major cause behind the decline in global smartphone sales, Karn Chauhan, senior analyst at Counterpoint Research told CNBC via email.

North America continues to dampen the global recovery, with a “disappointing” first half of the year setting the region up for double-digit full-year declines, Counterpoint’s report said.

“Despite strength in the jobs market and inflation falling, consumers are hesitant to upgrade their devices, pushing replacement rates for the US and globally to record highs,” the research firm said.

‘Apple in a good spot’

The premium end of the market with higher priced devices has remained quite resilient, despite a fall in overall smartphone shipments.

Apple is gearing up to launch its next flagship smartphone — the iPhone 15 — in September. That could give the company a strong showing going into the end of the year, Counterpoint said.

“But we’re watching Q4 (fourth quarter) with interest because the iPhone 15 launch is a window for carriers to steal high-value customers. And with that big iPhone 12 installed base up for grabs promos are going to be aggressive, leaving Apple in a good spot,” Jeff Fieldhack, research director for North America at Counterpoint Research, said in a press release.

Chauhan said the analyst firm expects Apple shipments to be up “marginally” year-on-year, given demand in markets like China and other Asian countries where there is a “growing premiumization trend” — meaning that people are willing to pay a higher price for phones.

Apple’s iPhone range helps Apple play in the premium segment of the smartphone market.

Counterpoint Research said that the U.S. company could this year take the top spot globally in terms of annual shipments for the first time ever. Samsung was the biggest player by market share in the second quarter of the year.

“It’s the closest Apple’s been to the top spot.  We’re talking about a spread that’s literally a few days’ worth of sales,” Fieldhack said. “Assuming Apple doesn’t run into production problems like it did last year, it’s really a toss up at this point.”

Apple has made a push into new markets, with India being a focal point for the company in 2023, as it tries to capitalize on local consumers’ appetite for premium devices. The U.S. company opened its first physical stores in India this year, with CEO Tim Cook visiting the country.

Apple’s ability to grow in the market will also factor into whether it ends up as the number one smartphone maker this year, according to Chauhan.

“The reception of the iPhone 15 and growth in non-core iPhone markets will decide if Apple surpasses Samsung at the full-year level or not,” Chauhan told CNBC.

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Bay Area commuters get free rides Tuesday morning due to Clipper card outage

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Bay Area commuters get free rides Tuesday morning due to Clipper card outage

Bay Area Rapid Transit (BART) passengers walk off a train at the Richmond station on March 15, 2023 in Richmond, California.

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Commuters in and around San Francisco rode into work for free on Tuesday morning due to an outage in the Clipper card system, which is used to handle payments for train, bus and ferry rides.

“ATTENTION: The Clipper system is experiencing an outage on all operators this morning,” the Bay Area Clipper account wrote in a post on X. “Please be prepared to pay your fare with another form of payment if required by your transit agency.”

Many buses were waving commuters on without asking for payment, and at Bay Area Rapid Transit (BART) train stations, the faregates were open, allowing travelers to walk through for free.

Clipper is owned by the Metropolitan Transportation Commission, which manages transportation for the nine-county Bay Area. The service is used by hundreds of thousands of tech workers in San Francisco and Silicon Valley.

The MTC website said there were 1.35 million unique Clipper cards — physical and digital — used in May, the highest monthly toll for the year and the most since December 2019, before the pandemic. A fact sheet from the MTC says Clipper is used by 800,000 transit riders a day across the region.

BART fare gates open on July 1, 2025, due to Clipper outage

Kif Leswing

BART, in particular, has undergone dramatic changes in recent years, most notably installing fare gates starting in late 2023, with full deployment expected to be completed by the end of this year.

In the first five months of the year, average BART station exits totaled between 170,000 and 182,000 a month, according to its website. Those numbers are way down from the pre-pandemic days of 2019, when averages were generally above 400,000 a month.

The MTC has plans to roll out an updated system called Clipper 2.0, which it says will be a “customer-focused, cost-effective fare collection system” with a “flexible platform for future fare structures.” Features include use across the various mobile operating systems, updated communication and “expanded retail, online and mobile sales.”

The update, however, has been routinely delayed, leading to tense confrontations at recent Clipper executive board meetings.

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Public companies bought more bitcoin than ETFs did for the third quarter in a row

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Public companies bought more bitcoin than ETFs did for the third quarter in a row

Ozan Kose | Afp | Getty Images

Corporate treasuries have surpassed ETFs in bitcoin buying for a third consecutive quarter as more companies try to benefit from the MicroStrategy playbook in a more crypto-friendly regulatory environment.

Public companies acquired about 131,000 coins in the second quarter, growing their bitcoin balance 18%, according to data provider Bitcoin Treasuries. ETFs showed an 8% increase or about 111,000 BTC in the same period.

