Fitbit Is in Trouble, Apple Watch Momentum Is Building, Deep Dive into Microsoft Surface Sales
Today's Above Avalon stories:
- Fitbit Is in Trouble
- Apple Watch Momentum Is Building
- Deep Dive into Microsoft Surface Sales
We begin today's email with a closer look at Fitbit's holiday results. The company preannounced very bad numbers. We discuss the report and all of the various financial actions the company is taking to shore up its business. The email then turns to why I think Fitbit's results demonstrate that Apple Watch momentum is building in the wearables space. The discussion concludes with a deep dive into Microsoft Surface sales. We take a look at quarterly revenue trends, including 4Q16 holiday sales, and assess the validity of the Surface vs. Mac narrative being pushed by Microsoft.
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Apple vs. Qualcomm Primer
Today's email is focused on Apple's new war with Qualcomm. The email is broken into four parts with the beginning dedicated to the primary takeaways from the U.S. Federal Trade Commission's lawsuit against Qualcomm. We then turn to Apple's $1B lawsuit against Qualcomm. After going over Qualcomm's response to the allegations, we break apart Apple's motivation in its new battle against Qualcomm. What does Apple want to achieve by going after Qualcomm? What does Apple's war against Qualcomm imply about Apple's future product strategy? We answer these questions and more in this Apple vs. Qualcomm primer.
The four "chapters":
- U.S. Government Sues Qualcomm
- Apple Sues Qualcomm
- Qualcomm's Response
- Apple's Motivation to Sue Qualcomm
The Apple vs. Qualcomm primer is available for Above Avalon members. To continue reading, click here.
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Apple and Wall Street Expectations, Apple to Join Partnership on AI, Thursday Q&A
Today's Above Avalon stories:
- Apple and Wall Street Expectations
- Apple to Join Partnership on AI
- Thursday Q&A
We begin today's email with my thoughts and observations on the Wall Street expectations game heading into Apple's 1Q17 earnings. We discuss how much of an impact Apple earnings releases actually have on Wall Street expectations these days. The discussion also includes what I think is gaining an increasing amount of influence when it comes to Apple expectations on Wall Street. The email then turns to news of Apple nearing an announcement that it will join Partnership on AI, a consortium focused on creating best practices for artificial intelligence. What does this move say about Apple's artificial intelligence efforts? We end the email with the latest installment of member Q&A, and I answer the following questions from Above Avalon members:
- How much of a risk would Jony Ive's departure pose to Apple?
- Could Apple's supply "issues" be intentional?
- What is Apple's long term strategy in the education market?
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Apple 1Q17 Earnings Preview (iPhone, Guidance, Estimate Summary)
Today's Above Avalon stories:
- Apple 1Q17 Earnings Preview (Part 3 - iPhone)
- Apple 1Q17 Earnings Preview (Part 4 - Guidance)
- Apple 1Q17 Earnings Preview (Part 5 - Estimate Summary)
Today's email includes the second half of my Apple 1Q17 earnings preview. (The first half is available here.) We discuss my iPhone sales estimate. We go over some of the data that drove my thought process regarding 1Q17 iPhone sales. The email then turns to mangement's 2Q17 guidance. We discuss the most likely revenue guidance range, as well as how Wall Street may react to guidance. The email concludes with an overview of my Apple financial estimates for 1Q17. We discuss where the biggest difference between my estimates and consensus/guidance is found and the factors driving that difference.
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Apple 1Q17 Earnings Preview (Part 1 and 2), Sprint Buys 33 Percent of Tidal
Today's Above Avalon stories:
- Apple 1Q17 Earnings Preview (Part 1 - Setting the Scene)
- Apple 1Q17 Earnings Preview (Part 2 - Services, iPad, Mac, Apple Watch)
- Sprint Buys 33 Percent of Tidal
We begin today's email with the first half of my Apple 1Q17 earnings preview. We discuss my thoughts on expectations heading into next week's earnings report. The email then turns to a closer look at Services, iPad, Mac, and Apple Watch. We go over my unit sales and revenue estimates, as well as an overview of each product line heading into earnings. The email concludes with a discussion about Sprint buying a 33 percent stake in Tidal. We go over the deal's rationale for Sprint and Tidal, including what the deal means for the broader music streaming space.
