Apple 1Q19 Earnings Review (Details)
Today's Above Avalon daily update includes the second half of my Apple 1Q19 earnings review. We discuss my full notes and focus on the granular takeaways.
The 2,900-word email covers 29 different topics.
(The first half of my earnings review focused on the major themes is available here.)
My full Apple 1Q19 earnings review is available for Above Avalon members. To continue reading, click here.
Become an Above Avalon member to read my full Apple 1Q19 earnings review and receive future daily updates. You can use the payment forms/links below to sign up ($20/month or $200/year). For more information on memberships, click here.
Apple 1Q19 Earnings Review (Major Themes)
Today's Above Avalon daily update includes the first half of my Apple 1Q19 earnings review. We discuss the major themes from Apple's earnings report and conference call.
The 3,000-word email includes the following sections:
Overall Takeaway
1Q19: By the Numbers
Apple Disclosure Bonanza
What’s Going on with iPhone?
Ecosystem, Ecosystem, Ecosystem
A Halt to Share Buyback
(The second half of my earnings review focused on my full notes and the granular takeaways is available here.)
My full Apple 1Q19 earnings review is available for Above Avalon members. To continue reading, click here.
Become an Above Avalon member to read my full Apple 1Q19 earnings review and receive future daily updates. You can use the payment forms/links below to sign up ($20/month or $200/year). For more information on memberships, click here.
Apple Discloses Key App Store Financial Data Point, Hulu Revises Pricing, Aetna and Apple Announce Watch Partnership
Today's Above Avalon daily update includes the following stories:
Apple Discloses Key App Store Financial Data Point
Hulu Revises Pricing
Aetna and Apple Announce Watch Partnership
We kick off today’s email with a closer look at a key financial metric Apple just disclosed regarding the App Store. With this data point in hand, we can reach a number of valuable conclusions as to the App Store’s financial performance in 2018. The discussion then turns to Hulu revising subscription pricing less than two weeks after Netflix’s price increases. We conclude by going over my thoughts on Aetna and Apple announcing a new Apple Watch partnership. There are a number of interesting takeaways from the news when it comes to how Apple is thinking about its role in the health space.
Above Avalon membership is required to read this daily update. Members can read the update here.
Above Avalon Membership
Above Avalon members receive all of my analysis and perspective on Apple. The cornerstone of Above Avalon membership is access to my exclusive daily updates about Apple.
Daily updates are 2,000-word emails that revolve around the following topics:
Apple business and strategy analysis.
Apple financial estimates.
My perspective and observations on current news and Apple competitors.
Full coverage of Apple earnings, product events, and keynotes.
If it is of interest to Apple, it is something I pay attention to.
Member Privileges and Benefits
Exclusive Analysis. Receive exclusive daily updates containing my analysis and perspective, 100% related to Apple. Approximately 200 daily updates are published throughout the year. Members also receive my exclusive reports, in-depth examinations into Apple's business strategy. Each report covers one topic, and a new report is published each quarter.
Email Priority. Receive timely responses to email questions and inquiries.
Apple Earnings Model. Access my working Apple earnings model. The model is fully functional and adjustable with the ability to alter earnings drivers.
Archive Access. Read daily updates and reports previously sent to members. The archive can be viewed here.
Forum Access. Join other Above Avalon members in a forum containing in-depth discussion and Apple debate. The forum can be accessed here. Members live in 55 countries and hold a diverse range of backgrounds and occupations. I (Neil Cybart) personally moderate and oversee the forum.
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Member meet-ups. Meet me and other Above Avalon members to discuss Apple and other related news items. Prior meet-ups have taken place in San Francisco, Cupertino, and San Jose. Future meet-ups are possible in other cities.
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Apple 1Q19 Earnings Preview, New Apple FY2019 and FY2020 Estimates, 2Q19 Apple Guidance Expectations
Today's Above Avalon daily update includes the following topics:
Apple 1Q19 Earnings Preview
New Apple FY2019 and FY2020 Estimates
2Q19 Apple Guidance Expectations
In today’s update, we preview Apple’s 1Q19 earnings. We discuss my thoughts on the overall environment heading into tomorrow’s earnings. The discussion then turns to my revised Apple financial estimates for FY2019 and FY2020. Above Avalon members have access to my working Apple earnings model. The discussion then turns to my 2Q19 guidance expectations for Apple and my final thoughts heading into earnings.
This daily update is available for Above Avalon members. To continue reading, click here.
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1Q19 Installed and User Base Estimates for iPad, Calculating the Mix of Apple Devices in Use, First Look at CY4Q18 China Smartphone Shipments
Today's Above Avalon daily update includes the following topics:
1Q19 Installed and User Base Estimates for iPad
Calculating the Mix of Apple Devices in Use
First Look at CY4Q18 China Smartphone Shipments
We begin today’s email with my revised estimates for the size of the iPad installed base and user base as of the end of December 2018. The discussion then turns to my estimates regarding the number of Apple devices in use. The device total is broken out by product category. We conclude with a look at the first industry report regarding China smartphone shipments in CY4Q18 (Apple’s 1Q19). A few things jumped out at me after looking at the data.