“The institutional buyer who is getting exposure to bitcoin through the ETFs are not buying for the same reason as those public companies who are basically trying to accumulate bitcoin to increase shareholder value at the end of the day,” said Nick Marie, head of research at Ecoinometrics. 

Public company bitcoin holdings increased 4% in April, a tumultuous month after the market was rocked by President Donald Trump’s initial tariffs announcement, versus 2% for ETFs, he pointed out.

“They don’t really care if the price is high or low, they care about growing their bitcoin treasury so they look more attractive to the proxy buyers,” Marie added. “It’s not so much driven by the macro trend or the sentiment, it’s for different reasons. So it becomes a different kind of mechanism that can push bitcoin forward.”

Bitcoin ETFs, whose collective U.S. launch in January 2024 was one of the most successful ETF debuts in history, still represent the largest holders of bitcoin by entity with more than 1.4 million coins held today, representing about 6.8% of the fixed supply cap of 21 million. Public companies hold about 855,000 coins, or about 4%.

Regulatory relief

The trend reflects the significant regulatory relief the crypto industry broadly is benefiting from under the Trump administration. In March, Trump signed an executive order for a U.S. bitcoin reserve, sending a strong message that the flagship cryptocurrency, which has long been a source of reputation risk among many investors, is here to stay. The last time ETFs outpaced public companies in bitcoin buying was in the third quarter of 2024, before Trump was re-elected.

In the second quarter, GameStop began buying bitcoin, after its board approved it as a treasury reserve asset in March; health-care company KindlyMD merged with Nakamoto, a bitcoin investment company founded by crypto entrepreneur David Bailey; and investor Anthony Pompliano’s ProCap, kicked off its own bitcoin purchasing program and is going public through a special purpose acquisition company, or SPAC.

Strategy, recently rebranded from MicroStrategy, is still the main behemoth in the bitcoin treasury game. The company pioneered the strategy that more than 140 public companies globally are now emulating. It holds about 597,000 BTC, and is followed by the bitcoin miner Mara Holdings, which has almost 50,000 coins.

“It’s going to be very hard to catch Strategy’s scale,” said Ben Werkman, chief investment officer at Swan Bitcoin. “They’re going to be the preferred landing spot for institutional capital because of the deep liquidity around their equity, while these smaller equities are going to be really good risk returns for retail investors and smaller institutions that want more of that upside – that initial growth that comes in kicking off the strategy – because a lot of people missed it with MicroStrategy.”

A long-term case?

Marie suggested that 10 years from now, there probably won’t be so many companies committed to the bitcoin treasury strategy. Firstly, he said, the more that enter the category, the more diluted the activity at each firm becomes. Plus, bitcoin may be so normalized by then that proxy buyers are no longer constrained by rules and mandates around direct exposure to bitcoin.

“You can think about this wave as a bunch of companies that are trying to benefit from this arbitrage,” Marie said.

Werkman pointed out that most investors that are attracted to bitcoin treasury companies today already have a thesis around bitcoin. For them, leveraged bitcoin equities are likely how they try to outperform bitcoin itself, the foundational component of their investments.

“What people really like about these companies, and why they like to get into these smaller companies, is because they can do something that the investors holding spot bitcoin can’t do: go and accumulate more bitcoin on your behalf because they have access to the capital markets and can issue securities,” Werkman said.

There’s also likely to be a fair number of companies that convert their existing treasury holdings to bitcoin without pursuing leverage the way Strategy does, Werkman noted.

“They’ve got that ability to generate more and more value behind their shares, backed by bitcoin, plus whatever the operations of the company are generating. It’s a unique value proposition,” he said.

Don’t miss these cryptocurrency insights from CNBC Pro:

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AeroVironment stock drops 7% on offering plan to pay off debt

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AeroVironment stock drops 7% on offering plan to pay off debt

An image of a Quantix drone made by AeroVironment.

David Mcnew | Getty Images News | Getty Images

AeroVironment shares fell 7% Tuesday after the defense contractor said it plans to offer $750 million in common stock and $600 million in convertible senior notes due in 2030 to repay debt.

The drone maker said it would use leftover funding for general purposes such as boosting manufacturing capacity.

AeroVironment shares have soared 85% this year, ballooning its market value to about $13 billion.

Last week, shares of the Arlington, Virginia-based company rallied on strong fourth-quarter results, lifting higher as CNBC’s Jim Cramer called it the “next Palantir of hardware.”

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Last month, the company also closed its $4.1 billion acquisition of space-related defense tech company Blue Halo.

Earlier this month, President Donald Trump signed an executive order intended to boost drone production in the U.S. and crack down on unauthorized uses.

The company also has a high short interest level, which may have contributed to some of the recent gains, creating a short squeeze. This phenomenon occurs when a stock price surges, forcing those shorting the stock to purchase shares to cover their positions and prevent losses.

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