Apple is Better Placed than Most to Ride Out a Tech Downturn

Despite the events of this week, in which Apple offered a revenue warning and saw its share price take a hit, the company is better placed than most other tech firms to ride out an economic storm. That’s the view of Tim Culpan, who ran the numbers for Bloomberg News. While we’ve heard warnings about the tech bubble bursting for years now, the piece certainly helps give some useful context to recent events.
When I first ran the numbers on a selection of nine companies — a mix of branded electronics, product assemblers and chipmakers — I concluded that the decade-long tech party looked headed for a nasty hangover. I’ve now added September-quarter figures to the same analysis, which includes inventory levels, turnover and cash conversion cycles. The situation is even uglier than four months ago. Apple’s warning this week that it won’t meet revenue guidance proves the initial concerns to be true, but it’s only a small part of the industry’s woes.