Apple's M&A Appetite, Two Problems Facing Google Pixel, Spotify Earnings
Today's Above Avalon daily update includes the following stories:
Apple's M&A Appetite
Two Problems Facing Google Pixel
Spotify Earnings
We begin today’s update with my thoughts on whether or not Apple’s appetite for large-scale M&A has changed in recent months. The discussion then turns to Alphabet earnings and management saying Google Pixel smartphones sales are down. We go over the two primary problems Google is facing when it comes to the Pixel smartphone. The email concludes with Spotify earnings and a look at the latest subscriber trends and management’s strategy for improved user monetization.
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Three Industrial Designers Leave Apple, Jony Ive's Legacy, Apple Discussed M&A with Intel
Today's Above Avalon daily update includes the following stories:
Three Industrial Designers Leave Apple
Jony Ive's Legacy
Apple Discussed M&A with Intel
We begin today’s update with news of three additional industrial designers leaving Apple. I share my perspective and thoughts on the departures. The discussion includes how managing the turnover that is unfolding within Apple Industrial Design will play a role in Jony Ive’s legacy. The email concludes with Apple and Intel. The WSJ is reporting that Apple previously held discussions with Intel about acquiring its smartphone modem business. We go over my thoughts on the story and why a deal regarding Apple acquiring Intel’s smartphone modem IP would now be considered a surprise.
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Apple 2Q19 Earnings Preview (Part 3 - 3Q19 Guidance, Updated Earnings Model, Final Thoughts), Apple's Incentive to Boost Buyback Authorization, Microsoft Surface Sales
Today's Above Avalon daily update includes the following topics:
Apple 2Q19 Earnings Preview (Part 3 - 3Q19 Guidance, Updated Earnings Model, Final Thoughts)
Apple's Incentive to Boost Buyback Authorization
Microsoft Surface Sales
Today's email concludes my Apple 2Q19 earnings preview. We look at my 3Q19 revenue guidance projection and updated Apple earnings model. (Access to my Apple earnings model is a benefit associated with Above Avalon membership at no additional cost.) We then go over my final thoughts heading into earnings next week.
The first two parts of my 2Q19 earnings preview are available: here (setting the stage) and here (iPhone, Services, Mac, Wearables / Home / Accessories, and iPad financial estimates).
The email then goes over additional comments on the latest Above Avalon article, “Apple’s $400 Billion Buyback Program.” In particular, we focus on why Apple’s board still has an incentive to continue increasing buyback authorization by significant amounts. We conclude with my thoughts on the latest Microsoft Surface sales.
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Apple 2Q19 Earnings Preview (Part 2 - Product Sales Expectations)
Today's Above Avalon daily update includes the following topics:
Apple 2Q19 Earnings Preview (Part 2 - Product Sales Expectations)
Today's email continues my Apple 2Q19 earnings preview. We discuss my iPhone, Services, Mac, Wearables / Home / Accessories, and iPad financial estimates. We also go over the methodology behind my estimates.
(The first part of the preview is available here - setting the stage. The final section of the preview is available here - 3Q19 guidance, updated earnings model, final thoughts.)
My full Apple 2Q19 earnings preview is available for Above Avalon members. To continue reading, click here.
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Apple FY2Q19 Earnings Preview (Part 1 - Setting the Stage), 1Q19 iPhone Sales Share, Netflix 1Q19 Earnings
Today's Above Avalon daily update includes the following topics:
Apple FY2Q19 Earnings Preview (Part 1 - Setting the Stage)
1Q19 iPhone Sales Share
Netflix 1Q19 Earnings
Today's email includes the first part of my Apple 2Q19 earnings preview. We discuss my thoughts on the overall environment heading into next week's earnings.
The email then turns to the latest Kantar data regarding iPhone sales share around the world between January and March. We go over the numbers and corresponding takeaways. Our discussion concludes with my thoughts on Netflix’s 1Q19 earnings. After going over some of the financials, we cover the items from management’s letter to shareholders and earnings Q&A that jumped out at me.
