Daniel Newman, Founding Partner & Principal Analyst at Futurum Research, discusses whether Apple's Peek Performance event will be enough to lift shares and what the impact of cutting ties with Russia means for the tech giant's growth prospects. 

Opening Bell

What Investor Should Pay Attention to During Apple's Peek Performance Event

Here to talk more about it. Daniel Newman, principal analyst at future. Um research. Thanks so much for joining us. We know apple stock is down over 13% year to date. But do you see this debut of these products as necessary for growth and what are you expecting from this event? Yeah, thanks for having me. The event in the spring is always a little bit lighter, tends to be an opportunity for Apple to fill some gaps. I think this lower end devices, something that Apple is definitely going to have to bring the market to address opportunities. We are seeing more and more devices from, you know, chinese smartphone makers built on powerful chip technology from companies like Qualcomm that are increasingly powerful uh, you know, utilizing five G high end GPU s for gaming. And so Apple having something to be more competitive, keeping the global customers excited. And of course with everything going on in the world, I think that is gonna be the big focus of the show. Of course they're plugging some holes. We are hearing about a possible ipad Air that could be launched as well as some new M one based max. But I think the show is all about the new iphone and I think that 3 99 price target is going to be important and seeing maybe Apple even gets a little more aggressive than that. Yeah, you talk about everything going on with the world and that's kind of the elephant in the room, we mentioned just a bit earlier, Apple has cut ties with Russia. How do you expect this? And the conflicts that's ongoing in Ukraine with Russia, how do you expect it will impact sales for the company? Well as a percentage of sales, I believe Russia representative around $5 billion 1% of Apple sales. So it's not a monumental number. But I think the impact of a major market like that opens doors for competitors. We know that the chinese makers like Oppo and Jamie in some product categories have 40% of Russia's market. And I don't believe at this point china is following along on the U. S. Sanctions. So I'm sure these companies are weighing the opportunity to go into that market and of course to fill the gaps in that particular space. But I think Apple is making the right decision. I think, I don't think any of us question that. I think right now we need to put people in humanity and a head of sales and revenue. But of course that's part of why our market is is on stilts right now, especially tech and growth is. We're all worried what the long term trajectory is here and there's probably gonna be some short term revenue declines if companies aren't able to operate in a major market like Russia. Yeah, we also know apples relatively diversified in terms of raw materials for a lot of these electronics. But I wonder how much of an impact Russia's exports when it comes to raw commodities could also have an effect, but I want to switch gears here to some other news that we're following with. Samsung's recent hack confirming they were hacked by the same group responsible for in videos, ransomware attack earlier this month. How significant is this? And how does Apple tie into this news do you think? Yeah, I'm not sure it's a massive event for Apple, but it's surely a significant one for Samsung. This group lapses is clearly going after some of the world's most prolific tech companies. The NVIDIA hack was all about access to Gpu s for crypto mining. They were trying to essentially blackmail the company to say, hey, we wanna be able to use these Gpu s uh, in a way that is fit for them rather than how in videos trying to ration them so that gamers can get a handle, get their hands on them during this, this shortage. I mean what Samsung is saying is that some very sensitive information about some of its security technology was part of what was leaked. What is also being said though, is that not so much private data and information on customers or personal information about employees, which is something that did come out with the NVIDIA hack right now. It seems to be more like whack a mole with all of this. Uh, you know, cat and mouse that's going on with hacks of big, major tech corporations. I mean Apple dealt with it last year with Pegasus. Um So it's not like Samsung got hacked and Apple never does for every company right now. It seems more of when not if and and this time it was the when for Samsung also switching gears. The mobile world congress wrapped in Barcelona last week with telecom companies putting more focus on five G. Connectivity VR augmented reality, a lot of other arenas. Is there a concern you think that device makers are disconnected with what customers are using and actually want versus what they're developing right now? Well I think there's always those those two opposing forces and I was at mobile World Congress and it was a pretty impressive event given what was going on in the world I believe about 60,000 people were there and there was a lot of discussion about five G. Whether that was like you're saying device utilization for metaverse and X. R. And A. R. Or private five G. For you know Consistent communication in manufacturing and in rural communities. So there is a lot of use and we're expecting the market I believe the data somewhere around 60% category growth for the next five years or so. So 5G demand is going to grow. Um It's going to enable things like the next generation of connected cities and and and autonomous vehicles being connected to the cloud and of course our ability to use our devices for some of these futuristic use cases that you mentioned. Um but to some extent, you know, there is always that disconnect of what is needed right now, What's going on in our world right now And right now we're looking for simple, ongoing, pervasive communication with the people we care about around the world, but five G is going to enable that. So mobile world congress was was a step forward in the pandemic scenario that we've been under in terms of getting people out back together, seeing new technology launched in real time. But like I said with so much going on in the world and the focus on Russia and Ukraine, it is hard to really think about the next iteration of metaverse technologies, but all these events they do pass and we do need to keep innovating and developing for our future. Yeah, definitely. It's hard to believe whether or not this will actually be like the pivotal turning point when we adopt things like 5G technology. I think we still have a ways to go for a tech hardware to keep up with that but really appreciate your perspective today. That's Daniel Newman, principal analyst at future and research. Thanks so much