Jawbone's Last Stand, Declining Developer Interest in Apple Watch
Today's Above Avalon stories:
- Jawbone's Last Stand
- Declining Developer Interest in Apple Watch
We kick off today's email by taking a closer look at two recent developments concerning Jawbone's speaker business and UP fitness trackers. The company appears to be taking a last stand when it comes to wrist wearables. We discuss the news and implications it will have on the broader wrist wearable space. We then turn to a polarizing Business Insider article on Apple developers losing interest in Apple Watch. We take a deep dive into what may be going on and a few observations that I had concerning the factors driving lackluster developer interest in the Watch. There are a few things to keep an eye on regarding watchOS heading into WWDC.
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Tim Cook Discusses Apple's 10-Year Outlook, Apple Researching Electric Car Charging, Thursday Q&A
Today's Above Avalon stories:
- Tim Cook Discusses Apple's 10-Year Outlook
- Apple Researching Electric Car Charging
- Thursday Q&A
We begin today's email by going over Tim Cook's interview with Neelie Kroes in the Netherlands earlier this week. A number of Cook's comments caught my attention. We then turn to news that Apple is researching electric car charging. While the subject may not be shocking given Apple's intention to sell an electric car, we use the opportunity to begin discussing some of the larger issues concerning electric car charging infrastructure. The email concludes with Thursday Q&A (questions from Above Avalon members). This week's question:
- "Should Apple buy Netflix?"
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Apple to Launch Siri SDK at WWDC, Apple Working on Siri Speaker, Toyota Partners with Uber
Today's Above Avalon stories:
- Apple to Launch Siri SDK at WWDC
- Apple Working on Siri Speaker
- Toyota Partners with Uber
We kick off today's email by taking a closer look at The Information's report that Apple will launch a Siri SDK at WWDC next month. The best way to analyze this news is to take a step back and take a broader look at Siri. We discuss the two reasons why Apple has been holding back Siri and why the environment is changing. The email then turns to news that Apple is also reportedly working on a Siri speaker similar to Amazon Echo. We conclude with a closer look at Toyota partnering with Uber (and VW partnering with Gett). It continues to be very busy in the ridesharing industry.
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Xiaomi Hits a Wall in China, Spotify's 2015 Financials, Uber Begins Testing Self-Driving Cars
Today's Above Avalon stories:
- Xiaomi Hits a Wall in China
- Spotify's 2015 Financials
- Uber Begins Testing Self-Driving Cars
We begin today's email by taking a closer look at Xiaomi's growing list of troubles. After covering the company's overall revenue, smartphone unit sales, and services revenue shortfalls in 2015, we take a step back to see a few broader implications on the Chinese smartphone market. The email then turns to Spotify and the company's latest financials. We break down the numbers to reach a few observations on the company and music streaming in general. We conclude with Uber beginning to test its self-driving cars. This is a pretty big event in the automobile world.
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Above Avalon Is Officially Sustainable, Apple Presses Reset Button in India, Don't Expect a Special, Cheap iPhone for India
Today's Above Avalon stories:
- Above Avalon Is Officially Sustainable
- Apple Presses Reset Button in India
- Don't Expect a Special, Cheap iPhone for India
We kick off today's email with a few words on the first-year anniversary of Above Avalon membership and the daily updates. We then take a closer look at Tim Cook's 38-minute interview with NDTV in India. Cook discussed a number of important topics concerning Apple's long-term strategy for India. The email then turns specifically to the topic of iPhone in India and why Apple is not going to release a special, low cost iPhone model just for India.
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Google I/O 2016, Apple vs. Google, Thursday Q&A
Today's Above Avalon stories:
- Google I/O 2016
- Apple vs. Google
- Thursday Q&A
Today's email goes over my thoughts and observations about Google's I/O 2016 keynote. After discussing my overall reactions, we go over some of the products and features introduced onstage. We then take a step back and compare Google's ambition to move beyond devices with Apple's core competency in hardware. The two strategies seem to be at odds with each other. The email concludes with Thursday Q&A (questions from Above Avalon members). This week's questions:
- "What percentage of Didi did Apple purchase?"
- "Do you consider Apple Watch to be a Steve Jobs legacy endeavor?'"
- "What did you mean Buffett's IBM purchase has to do with financial engineering?"
- "If Apple captures 95% of smartphone profits, how can other companies continue to innovate in the space?"
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Apple TV Unit Sales Estimate, The Skinny Cable Bundle Mirage, Tim Cook Visits China and India
Today's Above Avalon stories:
- Apple TV Unit Sales Estimate
- The Skinny Cable Bundle Mirage
- Tim Cook Visits China and India
We kick off today's email by discussing Apple TV sales share in the U.S. After looking at the latest trends, we go over my estimate for Apple TV unit sales on an annual basis. The discussion is then broadened to go over why I think the skinny cable bundle will end up being a mirage to many tech companies, including Apple. The email concludes with some thoughts and perspective on Tim Cook's trip to China and India. There is way too much cynicism in the press regarding his trip.
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Berkshire Hathaway Buys AAPL Stake, Deep Dive into 1Q16 Wearables Market
Today's Above Avalon stories:
- Berkshire Hathaway Buys AAPL Stake
- Deep Dive into 1Q16 Wearables Market
Today's email begins by taking a closer look at Berkshire Hathaway buying a $1 billion stake in AAPL. We discuss the notion that the move suggests Apple is now a value stock. Upon closer examination, Berkshire Hathaway's thought process towards AAPL isn't too mysterious. The email then turns to new data for the wearables market. We look at the latest smartwatch and fitness band sales trends with additional comments about the broader wearables market in 1Q16.
