Apple Supplier Pegatron to Boost Cap Ex in 2015

Event: Apple Supplier Pegatron To Boost Capital Expenditures by 50% in 2015 Likely due to iPhone 6 and 6 Plus

I have a pretty simple policy when it comes to Apple supplier news.  1) Don't focus on the details, 2) Look for actual numbers and not just year-over-year percentages, 3) Put more weight on larger suppliers, especially the assemblers (those at the top of the supplier chain).  As a reminder, Pegatron was rumored to have won a contract for assembling somewhere between 30-50% of iPhone 6 units, which traditionally had been Foxconn's expertise. Judging by Tim Cook's comments during last month's earnings call and the popularity of the larger iPhone 6 Plus, I would assume Pegatron's capital expenditure boost represents new iPhone production capacity coming online versus simply reshuffling the deck between Foxconn and Pegatron. Demand is still outpacing supply in the U.S., and it's even worse in China. Apple will sell every iPhone it can produce this quarter so the rush is on to ramp up production. 

Microsoft Band Review Hits A Snag

Event: WSJ reviews the Microsoft Band, Microsoft's foray into wearable technology.  Basically, the device didn't work leaving the reviewer with nothing but negative things to say about the device and Microsoft's intentions. 

This review stood out to me, not because I'm interested in the Microsoft Band, but because of how negative a tone it had toward the device (and Microsoft). Very reminiscent of the old Microsoft that we all are still familiar with.  I don't think Microsoft has passed the litmus test for this device - why does it exist?  For Apple, Apple Watch hits a couple of "why it exists" points: iPhone notifications, a new form of communication, Apple Pay, personalized watch-faces (shocking how many people have mentioned this to me), and of course third-party app support. 

Taylor Swift Flees Spotify

Event: Taylor Swift pulled all of her songs from Spotify. 

We have been hearing the theme that artists aren't getting paid using Spotify.  Every once in a while someone will come out and try to refute the claim but to no avail. Paid downloads on iTunes have been on the decline, while paid streaming has been on the rise.  This Taylor Swift news reinforces the theory that Spotify isn't about making money for artists, but rather building exposure for content creators. If other big-time musicians leave Spotify, one has to assume the streaming model is put into question. 

MCX is Doing More PR and It's Just as Bad as it Sounds

Event: MCX gave an interview with USA Today. 

It's becoming clear that MCX was caught off guard by the sheer velocity and passion of backsplash aimed at the retailer consortium following the Apple Pay launch. While MCX has tried to do some PR in the past, the result has been nothing short of a disaster with confusing and conflicting answers. It seems that MCX is learning as they go. I continue to think MCX's fundamental purpose was made void by Apple Pay's ease and security focus. When Apple brings loyalty programs to Apple Pay and retailers have the ability to track purchases and know more about who is shopping in their stores, I have a hard time seeing retailers stick with CurrentC. In the meantime, we have a waiting game, and I assume more PR opportunities for MCX.