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Apple's New Leadership Structure, Apple Culture Risks, Tim Cook's Report Card
Today's Above Avalon stories:
- Apple's New Leadership Structure
- Apple Culture Risks
- Tim Cook's Report Card
We begin today's email by continuing the discussion kicked off in my article, "Grading Tim Cook." After taking a deep dive into my theory regarding Apple's new leadership structure, we take a closer look at the key risks found with Apple's culture. Some of the changes put in place have elevated certain risks. The email then concludes with additional thoughts on my report card for Tim Cook as Apple CEO.
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Deep Dive into Netflix's 4Q16 Earnings, Netflix as an Acquisition Target, Digital Crown Coming to Android Wear
Today's Above Avalon stories:
- Deep Dive into Netflix's 4Q16 Earnings
- Netflix as an Acquisition Target
- Digital Crown Coming to Android Wear
We kick off today's email with my thoughts and observations on Netflix's 4Q16 earnings. We go over the key numbers and some of the main takeaways. The discussion then turns to the subject of Netflix being an acquisition target. After going over the companies that are even in a position to acquire Netflix, we discuss the prospects of anyone making a play for Netflix. We also circle back to the Netflix/Apple M&A discussion, and wheter there is rationale for Apple to acquire Netflix. The email concludes with a brief look at an interesting development in the smartwatch space as Google and LG embrace a digital crown for their new Android Wear flagship smartwatches. This may signal other changes coming to Android Wear and the broader smartwatch space.
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The Logic Behind Apple Owning Content, Mac Sales Mix Estimate, China Concerned About Foxconn's iPhone Plans
Today's Above Avalon stories:
- The Logic Behind Apple Owning Content
- Mac Sales Mix Estimate
- China Concerned About Foxconn's iPhone Plans
We begin today's email with my thoughts and observations on Apple owning content. Specifically, we discuss the logic behind Apple video content being made available on Android, and how such a move makes sense for Apple. We also discuss why it is important for Apple to own content and be more than just a distributor. The discussion then turns to the Mac and my estimate for the current Mac sales mix by model (Mac portables vs. iMac vs. Mac Pro/Mac Mini). The email concludes with a few observations related to news that China is concerned about Foxconn possibly moving some of its iPhone production to the U.S.
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Apple's Five-Year Roadmap, Motivation Behind Apple's Original Video Content Push, Andy Rubin's New Start-Up
Today's Above Avalon stories:
- Apple's Five-Year Roadmap
- Motivation Behind Apple's Original Video Content Push
- Andy Rubin's New Start-Up
We begin today's email by continuing the discussion kicked off in my article, "The Battle Lines in Tech are Being Redrawn." Specifically, we take a closer look at Apple's five-year product roadmap. We discuss the three product categories that will be able to garner an increasing amount of attention within Apple. The discussion then turns to the WSJ's report of Apple pushing into original video content. We go over Apple's motivation behind the move. The email ends with a closer look at Andy Rubin's new start-up. While the focus appears to be on selling a high-end smartphone, there is something else going on behind the scenes.
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Deep Dive into 4Q16 PC and Mac Shipments, iPhone Sales Momentum Continues in U.S., Thursday Q&A
Today's Above Avalon stories:
- Deep Dive into 4Q16 PC and Mac Shipments
- iPhone Sales Momentum Continues in U.S.
- Thursday Q&A
We begin today's email with my thoughts and observations on 4Q16 PC and Mac shipment data from Gartner and IDC. We discuss how to analyze Mac sales trends given the new MacBook Pros and Apple's future Mac strategy. The email then turns to smartphone sales share data from November. We go over the latest trends in the U.S., China, and Europe. This provides a clearer view of FY1Q17 iPhone sales. We also briefly discuss what the data suggests about the 2017 iPhone sales environment. We end the email with the latest installment of member Q&A, and I answer the following question from an Above Avalon member:
- Will U.S. mobile carriers continue to "subsidize" iPhones during launch months?
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Swift Creator Leaves Apple for Tesla, Apple and Employee Retention, Fitbit Acquires Luxury Smartwatch Maker
Today's Above Avalon stories:
- Swift Creator Leaves Apple for Tesla
- Apple and Employee Retention
- Fitbit Acquires Luxury Smartwatch Maker
We begin today's email with my thoughts and observations on Chris Lattner, Apple Director of Developer Tools, leaving Apple to become VP of Autopilot Software at Tesla. The discussion then turns to the broader question of whether Apple has a growing problem with employee retention. We go over a few examples that help separate myth from reality. The email concludes with news of Fitbit acquiring Vector, a luxury smartwatch start-up. We discuss my thoughts on where Fitbit is headed.