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Apple Invests in Didi Chuxing
Today's email is dedicated to Apple buying a $1 billion stake in Didi Chuxing, China's largest ridesharing company. The email is divided into a number of sections:
- Didi Chuxing 101 - A Didi Chuxing Primer.
- Investment Rationale - The three primary reasons for Apple investing in Didi.
- The Ridesharing War - A closer look at why the ridesharing industry is turning into an "Uber vs. everyone else" war.
- Apple's Game Plan - My theory on Apple's plan for Didi and ridesharing.
- What's Next? - Details on what I'm expecting in terms of Apple making additional ridesharing investments.
- Conclusion
The full story is available for Above Avalon members. To continue reading, click here.
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Project Titan Is Different, Tech R&D Isn't Created Equally, Thursday Q&A
Today's Above Avalon stories:
- Project Titan Is Different
- Tech R&D Isn't Created Equally
- Thursday Q&A
Today's email builds off my article "Apple R&D Reveals a Pivot Is Coming." We begin by discussing the motivation behind the article and why public reaction surrounding Apple changed two weeks ago with 2Q16 earnings. The email then goes into greater detail on why I think Project Titan is very different from the typical Apple R&D project. This uniqueness is the reason for my very high level of confidence that we will indeed see an electric car from Apple. We then go over some of the R&D data for the tech industry that I collected while researching the article. There are a few interesting observations worth discussing. The email concludes with Thursday Q&A (questions from Above Avalon members). This week's questions:
- "What is classified as Apple R&D?"
- "In what year do you believe Apple will no longer be referred to as 'the iPhone company?'"
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The Swiss Watch Market Is Collapsing, Fossil on Traditional Watch Market: It's Awful, Good Signs for Apple Watch
Today's Above Avalon stories:
- The Swiss Watch Market Is Collapsing
- Fossil on Traditional Watch Market: It's Awful
- Good Signs for Apple Watch
Today's email has a watch theme. We begin by taking a closer look at the latest Swiss watch market export data. Not only do things look quite negative but the situation is worsening. We go over the current situation and all of the moving parts. The discussion is then expanded to include Fossil's 1Q16 earnings and management's commentary on the watch market. By looking at both Fossil (sells watches for many luxury brands) and the Swiss watchmakers, we end up with a complete view of the traditional watch market. We conclude with Apple Watch and a few good signs that have appeared for Apple's newest product category.
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iPhone Development 101, Thoughts on iPhone 7 Rumors
Today's Above Avalon stories:
- iPhone Development 101
- Thoughts on iPhone 7 Rumors
We kick off today's email by discussing iPhone development, namely the four primary drivers responsible for the vast majority of change seen year to year in the iPhone business. This "iPhone Development 101" course allows us to then look at the latest iPhone 7 rumors with a different perspective. With increased attention put on slower iPhone upgrade rates and longer iPhone life cycles, many are becoming nervous that the iPhone 7 may not lead to any significant improvement in demand trends. In an effort to address that concern, we look at Apple's likely motivation with the iPhone 7 and why we need to consider Apple's iPhone plans in 2017 and 2018 to completely understand the iPhone 7.
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Alphabet Partners with Fiat Chrysler for Self-Driving Cars, GoPro Is Up to Something
Today's Above Avalon stories:
- Alphabet Partners with Fiat Chrysler for Self-Driving Cars
- GoPro Is Up to Something
We begin today's email by taking a closer look at news of Alphabet partnering with Fiat Chrysler to make self-driving cars. We look at the motivation guiding each company in this partnership and why I remain skeptical. Next, we compare Alphabet's strategy for self-driving cars to Apple's and Tesla's strategies. We are getting a number of clues as to how various new players are thinking about the auto industry. The email then turns to GoPro's 1Q16 earnings. Even though GoPro is facing a number of daunting challenges given the current environment, it appears GoPro may be looking to change its camera strategy for long-term survival.
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Elon Musk Doubles Down on Manufacturing, Fitbit 1Q16 Earnings, Thursday Q&A
Today's Above Avalon stories:
- Elon Musk Doubles Down on Manufacturing
- Fitbit 1Q16 Earnings
- Thursday Q&A
We begin today's email by taking a closer at Tesla's 1Q16 earnings call. Elon Musk had plenty to say about the Model 3 production and his goals for Tesla. We discuss Musk's desire to double down on auto manufacturing, including why he made that decision and the implications for Apple's electric car project, Project Titan. We then switch over to discuss Fitbit's 1Q16 earnings. Fitbit remains the best company to observe clues about the wrist wearables market. After comparing some Fitbit vs. Apple Watch metrics, I explain why I think the Fitbit and Apple Watch dynamic is changing.
The email concludes with Thursday Q&A, where I answer questions from Above Avalon members. This week's member question/topic:
You have consistently said the iPhone's biggest competitor is last year's iPhone. Is it possible that the iPhone 6s just hasn't competed well versus the iPhone 6? If the rumor is that the iPhone 7 won't be too different from the iPhone 6s, why should we be confident that the iPhone 7 will compete any better with the iPhone 6s or even the iPhone 6?
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Tim Cook's Questionable Interview with Jim Cramer, Apple Hits Another Roadblock in India
Today's Above Avalon stories:
- Tim Cook's Questionable Interview with Jim Cramer
- Apple Hits Another Roadblock in India
We begin today's email by taking a closer at Tim Cook's interview with CNBC's Jim Cramer. Cook wanted a second chance to explain Apple's 2Q16 earnings. However, the interview just didn't hit the mark. We also discuss an observation I had regarding how Cook handles financial-related questions. This trend may explain why Apple seems to be having such a difficult time coming up with a new Wall Street narrative. The email then turns to news that Apple's application to sell remanufactured iPhones in India has been rejected. We go over the implications of this development and what it may mean for Apple's plans in India.
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