(The second part of my 2Q19 earnings preview is available here - product sales expectations. The final part is available here - 3Q19 guidance, updated earnings model. and final thoughts.)
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Apple Settles with Qualcomm, Intel to Exit 5G Smartphone Modems, Apple's Game of Modem Chess
Today's Above Avalon daily update is dedicated to discussing Apple settling with Qualcomm and the two companies agreeing to dismiss all litigation between each other.
The email includes the following topics:
Apple Settles with Qualcomm
Intel to Exit 5G Smartphone Modems
Apple's Game of Modem Chess
We go over my full thoughts and perspective on the major developments.
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.
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.
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The Flaw in the Apple Services Narrative, A Different Way to Look at Content Streaming, Jeff Bezos' Annual Shareholder Letter
Today's Above Avalon daily update includes the following topics:
The Flaw in the Apple Services Narrative
A Different Way to Look at Content Streaming
Jeff Bezos' Annual Shareholder Letter
We begin today’s update by going over the glaring flaw found in the narrative that Apple is becoming a services company. The email then goes over some paid subscriber data that helps provide a different way to look at content streaming. We conclude with my thoughts on Jeff Bezos’ latest shareholder letter and the idea of Amazon embracing failure. There is a fundamental difference in how Amazon and Apple approach failure.
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Disney Unveils Disney+, Thoughts on Apple TV+ Pricing Options, Apple Spending $500M on Apple Arcade
Today's Above Avalon daily update includes the following topics:
Disney Unveils Disney+
Thoughts on Apple TV+ Pricing Options
Apple Spending $500M on Apple Arcade
We kick off today’s update with my thoughts on Disney’s investor day and Disney+. The discussion then turns to what Disney+ pricing may mean for Apple TV+ pricing. The email concludes with news that Apple is spending hundreds of millions of dollars on Apple Arcade. We go over why the news is so remarkable and the difference between Apple funding original video for Apple TV+ and iOS games for Apple Arcade.
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.
Receive Above Avalon Weekly Articles via Email. Receive the weekly Above Avalon article via email. This feature is only available to members.
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.
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.
Curation as a Business Model, YouTube TV Price Increase, Thursday Q&A
Today's Above Avalon daily update includes the following topics:
Curation as a Business Model
YouTube TV Price Increase
Thursday Q&A
We begin today’s update in video streaming land and my thoughts on why proper and intelligent curation is not an attractive business model for most companies playing in the content game. This is why Apple’s Curation for Casual strategy for content distribution is so intriguing. The discussion then turns to YouTube TV’s price increase and why nearly every slimmed down cable bundle is pushing through higher prices. The price increases are not sitting well with users. We conclude with the latest installment of Thursday Q&A. I answer the following questions from Above Avalon members:
What is the rationale behind Apple removing games from Apple Arcade versus keeping a back catalog like streaming video and music services?
What are your thoughts on Apple keeping 50% of Apple News+ revenue?
In light of the recent iPad mini update, how do you perceive this new model? Does Apple have high aspirations for the model?
What is the difference between FY2Q19 and CY2Q19?
If you were allowed to ask a question on Apple's FY2Q19 earnings call, what would you ask?
This daily update is available for Above Avalon members. To continue reading, click here.
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Sizing Up Apple's Opportunity in Health, John Giannandrea Poaching Google?, Netflix Ends AirPlay Support
Today's Above Avalon daily update includes the following topics:
Sizing Up Apple's Opportunity in Health
John Giannandrea Poaching Google?
Netflix Ends AirPlay Support
We begin today’s update with my thoughts on Morgan Stanley’s 48-page report on Apple and healthcare. There was one glaring issue found in the report when it came to Apple and monetizing health that didn’t sit right with me. The discussion then turns to Apple’s recent high-profile addition to its AI team. We look at whether or not Apple’s John Giannandrea, SVP of Machine Learning and AI Strategy, is poaching Google. The email concludes with Netflix ending AirPlay support and why the news is a disappointing one with the long-term Apple / Netflix relationship in mind.
