My New iPhone 11 & Some Implications On Business And Geopolitics

I got my hands on a new iPhone 11 a couple of weeks ago. No, it’s not the Pro version. That’s way too expensive and probably overkill for my needs.

My Phone Purchase

For the bean counters in this category, I actually re-contracted with M1 (a $30 plan) and got a few hundred dollars worth of handset subsidies. Telco bills are defying inflation and coming back down to the levels last seen a decade or even two ago. Good news for consumers, not so good for shareholders though.

Even after the subsidies, the purchase still set me back by more than $800. The trend seems to be more $$$ for handset makers, less $$$ for telcos. I managed to justify the purchase by amortizing the phone over 40 months, since my iPhone 6S Plus had served me really well for 40 months. In fact, the battery life is still decent (replaced it a year ago) and if not for the cracked screen, I might still have used it for another half a year or more.

Honestly, handphone technology is stagnating. Even though I was coming from a phone launched more than three years ago, everything feels incremental rather than life-changing. Facial-recognition is quite meh for me and the only feature that surprised me was the really long battery life.

Geopolitical And Business Implications

In fact, about half a year ago, I was looking at Huawei phones as potential replacements. Yes, I was prepared to migrate from the Apple ecosystem until the US government or Trump effectively stepped in. Looking at most reviews and feedback, in terms of hardware, Huawei has already caught up, if not exceeded their US counterparts. Not to mention that they were way cheaper.

But the threat of a ban and disallowing google apps to be installed on Huawei phones seem to have tilted the balance back in Apple’s favour. At least for me. The measures don’t even need to be implemented. Just the threat and the uncertainty is enough to sway many customers including me. Very smart tactics there.

After all, a handphone is supposed to bring convenience and not make things hard for customers by having to find alternatives to Google apps.

We tend to associate big tech companies like FAANG as global companies. We forgot that they are quintessentially American firms and are increasingly fundamental to American interests. These companies are good companies, that’s why they won the competition in America. But what makes them exceptional is the implicit backing of US government, military and the society which helps them to dominate globally. This is America’s form of imperalism and is largely considered to be more benign than alternatives. Perhaps that’s why our dear old Warren Buffett likes American companies so much and barely diversify.

This incident helped to gain clarity on certain stocks that I had previously shortlisted, namely the Jardine companies and HSBC.

They are British conglomerates with deep Hong Kong roots. In fact, they have a stronger presence in Asia than Europe. On the surface, that seems surprising. But when you consider that these companies’ lineage trace back to the East India Company and were actually borne out from Britain’s victorious Opium Wars, maybe not so.

The brewing civil war in Hong Kong has made valuations more attractive for these companies. However, the prices need to go down way more for me to be interested. Because I am thinking, when it comes down to the crunch, will the British government have the ability and will to back these British conglomerates?

Brexit is an irony for the country that fought two World Wars in order to exert its influence on continental Europe. WIth Brexit and its accompanying problems/politicking, British influence on the world will likely shrink even further in the coming decades. How much can the country, government and society back their overseas conglomerates?

And how does Xi see these companies, whose fortunes were built on the “unjust” Opium Wars which also began a century of shame for China? Business as usual? I am not so hopeful.