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Appleology and Renishaw

Tuesday, 2 May, 2017

In the grim days of the Cold War, the expression “Kremlin Watching” had relevance. It referred less to the specific building, the Moscow Kremlin, than to what it represented: the Soviet Government. This was an institution that people had good reason to watch with care as the smallest signal might offer an indication of what was happening and what might be expected next. Out of “Kremlin Watching” grew “Kremlinology”, which persists in the English language, being used figuratively to decrypt the actions of large, powerful, opaque institutions.

Apple is one such institution and Apple Watching has become a survival skill for those who wish to understand how modern fortunes are made and lost. Back at the beginning of last month, investors woke up to the news that shares in the UK chip designer Imagination Technologies had plunged more than 60 percent after Apple said it would end a deal to use its products. Apple uses the chips in its iPhones, iPads, and iPods under a licensing agreement and its royalty payments account for about half of Imagination’s revenues. The company’s shares promptly fell 165 pence to 103 pence, valuing it at about £250 million – down from about £765 million before the announcement was made. Why? Apple Watchers revealed that Apple is developing its own chip technology.

But for every downside there’s an upside and that’s very good news for investors in Renishaw Plc. Who? “We are a global company with core skills in measurement, motion control, healthcare, spectroscopy and manufacturing,” says the Gloucestershire-based firm. But there’s more to the story than that. In a recent note to clients, Stephen Swanton of the research firm Redburn pointed out that while Renishaw has never explicitly said Apple uses its technology, a Renishaw probe was shown in an iPhone promotional video as the device’s casing was being machined. Such are the fleeting signs that Appleologists must be alert to.

“The iPhone is now made to a level of precision not far away from that at which Rolls-Royce operates with aero engine fan-blade manufacturing,” said Swanton in a display of the finest Appleology that was subsequently quoted by Bloomberg.

The iPhone 8 is predicted to launch by September, 10 years after the original iPhone premiered. Expect lots and lots of Appleology between now and then.


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