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Apple's "Curation for Casual" Strategy, Content Distribution as a Core Technology, Apple's Cross-Platform Strategy for Content
Today's Above Avalon daily update includes the following topics:
Apple's "Curation for Casual" Strategy
Content Distribution as a Core Technology
Apple's Cross-Platform Strategy for Content
We begin today’s update with additional comments on the latest Above Avalon article, “Why Apple Is Getting Into Original Content” In particular, we look at something that I'm calling Apple's "Curation for Casual" strategy for content. The discussion then turns to how Apple can turn content distribution into a competitive advantage. We conclude by revisiting Apple’s cross-platform strategy for content and why some content distribution services are exclusive to Apple devices while others are available on third-party devices.
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Amazon Wireless Headphones, Powerbeats Pro, Tesla 1Q19 Vehicle Deliveries
Today's Above Avalon daily update includes the following topics:
Amazon Wireless Headphones
Powerbeats Pro
Tesla 1Q19 Vehicle Deliveries
We begin today’s email in wireless headphone land. The discussion kicks off with news of Amazon wanting to compete in the wireless headphone market with a product that resembles AirPods. We go over why so many companies have no choice but to enter the wireless headphone market and the big problem that Amazon faces. The discussion then turns to Apple’s Powerbeats Pro, the company’s first truly wireless pair of Beats headphones. There are a few interesting observations found with Apple selling both AirPods and Powerbeats Pro. The email concludes with my thoughts on Tesla’s 1Q19 vehicle deliveries and what the numbers tell us about the broader electric car market.
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More Apple News+ Tidbits, The Incredible Shrinking Apple?, Apple's Fashion Presence
Today's Above Avalon daily update includes the following topics:
More Apple News+ Tidbits
The Incredible Shrinking Apple?
Apple's Fashion Presence
We begin today’s email with additional details behind Apple News+ including my thoughts on early News+ subscriber numbers. The discussion then turns to the New York Times opinion piece arguing that Apple is not placing big enough bets and is increasingly prioritizing monetizing existing users versus expanding the user base. There are a number of critical issues and errors found in the article. The email concludes with another look at Apple’s approach to fashion. The NYT’s fashion director and chief fashion critic, Vanessa Friedman, thinks Apple Watch plays a limited role in fashion while other Apple products have surprisingly come to play a bigger fashion role. We go over the glaring problem found in Friedman’s stance.
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Publishers Wary of Apple News+, Jony Ive on AirPods, Apple Continues to Poach Tesla
Today's Above Avalon daily update includes the following topics:
Publishers Wary of Apple News+
Jony Ive on AirPods
Apple Continues to Poach Tesla
We begin today’s email with Apple News+ and my thoughts on how the service may impact the publishing industry. The discussion then turns to new comments from Jony Ive regarding why AirPods became a cultural phenomenon after initially being panned by the press. We conclude with a closer look at the newest high-profile Project Titan hire. Apple continues to poach hardware engineering talent from Tesla. We go over what the development means for Apple’s Project Titan.
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Apple Cancels AirPower, My AirPower Theory, Mac Butterfly Keyboard Woes Continue
Today's Above Avalon daily update includes the following topics:
Apple Cancels AirPower
My AirPower Theory
Mac Butterfly Keyboard Woes Continue
We begin today’s email with AirPower. The discussion includes my theory connecting all of the dots regarding AirPower and what the project’s cancellation tells us about Apple’s leadership structure. The email then shifts to the ongoing issues found with MacBook butterfly keyboards. We go over why Apple continues to move forward with the keyboard design and how the entire butterfly keyboard saga is an offshoot of the thesis found in my article, “The Mac Is Turning into Apple’s Achilles’ Heel.”
This daily update is available for Above Avalon members. To continue reading, click here.
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