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Phil Schiller Talks iPhone at Ten Years, Apple Releases App Store Financials for 2016
Today's Above Avalon stories:
- Phil Schiller Talks iPhone at Ten Years
- Apple Releases App Store Financials for 2016
We begin today's email with a closer look at Apple SVP Phil Schiller's comments about the iPhone on the 10th anniversary of its unveiling. There were a number of takeaways from his comments, including the clearest signal yet regarding Apple's views on a stand-alone Siri speaker. The email then turns to the latest App Store financials. We take a deep dive into the new numbers. We also go over my thoughts and observations regarding App Store revenue growth and its relationship to Apple's overall Services revenue.
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CES 2017, iPhone at Ten, Apple Misses Performance Benchmarks for 2016
Today's Above Avalon daily update includes the following stories:
CES 2017
iPhone at Ten
Apple Misses Performance Benchmarks for 2016
We begin today's email with my thoughts and observations on CES 2017. While there were a few major themes from the trade show, there was also quite a bit of noise. The email then turns to the iPhone as Apple celebrates the tenth anniversary of unveiling the iPhone. We discuss how some people have developed a different recollection of that January 2007 product unveiling, as well as the iPhone's biggest revelation to date. The email ends with a closer look at Apple management missing its performance benchmarks in 2016. A number of questions are raised from this development, including how this could impact management's approach to Apple's product line in 2017.
Above Avalon membership is required to read this daily update. Members can read the update here.
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The cornerstone of Above Avalon membership is access to Neil’s exclusive daily updates about Apple. Daily updates are 2,000 words and sent via email Monday through Thursday. Updates revolve around the following topics:
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Receive Exclusive Daily Updates. The cornerstone of Above Avalon membership is access to Neil’s exclusive daily updates about Apple. Each email is 2,000 words and includes Neil’s analysis and perspective on the most important stories and news impacting Apple. Unlike other paid emails that may sporadically talk about Apple, every Above Avalon daily update is focused on Apple. New updates are sent Monday through Thursday. Approximately 200 daily updates published throughout the year. Sample daily updates can be viewed here, here, and here. Members have the option of receiving a consolidated weekly version of the daily updates. In addition, an RSS feed is available for members. The daily updates can also be consumed in audio via the Above Avalon Daily podcast (available to members as an add-on feature).
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China's "iPhone City," Apple's Most Important Partner in China, Thursday Q&A
Today's Above Avalon stories:
- China's "iPhone City"
- Apple's Most Important Partner in China
- Thursday Q&A
We begin today's email with my thoughts and observations on China's "iPhone City." The New York Times took a closer look at how China helped Foxconn establish the facility where nearly half of Apple's iPhones are assembled. We go over two big takeaways from the piece. We then discuss who I view is Apple's most important partner in China. There are issues with the Apple versus China narrative as it doesn't tell the entire story. We end the email with the latest installment of member Q&A, and I answer the following questions from Above Avalon members:
- What is the probability of Apple including AirPods in every iPhone box?
- Will Project Titan be impacted by the Trump administration's stance on U.S. manufacturing?
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iPhone Production Cut, Amazon to Sell Fire Televisions, Google Passes on Pixel Smartwatches
Today's Above Avalon stories:
- iPhone Production Cut
- Amazon to Sell Fire Televisions
- Google Passes on Pixel Smartwatches
We begin today's email with a closer look at a report from The Nikkei indicating Apple cut iPhone 7 production by 10 percent. We go over my thoughts and observations about the topic. The email then shifts to news of Amazon partnering with a few low-end TV manufacturers to sell Amazon Fire televisions. With Apple in mind, we discuss the various implications from this development. We conclude with a look at Google's strategy for its flagship Android Wear 2.0 smartwatches in 2017. Google is passing on selling its own smartwatches in favor of third-party partnerships. We go over my thoughts on this news in regards to Google's ability to position Android Wear as a formidable Apple Watch competitor in 2017.
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