It’s widely acknowledged that China has been stealing American technology, corporate intelligence, and design for years.
The latest example of this dynamic is Xpeng(NYSE:XPEV) China’s equivalent to Tesla, Inc. (NASDAQ:TSLA), using the technology called LiDar sensors for driverless navigation. Elon Musk is not a fan…
He claims it’s expensive technology and not suitable for his cars.
“They have an old version of our software & don’t have our NN inference computer.” Said Musk.
Musk went on to say not only did they steal tech from him but also from Apple…
Stemming from a corporate espionage case from 2018, where an ex-Apple engineer was arrested and charged for stealing proprietary code information regarding driverless technology.
That engineer quit Apple and took up employment at XMotors the Chinese electric automobile manufacturer.
#1 Chinese Target: Apple Inc.
Apple Inc. (NASDAQ:AAPL) finds itself in a tough predicament in regard to its association with China though, where its IPhone is assembled and produces the most sales outside of the United States. Corporate espionage is always being watched in Apple’s rear view mirror.
The launch of the 5G enabled IPone 12 though, is coming at an opportune time as millions of IPhone users find themselves in the upgrade window. Day one pre-orders were double that of the IPone 11, in the range of 1.7 to 2 million units.
Predictions have been made for 70 to 80 million units sold by the end of this year and and a total of 230 and 250 million units through next year.
#2. Chinese Target: Micron Technology, Inc.
Semiconductor company Micron Technology, Inc. (NASDAQ:MU) was the victim of trade secrets theft by a government-owned Chinese company, Fujian Jinhua Integrated Circuit Co., and co-conspirators, said the Justice Department in November of 2018.
They were targeting technology called dynamic random access memory, or DRAM, that’s used in computer electronics.
The DRAM technology will prove valuable to Micron as low to midrange 5G devices require more memory. These 5G devices will sport 8GB of DRAM versus 6GB typically found in 4G phone technology.
Micron and additional important technology it holds is well positioned for the explosive 5G market. As its mobile revenue jumped 104% from 2016 to 2019, while the industry’s revenue increased by only 28%, indicating a higher market share.
#3 Chinese Target : T-Mobile
Chinese tech giant Huawei stole trade secrets, according to Federal prosecutors, from U.S. cellphone company T-Mobile US, Inc. (NASDAQ:TMUS) and offered bonuses to employees who managed to swipe technology from other companies.
The Chinese company was obsessed with a T-Mobile robot named Tappy that could detect problems in cellphones.
Huawei actually had access to T-Mobiles labs at the time to test phones, enabling an engineer to actually swipe parts from the robot. They were desperately seeking the technology so they could test their own phones.
Since T-Mobile merged with Sprint back in April, it continues to surprise with market share gains, with best-in-industry net additions, revenue, and profitability.
T-Mobile disrupted the industry with low-cost plans forcing its competition to lower prises or increase promotions.
Its EBITDA grew 2% year over year, despite the pandemic but aided by the Sprint merger. Relative to the prior quarter, this amounted to about 8% annual growth compared to Verizon’s minimal profit gains and AT&T’s loss.
And T-Mobile hiked its EBITDA guidance for the year from around $12.4 billion to about $13.6 billion. It also increased free cash flow guidance from a range of $300 million to $500 million to a range of $700 million to $900 million.
This company doesn’t live or die on cell phone service alone, it’s a leader in 5G and broadband internet service. It has doubled the number of broadband and internet devices from 1.2 million to 2.2 million, quarter over quarter.
T-Mobile is taking aim to bring 5G broadband to 50% of America in six years.
Bottom Line: Oscar Wilde said “Imitation is the sincerest form of flattery that mediocrity can pay to greatness.”
We think that’s well said, and speaks well of these 3 leading stocks.