00:00 Speaker A
this is related to what’s going on with memory. It’s it’s that this is all just kind of screwing you, right? Like and it’s happening with phones, it’s happening with laptops, it’s happening.
00:09 Speaker B
By the way, if you were a financial analyst, that would be a great title for your It’s all just screwing.
00:15 Speaker A
Let’s copyright that right now. We’re going to cut, we’ll we’ll we’ll go offline, we’ll set it up there. But it it really is this this this continued data center build out, right? Part of the issue, this is from IDC, International Data Corporation. They they’re they point out yes, the straight of Hormuz issue, the uh issue with increased pricing for shipping, that is part of it, but the bulk of it is this memory and storage issue. And so, as a result, we’re seeing some phones that are just disappearing. There’s just no reason to have them. The margins aren’t going to be there. Uh they just don’t get made. Uh there are others that the prices have to increase as a result. And so that’s really causing a lot of demand destruction for this segment. And don’t forget this is a already mature segment, you know? So, the fact that you’re seeing this kind of decline year-over-year in in the teens is wild and I mean, this is just after we had seen that recovery from COVID where, you know, everybody went out beginning of COVID, bought new phones because how are you going to fly play, you know, what is it? Candy Crush or King something, I don’t know. whatever on your phone, uh, if you don’t have a new one. So, they bought all those, then they sat for a while, they started to buy new ones, we saw that last year, and now we’re just seeing that kind of collapse again.
01:29 Speaker B
Why in here? Why this struggling? Why is Android taking a bigger hit than Apple?
01:32 Speaker A
They make uh there are lower cost and more lower cost Android phones in the world. So, you know, uh entry level Samsung, things like that, uh Chinese uh market brands. Those are going to start to kind of disappear and the mid-range phones and some entry level phones will start to go up in price. Samsung, you know, IDC pointed this out, they have a great mid-range setup of phones. I mean, fantastic line of phones in in the mid-range area that, you know, will continue on. People will buy them. Uh they’re honestly a very good deal. Google also has a good deal with with their uh A-line, their Pixel A-line of phones. Um and you know, you have the the 17E out of out of uh Apple. but they’re able to kind of live in that space. Those lower-end phones that are anywhere below there, it’s just there’s just no way to make the margins work on that without increasing the price.
