2020 Grey Swan: Apple Buys Disney
(2 min read)
Black swan events are the unknown unknowns that no one can even envisage, let alone predict. But their close cousin – grey swans – can enter our imaginations. These are low probability, high impact events that few expect. They aren’t even our base cases. But by imagining these risk scenarios, we can at least prepare for them should they erupt.
Apple’s earnings have been stagnating in recent years (Chart 1). They are reliant on iPhone sales and upgrades in a maturing smartphone market, and a slowdown in China hasn’t helped. It’s no wonder Apple has focused on expanding its Services and Wearables, Home and Accessories revenues. The trouble is that this will take time and comes with risks.
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