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Apple’s Content Distribution Arm, 1Q19 iPhone Installed Base and User Base Estimates, Apple Restructures Project Titan
Today's Above Avalon daily update includes the following topics:
Apple’s Content Distribution Arm
1Q19 iPhone Installed Base and User Base Estimates
Apple Restructures Project Titan
We jump into today’s update with additional comments on the latest Above Avalon article, “Apple’s Content Distribution Strategy.” In particular, we take a closer look at how Apple’s ecosystem plays such a large role in Apple’s strategy for distributing content. The discussion then turns to my revised estimates for the size of the iPhone installed base and user base as of the end of December 2018. The email concludes with my thoughts on Apple dismissing more than 200 Project Titan employees.
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Netflix Earnings, Elon Musk’s Strange Letter to Employees, A Project Titan Observation
Today's Above Avalon daily update includes the following topics:
Netflix Earnings
Elon Musk’s Strange Letter to Employees
A Project Titan Observation
We kick off today’s email with my thoughts on Netflix’s 4Q18 earnings. The discussion then turns to Tesla and Elon Musk’s odd comments regarding Tesla demand. We then go over how I think Tesla is proving to be an interesting case study for Apple’s Project Titan.
This daily update is available for Above Avalon members. To continue reading, click here.
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Tim Cook Calls for New Privacy Laws, The Intrigue Found with Apple Watch Insurer Subsidies, Thursday Q&A
Today's Above Avalon daily update includes the following topics:
Tim Cook Calls for New Privacy Laws
The Intrigue Found with Apple Watch Insurer Subsidies
Thursday Q&A
We begin today’s update with my thoughts on Tim Cook’s column in Time magazine calling for new privacy laws. The discussion includes a look at some of the criticism Cook is facing on the issue from tech journalists and pundits. The email then turns to Apple reportedly talking with private Medicare plans to subsidize Apple Watch. We go over the subtle point found in the news regarding the wrist’s importance to Apple’s health initiatives. We conclude with the latest installment of Thursday Q&A. I answer the following questions from Above Avalon members:
Does Apple’s 1Q19 guidance revision warrant a leadership change?
Do you think the recent financial news and drop in stock price will have a major negative impact with respect to employee retention?
Do we have any clues about how changes in channel inventory might be exacerbating the iPhone revenue decline?
Do you think Apple would ever more to a 24-month iPhone release cycle?
How do you plan on estimating unit sales in your reporting now that Apple has changed its disclosures?
Can you comment on your thought process on the effects of the Chinese economy to Apple and how you might factor that into your estimates?
This daily update is available for Above Avalon members. To continue reading, click here.
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Netflix Increases Subscription Pricing, Apple’s Game Plan for Video, Wall Street’s Ongoing Fascination with Apple M&A
Today's Above Avalon daily update includes the following topics:
Netflix Increases Subscription Pricing
Apple’s Game Plan for Video
Wall Street’s Ongoing Fascination with Apple M&A
We begin today’s email with my thoughts on Netflix raising subscription pricing. The discussion then turns to whether or not Netflix’s pricing move opens the door for Apple and Disney with lower-priced video streaming offerings. We also revisit Apple’s long-term game plan for video. The email concludes with why Wall Street is so fascinated with Apple M&A, especially when Apple revenue growth slows. We also go over why so much of the Apple M&A chatter on Wall Street is off the mark.
This daily update is available for Above Avalon members. To continue reading, click here.
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iPhone Battery Replacement Data Leaks, NBCUniversal to Enter Streaming Wars, United Airlines Discloses Apple Travel Patterns
Today's Above Avalon daily update includes the following topics:
iPhone Battery Replacement Data Leaks
NBCUniversal to Enter Streaming Wars
United Airlines Discloses Apple Travel Patterns
We begin today’s email with a closer examination of how Apple’s iPhone battery replacement program may have impacted iPhone sales in 2018. The discussion then turns to video streaming and NBCUniversal’s announcement of a new direct-to-consumer video service. The email concludes with one of the weirder Apple leaks in recent memory. Information regarding Apple employee travel patterns on United Airlines was disclosed. We look at the leak to arrive at a few takeaways regarding Apple’s global operations.
Above Avalon membership is required to read this daily update. Members can read the update here.
Above Avalon Membership
Above Avalon members receive the full Above Avalon experience throughout the week.
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:
Apple business and strategy analysis.
Neil’s perspective and observations on current news and Apple competitors.
Neil’s Apple financial estimates.
Full coverage of Apple earnings, product events, and keynotes.
If it is of interest to Apple, it is something I pay attention to.
Member Privileges and Benefits
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).
Access Reports and Neil’s Earnings Model. Members have access to Above Avalon reports, which are in-depth examinations of Apple's business and financial strategy. Each report is 4,000 to 5,000 words and covers one Apple topic. Members also have access to Neil’s working Apple earnings model (an Excel file that also works in Numbers). The model is fully functional and adjustable with the ability to alter earnings drivers. Reports and Neil’s earnings model are available to members at no additional cost.
