Three things the iPhone 15 says about the economy

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Wait times for the basic iPhone model in the US is almost twice as long this year compared to its predecessor. According to Counterpoint Research, US customers can expect delivery in around 10 days, up from six days when the 2022 upgrades were launched. In China, the largest overseas market, wait times are roughly four times longer.

But as more customers take delivery, we believe the rollout of the new devices highlights three broad trends in the global economy.

In a truly global economy, companies can't escape geopolitics. Apple’s new iPhone will contain an advanced chip designed by Apple in the US but manufactured in Taiwan, and the iPhone itself is largely assembled in China. This embodies the complex global supply chain necessary to produce advanced technologies. Semiconductors are one of America’s largest exports, but even the largest producers rely on one another for materials. The 2022 CHIPS Act aimed to address this by funding programs that bolster security in key technology sectors.

The economy is increasingly circular. Apple has been stepping up efforts to encourage recycling, through discounts on upgrades and reclaiming the materials in older devices. This hints at the value of the underlying parts. The iPhone 15 Pro and Pro Max use a battery made with 100% recycled cobalt. The devices also use 100% recycled rare earth elements, 100% recycled aluminum in the internal structural frame, and 100% recycled copper in the main logic board—among other examples. The switch to USB-C follows new global regulations that mandate universal charging ports, in an attempt to cut electronic waste. We see Apple’s design change as indicative of what’s to come as companies look to reduce reliance on increasingly scarce materials.

Consumers are increasingly focusing more on experiences over possessions. One of the notable shifts in consumer behaviors in the wake of the COVID-19 has been a greater willingness to spend on travel or entertainment. While iPhones are a consumer “good,” Apple appears to be placing a greater focus on providing consumer experiences. The A17 chip will allow game makes to produce iPhone versions of more popular games. Apple has also said its upcoming software update will enable developers to create spatial content that can be viewed later on Apple's VisionPro headset. The intention is that this will look and feel similar to a 3D experience.

So, in our view, the latest release highlights several key themes for investors, including the growing importance of the circular economy and the increasing focus on consumer experiences. More broadly, technological disruption across industries is creating opportunities for investors to add longer-term portfolio growth potential. In the technology sector, we focus on disruptors in the software, internet, and infrastructure fields, as the impact of artificial intelligence broadens beyond enablers and platforms to also include software and solution providers.