The supply chain guru has spoken.
Apple CEO Tim Cook on Thursday eased investors’ fear that supply chain problems rattling industries across the globe are starting to improve for the iPhone maker.
Cook told CNBC he expects supply constraints to improve compared to the December quarter. And boy did Apple investors like that. Apple shares were up as much as 5% in after-hours trading Thursday. (Shares were up more than 4% Friday morning.)
Despite the excitement around the rosy picture Cook painted, his comments on the supply chain improvements weren’t much different from some of his peers in the industry. From Intel to Tesla, executives have offered similar predictions about improvements to the supply chain throughout 2022. The difference: Shares of those companies fell after earnings, while Apple got a nice boost from investors.
Why?
Remember: Cook has built his entire reputation on being a supply chain genius. It’s a big part of the reason why he got the CEO job after Steve Jobs stepped down over a decade ago. (Cook is reportedly famous for negotiating parts down to fractions of a cent, for example.)
In fact, an analyst asked Cook on Thursday if he’s happy with the structure of Apple’s supply chain. Spoiler alert: Cook said he has Apple’s supply chain just the way he wants it, injecting even more optimism into the idea his company can navigate Covid’s disruptions until the supply chain woes get sorted out over the coming year.
Still, Cook didn’t say much we hadn’t heard yet.
Tesla CEO Elon Musk CEO said on his company’s earnings call Wednesday the company faces tough supply constraints, especially for computer chips the vehicles need. But Musk still projected solid growth for Tesla throughout the year, even if it won’t be able to launch new products.
Intel CEO Pat Gelsinger also had positive things to say about the supply chain recently. He said last week he expects “incremental improvements” to the supply chain throughout 2022, which is very similar to what Cook said Thursday.
But things may be harder on smaller technology companies that make hardware. Sonos, the smart speaker company, raised prices last year due to extra costs in the supply chain. Roku, the maker of streaming video devices for TVs, warned investors last year its supply chain costs were hurting its margins. Companies like Xerox and Western Digital also had dire warnings for their supply chains this month.
Those are signals that smaller companies could have a harder time managing supply chain headaches than giants like Apple. (Even with all those extra costs, Apple continues to deliver incredible margins.)
Although it’s still early in the earnings season, the narrative coming out of tech companies is clear so far: Titans like Apple are well-positioned to shield themselves from the worst of the supply chain problems, and comments from Cook and his peers bode well for the entire industry going into next year.
For now, though, the market has shown it has faith in Cook’s supply chain predictions above anyone else’s.
–CNBC’s Robert Hum contributed to this report.
