Late-Week Updates, No 36

Iran, Apple, New Year

Of course some apologies for missing the usual Wednesday due date for the ‘Mid-Week’ report, but it was a busy week with lots going on. It included doing two workshops on early stage tech investing, one in person in Vancouver and a remote one for an audience in Jamaica. It is an evolving science and the recent negative turn in market sentiment prompts even more questions from both investors and entrepreneurs. I am glad that I can continue to offer some thoughts, ideas as well as practical advice in a time when confusion appears to be taking over. In any case, lots is happening this week and this caught my eye.

Iran

This week it is exactly a year ago that Mahsa Amini died in police custody after being arrested for wearing her headscarf improperly. While in custody she was assaulted and tortured and on the same day transferred to a hospital where she succumbed to her injuries a few days later on September 16. In plain English: an innocent woman was brutally murdered by police forces.

Her death sparked one of the largest anti-regime protests in Iran which were arguably even more intense and widespread than the protest movements that erupted in 2009, 2017 and 2019. Although strong support came from across the world - in particular from the Iranian diaspora - hopes of a real revolution and democratic reform have sadly faded. While the events sparked a rift in Iran’s leadership between hardliners and more reform minded conservatives, it was the core group around Ayatollah Ali Khamenei that could claim a victory, at least for the time being. Iran’s leadership was rattled and tested, but as of today is unmoved and nothing has really changed, in particular for Iran’s women.

A neighbour who is from Iran originally pointed me to this long episode discussing the uprising one year later. One of the comments in this broadcast that struck me is that the people of Iran have effectively been left on their own in trying to topple the bloody regime that has governed them since 1979. The world at large and the West in particular have not been able to give effective support and bring about change. Moves like this are not exactly helpful. The best we can do is to keep the movement alive, and by remembering Mahsa the plight of the Iranian people at least is brought back to the front pages this week. It will be a long struggle, so whatever you can do to keep this front and center, please do so.

Readers in Vancouver: there will be a protest at the Art Gallery downtown this coming Saturday from 2 to 4pm.

De-Globalization
It is interesting that the issue of a changing global order which we discussed here last week is actually making itself felt. How? Do you own Apple stock? Have you noticed the downtrend from the all-time highs the stock touched a little while ago? The core reason given is that China has instructed all its government employees to stop using iPhones and barring them from taking them into the office at all. Although not something that will reverse Apple’s long term value, note that these moves may spread across other companies and organizations in China and could over time put a real dent in Apple revenues of which about 20% is generated from China.

As to the why of this move we can guess, security reasons is the one that is cited widely, but the fact that Huawei has just launched a device that directly competes with the brand new iPhone 15 is probably closer to the truth. Pushing Apple out of the China market may greatly benefit the domestic manufacturer that itself was pushed out of the US market not too long ago.

Could this blow over or is a trade war imminent? Can this be mitigated in the long run by the Cupertino-based tech giant? The fact is that Apple is hugely exposed to the whims of Beijing with 95% of iPhones, AirPods, Macs and iPads still made in China. If the trade and the political relationships between China and the US continue to deteriorate it may have a real impact on Apple’s fortunes. So the company could either onshore production in North America (which makes your iPhone even more expensive, there’s some inflation being imported right there) or it could seek alternative markets. It seems the best option is to diversify away from China and moving production to India has started with the first Indian made iPhones ready for delivery. So this is not de-globalization just yet, but it is more like re-globalization. Shifting politics, shifting markets, shifting production and with it shifting prices. Expect more of it, and not just for Apple products, in the near future.

A New Year

For all those that celebrate this weekend: Shana Tova. And I cannot resist to share the video that Israeli singer Sarit Hadad dropped on YouTube this week to mark the new year, a fresh live version of ‘Keshalev Boche’ one of her more emotional songs that has deep national and biblical underpinnings. The song was released after the brutal lynching of two Israeli soldiers in 2000 and it basically describes the extreme grief one can feel such that one can only turn to God.

The same applies to Mahsa Amini’s death and that of the many innocent Iranians and Israelis that have died in the most unthinkable ways in their quest to live a normal and free life. No earthly power can give you the consolation when your heart is ripped to pieces, that is what Sarit sings to us. Or does she? Watch the video, even if it is not your thing, take in the first two minutes. Even the artist is completely taken aback by the audience’s outburst.