Long Memory, Short [Android] Smartphone
This feels obvious?
Irrational Analysis is heavily invested in the semiconductor industry.
Positions will change over time and are regularly updated.
Opinions are authors own and do not represent past, present, and/or future employers.
All content published on this newsletter is based on public information and independent research conducted since 2011.
This newsletter is not financial advice and readers should always do their own research before investing in any security.
Feel free to contact me via email at: irrational_analysis@proton.me
When I started this newsletter, I expected to meet mostly other engineers. In reality, probably 80% of people I have met through this hobby are finance people, primarily traditional market-neutral long/short public equities.
Which is nice. Great learning opportunity for me. Made a lot of friends along the way. People I would have never met otherwise.
One of the things I learned is how much money is paired. Shorting $X worth of one stock and using that cash to buy $X of something else. Forcing the fund to be market-neutral, 0% net exposure. Can’t buy anything in isolation, must short something else in same size.
(I am insane and typically run psychotic trading account at 150-200% long.)
This is 176% gross. The professionals run at 0% gross LOL.
As a learning exercise, I have spent the last few months thinking about market-neutral long/short pairs and… well there seems to be a glorious opportunity that has not gotten enough attention.
There is endless noise on memory right now. Micron HBM4 base die is shit. Samsung HBM4 is great performance but yield and reliability issues. SK Hynix has some problems but maybe it is fixed but maybe not.
Is memory still cyclical? Should we value these stocks on forward P/E or price/book? Will there be an over-supply? When will the over-supply be? Will memory stocks re-rate on multiple?
What if none of this matters?
I have consistently been anti-memory out of fear of the cyclicality. The first thing I say when someone asks me about memory is “go read old Micron earnings call transcripts from 2022/2023 when Sanjay was publicly begging Samsung for mercy.”
The DRAM triopoly has a history of irrational behavior, leading to breathtaking negative gross margins when the downcycle hits.
Let’s set that aside. Assume AI inference pushes out the memory downcycle for at least the next 3 years. We know that the cleanroom situation is absolutely fucked for next 18-24 months. Assume it is safe to be long DRAM (SK/Samsung/Micron) for the next 12-18 months.
What to short?
Well…
Contents:
Modern smartphones are very good.
Apple is out for blood.
How smartphones degrade.
Repair is easier than you think.
[1] Modern smartphones are very good.
Do you recognize this man?
This is Marques Brownlee. He runs a popular YouTube channel that primarily focuses on smartphone reviews.
https://www.youtube.com/user/marquesbrownlee
He even has an annual smartphone awards video.
I have followed his channel for many years and… a recent pattern has emerged.
But before that, let me tell you about the smartphone I personally use, the Samsung Galaxy S23 Ultra.
It has a built-in stylus, the S-pen. Love this thing. Literally will not consider any smartphone that does not have an integrated stylus. Use the S-pen constantly to highlight stuff, edit screenshots, scribble things onto screenshots, adjust crayon lines on stock charts. A phone without S-pen or equivalent is unusable to me.
Let’s take a tour of MKBHD review videos for the Galaxy S25/26 Ultra.
Most of the video is Marques complaining that not much has changed versus the S24 ultra, other than a few minor downgrades and nitpicks.
New privacy screen is the only interesting thing.
It’s funny how over the last few years, MKBHD reviews of high-end phones have become increasingly nitpicky. The only way to compare the new phone with last year’s phone is to find minute differences and highlight them.
Still very satisfied with my S23 Ultra. Samsung made the phone too good. No reason to upgrade.
[2] Apple is out for blood.
Apple sees the current crisis and is thinking, yes we will take market share and decapitate the competition.
It’s working.
What little DRAM is available for smartphone market, Apple buys it at very high prices.
It’s almost as if Apple does not care and wants to set the market price of LPDDR higher just to sabotage the competition.
[3] How smartphones degrade.
Lets set aside the obvious “phone dropped, screen cracked” failure-mode.
How does your phone degrade?
It’s actually quite simple. All problems stem from the battery.
Lithium-ion batteries permanently lose capacity due to three primary factors.
Number of charge cycles.
Temperature of the battery.
To what level and at what rate the battery is charged and discharged.
Every time a lithium-ion battery is cycled, some small percentage of the ions get stuck, resulting in a permanent loss of charge capacity.
Temperature makes this process significantly worse. Fast-charging always generates more heat than regular/slow charging. Thus, fast charging is bad for battery health.
Additionally, more ions tend to be trapped when a lithium-ion battery is charged close to 100% or drained close to 0%.
In general, charging a Li-Ion battery past 85% capacity or draining it below 15% capacity is harmful to longevity.
For long-term storage, you want the battery at 50%.
Batteries don’t just degrade in terms of capacity. The voltage a Li-Ion battery can deliver degrades over time too.
Eventually, this becomes a problem because chips need a certain minimum voltage to hit the rated clock speed.
Apple got into a bad news cycle because iOS updates were reducing processor speed to account for battery degradation.
https://en.wikipedia.org/wiki/Batterygate
https://support.apple.com/en-us/101575
In summary, smartphones die because of Li-Ion battery degradation.
I can tell you the battery life of my poor 3-year old S23 Ultra is kinda trash after all the fast-charging and cycles I put the thing through.
[4] Repair is easier than you think.
Suppose a crippling DRAM shortage makes smartphones much more expensive. (we dont need to suppose this is fucking happening right now)
The best way to extend the life of your phone is replace the battery.
It’s actually quite simple.
Use a heat-gun or hair-dryer to warm the back of the phone.
Take a razor-blade or box-cutter or other think and sharp knife to gently remove the back panel by cutting glue.
Use pull-tabs or (worst case) some isopropanol to remove glue holding battery in place.
Swap battery with simple clicky connector.
Glue phone back together.
The raw materials for a battery replacement cost around $20. Tools another $40, or… you can just go to any repair shop or mall stall or market stall and have this repair done for like $30 total.
https://www.ifixit.com/Guide/Galaxy+S23+Ultra+Battery+Replacement/173949
Swap the battery and more likely than not, your phone will be good as new.
The most difficult part is getting the back panel off. Risk of cracking the glass. Thankfully, my phone has been abused so much the glue already gave way and the back panel is slightly ajar.
Is this unfinished? No mention of Qualcomm loll
I guess the takeaway is in the title and the post just expounds on it ?😄
Actual conclusion sections are for losers 😂