Email Priority. Receive priority when it comes to having email questions and inquiries answered. Neil personally answers all inquiries, including any customer service matters related to your membership.
Archive Access. Read more than 1,100 daily updates and five reports that have been previously sent to members. The Above Avalon member archive is unmatched in the marketplace in terms of the sheer amount of Apple analysis found in one location. The daily updates archive can be viewed here while the reports archive is available here.
Member Forum Access. Join other Above Avalon members in an active forum containing in-depth discussion and debate. While most private member forums have limited participation, the Above Avalon member forum has become known as one of the more vibrant private communities dedicated to Apple. Members live in 55 countries and hold a diverse range of backgrounds and occupations. There is a specific forum channel for members to share AAPL stock and options trading strategies. Neil moderates and participates in the forum. The forum is run through Slack and can be accessed here.
Receive Above Avalon Weekly Articles via Email. Receive the weekly Above Avalon articles via email. This feature is only available to members.
Member Meet-ups. Meet Neil and other Above Avalon members to discuss Apple and other related news items. Prior meet-ups have taken place in San Francisco, Cupertino, and San Jose. Future meet-ups are possible in other cities.
Above Avalon Support. Play an active role in supporting Above Avalon as an independent source of Apple analysis. Above Avalon is fully sustained by its members.
Four Takeaways from the WSJ’s Report on New iPhones, Thoughts on CES 2019, Using Design to Think Differently and Marginalize Industries
Today's Above Avalon daily update includes the following topics:
Four Takeaways from the WSJ’s Report on New iPhones
Thoughts on CES 2019
Using Design to Think Differently and Marginalize Industries
We begin today’s email with four takeaways from the recent WSJ report about Apple’s new iPhones to be unveiled later this year. The discussion then turns to CES, the largest tech trade show in the world. After briefly discussing Steven Sinofsky’s CES 2019 recap, we go over my main conclusion about this year’s CES. This brings us to a broader discussion involving wearables, smart homes, design, and how Apple uses design to marginalize industries.
This daily update is available for Above Avalon members. To continue reading, click here.
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Netflix Moves Away from iTunes Billing for New Subscribers, Apple Releases Reclassified Sales Data, Thoughts on Decelerating Apple Services Growth
Today's Above Avalon daily update includes the following topics:
Netflix Moves Away from iTunes Billing for New Subscribers
Apple Releases Reclassified Sales Data
Thoughts on Decelerating Apple Services Growth
We begin today’s email with my thoughts on Netflix no longer allowing new subscribers to sign up using iTunes billing. The discussion then turns to Apple’s reclassified sales data, including revised quarterly totals for Services revenue. The new numbers shine a different light on the $10.8B 1Q19 Services revenue figure that Tim Cook disclosed last week. We conclude with a look at how Apple Services revenue growth is decelerating and the two likely factors behind the slowdown.
This daily update is available for Above Avalon members. To continue reading, click here.
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Deep Dive into Tim Cook’s Interview with CNBC’s Jim Cramer, Estimating Apple Watch Sales, Estimating AirPods Sales
Today's Above Avalon daily update includes the following topics:
Deep Dive into Tim Cook’s Interview with CNBC’s Jim Cramer
Estimating Apple Watch Sales
Estimating AirPods Sales
We begin today’s email with my thoughts on Tim Cook’s interview with CNBC’s Jim Cramer. The discussion includes my full notes from the interview. We then turn to Apple Watch and AirPods sales. Based on new comments from Cook, we have the clearest evidence yet as to how Watch and AirPods are selling. We go over my unit sales and revenue estimates for each product. In addition, we compare Apple’s wearables segment (unit sales, revenue, and ASP) to the iPad business.
This daily update is available for Above Avalon members. To continue reading, click here.
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Apple Brings iTunes to Samsung Smart TVs, Revisiting Apple’s Hardware Emphasis, Apple Expands AirPlay 2 Support to Smart TVs
Today's Above Avalon daily update includes the following topics:
Apple Brings iTunes to Samsung Smart TVs
Revisiting Apple’s Hardware Emphasis
Apple Expands AirPlay 2 Support to Smart TVs
We begin today’s email with my thoughts on Apple bringing iTunes to Samsung Smart TVs. The discussion then shifts to answering a few questions including what the news means for Apple TV’s future and the prospects of an Apple television set. We then take a deep dive into why I disagree with the consensus view that this Samsung partnership signals that Apple is emphasizing services over hardware. The email concludes with a number of observations about Apple expanding AirPlay 2 support to a long list of smart TVs and what Apple is trying to accomplish with Apple TV and HomePod.
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Additional Thoughts on Apple Cutting 1Q19 Guidance
Today's Above Avalon daily update includes additional thoughts on Apple’s negative revision to 1Q19 revenue guidance. The following sections are covered in today’s 3,000-word update:
Revisiting Apple’s Growth Narrative
Putting iPhone Sales Decline in Context
Playing Devil’s Advocate
Other Notes
iPhone Sales Downside Risk
Conclusion
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