How Apple can solve Icahn’s Chinese puzzle
Carl Icahn is a billionaire, and like just about every billionaire he’s not about to give his money away to random people just in order to change their lives. Most billionaires prefer to control the shape of people’s lives. He’s an ‘investor’.
That’s lovely for him. And it’s good he thinks it’s his job to tell the firms he invests in how they should do business. It is heartwarming he cares so much.
He’s shrewd. And successful.
But as he pulls back his AAPL investments on strength of his concerns about China (I’m guessing he read this article), following that government’s decision to shut down iTunes Movies and iBooks just six months after Apple introduced the services there (CNBC), he’s missing something.
He’s going to be concerned about the impact on manufacturing — which makes sense…
But he’s missing a big trick.
The future of repetitive factory work is automation. So (we know) Apple and its prime manufacturer Foxconn are already investing in technologies to widen use of automation in the workplace; we also know that both firms are exploring new places to build ‘stuff’, such as India and (in a slightly less enthusiastic way given the challenges doing business there) Brazil.
Now, if I’m right and Apple and its ‘people’ already see the same level of threat that’s made Icahn cash in his shares, then it’s also likely the company has already thought how to navigate the problem. That’s what good management does, and with Tim Cook’s deep background in operations, Apple does have good management.
(Icahn still says that much, “Tim Cook did a great job. I called him this morning to tell him that, and he was a little sorry, obviously. But I told him it’s a great company,” he said).
Apple has even shown us what a not particularly smart robot can do for the company — with $40m gold extracted, recycling bot “Liam” is already turning a profit on the cost.
Can you see where I’m going with this, and why Icahn should stop investing?
Apple has a big opportunity to exploit here, if you can figure it out.
But Icahn may not have seen it. (Though I do wonder if he’s now going to invest in robot stocks, assuming Apple isn’t developing them already, albeit heavily disguised as “cars”. Maybe)