The Apple Watch Paradox, Math and Logic Behind My $10B Apple Watch Valuation, Thursday Q&A
Today's Above Avalon stories:
- The Apple Watch Paradox
- Math and Logic Behind My $10B Apple Watch Valuation
- Thursday Q&A
We kick off today's email by continuing the discussion found in my article, "Apple Watch Is Already a $10 Billion Business." Specifically, we look at how the Apple Watch has turned into a paradox. The email then turns to the math I used to obtain a $10 billion valuation for the Apple Watch business. We also discuss some of the logic I relied on to properly value Apple Watch's growth prospects. We conclude with Thursday Q&A (questions from Above Avalon members). This week's question:
- What do you make of Apple's unusual Apple Watch band retail strategy?
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The Path to Remove the iPhone Home Button, A Google Smartphone
Today's Above Avalon stories:
- The Path to Remove the iPhone Home Button
- A Google Smartphone
We kick off today's email by discussing the idea of Apple adding Force Touch to the iPhone home button this September. We go over implications of the move including how such a feature would represent a path for eventually removing the iPhone home button. The email then turns to reports that Google is planning to sell a Google-branded smartphone later this year. We go over Google's long-standing fascination with hardware and my thoughts on a Google smartphone.
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iPhone Headphone Jack Debate Is Off Base, Lyft Looking for Strategic Partners, Disney CEO Talks Business
Today's Above Avalon stories:
- iPhone Headphone Jack Debate Is Off Base
- Lyft Looking for Strategic Partners
- Disney CEO Talks Business
We begin today's email by taking a closer look at the growing debate concerning Apple removing the headphone jack from the upcoming new iPhones. Upon closer examination, I think the debate is off base and actually missing the fundamental drivers and motivation behind the move. The email then turns to reports that Lyft hired Frank Quattrone and Qatalyst Partners as well as a few observations I had about Lyft, ridesharing, and Apple. We conclude with takeaways from Disney CEO Bob Iger's interview with The Hollywood Reporter which covered ESPN, Silicon Valley getting into content creation and nurturing a storytelling culture.
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Mapping Apple's Post-iPhone Era, Brexit and AAPL
Today's Above Avalon stories:
- Mapping Apple's Post-iPhone Era
- Brexit and AAPL
We kick off today's email by continuing the discussion raised in my recent article about Apple's post-iPhone era. There were a few additional points related to how we would actually map out this new product era in terms of additional form factors and services. We then take a deep dive into Brexit and its impact on AAPL. After discussing a few headwinds created by the current situation, we also go over one AAPL benefit that may come from Brexit.
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Tesla Offers to Buy SolarCity, Thursday Q&A
Today's daily update is focused on Tesla offering to buy SolarCity. The email is broken into five sections:
- Transaction Details
- Deal Rationale
- My Theory About the Offer
- Observations
- Implications for Apple
The email concludes with Thursday Q&A and the following question from an Above Avalon member: Is Apple making a strategic mistake by waiting a year to push significant iPhone updates?
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iPhone Won't Be Focus of Apple's September Event, Thoughts on an iPhone Upgrade "Super Cycle" in 2017
Today's Above Avalon stories:
- iPhone Won't Be Focus of Apple's September Event
- Thoughts on an iPhone Upgrade "Super Cycle" in 2017
We kick off today's email with a discussion of the WSJ's latest report on the features planned for the 2016 and 2017 iPhones. There were three items from the WSJ's report that jumped out at me. The email then turns specifically to what these iPhone rumors imply about potential iPhone sales in FY16, FY17, and FY18. After circling back to my FY16 and FY17 iPhone sales estimate, I share a few thoughts on the idea that the 2017 iPhone will unleash an upgrade "super cycle."
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iMessage for Android: Don't Hold Your Breath, HBO Head Talks Video Streaming
Today's Above Avalon stories:
- iMessage for Android: Don't Hold Your Breath
- HBO Head Talks Video Streaming
We begin today's email with a deep dive into the topic of Apple bringing iMessage to Android. After going over both sides to the debate, we take a closer look at how Apple's WWDC keynote last week gave me greater confidence that we won't likely see iMessage on Android anytime soon. Keeping with an Apple services theme, we then turn to video streaming. HBO chief Richard Plepler sat down for an interview with the WSJ focused on TV's future and the strategy for winning at video streaming. With Apple's video streaming ambitions in mind, we go over a few of my takeaways from Plepler's interview.
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Schiller and Federighi Speak Post-WWDC, iPhone 6 and 6 Plus "Banned" in Beijing, BMW's Electric Car Strategy Isn't Working
Today's Above Avalon stories:
- Schiller and Federighi Speak Post-WWDC
- iPhone 6 and 6 Plus "Banned" in Beijing
- BMW's Electric Car Strategy Isn't Working
We kick off today's email by discussing the appearance of Phil Schiller and Craig Federighi (Apple SVPs) on John Gruber's podcast, "The Talk Show." I had a number of observations about some of their commentary. The email then turns to news out of China that the iPhone 6 and 6 Plus have been "banned" in Beijing due to patent infringement. We go near-term and long-term implications from this news and why I think this particular iPhone 6 story is extra odd. We conclude with a look at BMW and why the BMW i3 is failing to catch in the marketplace. There are difficult lessons that every legacy auto maker will likely end up facing when it comes to selling electric cars.
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Apple Music Is Succeeding, Apple's Content Strategy Is Becoming Clearer, Thursday Q&A
Today's Above Avalon stories:
- Apple Music Is Succeeding
- Apple's Content Strategy Is Becoming Clearer
- Thursday Q&A
We kick off today's email by discussing the latest Apple Music subscriber numbers and what it means for Apple's music streaming service. The email then turns to interesting comments from Apple Music executives, including Eddy Cue and Jimmy Iovine about music streaming and Apple's broader content strategy. Apple's game plan is becoming clearer and Beats is going to play a very important role. We conclude with Thursday Q&A (questions from Above Avalon members). This week's question:
- How do I archive, catalog and maintain articles, notes, and other reference materials to track Apple, Tesla, and other companies and industries?
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WWDC 2016: Detailed Thoughts and Observations
Today's story:
- WWDC 2016: Detailed Thoughts and Observations
While yesterday's daily update was focused on the major themes from WWDC, today's update includes more granular thoughts and observations from Apple's WWDC keynote.
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WWDC 2016: Major Themes
Today's daily update is focused on reviewing Apple's WWDC keynote. Along with a big picture overall view, the email covers four major themes from Apple's presentation:
- WWDC 2016: The Big Picture
- Attending the Keynote
- watchOS 3: Pressing the Reset Button
- iOS 10: Swiping to Something Big Next Year
- iMessage: Embracing Snapchat Themes
Tomorrow's daily update will include additional thoughts and observations on Apple's WWDC keynote.
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WWDC Goodwill, Amazon to Launch Standalone Music Streaming Service
Today's Above Avalon stories:
- WWDC Goodwill
- Amazon to Launch Standalone Music Streaming Service
Greetings from San Francisco. I am in the city to attend Apple's WWDC keynote. We begin today's email by going over one of the more interesting strategic implications related to last week's App Store changes. The email then turns to news of Amazon getting ready to launch a standalone music streaming service. With Apple expected to announce "Apple Music 2.0" later today at its WWDC keynote, I share a few thoughts on how such an Amazon offering would impact the music streaming space. Tomorrow's daily update will be dedicated to the WWDC keynote.
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Apple Announces App Store Changes, WWDC Preview
Today's Above Avalon stories:
- Apple Announces App Store Changes
- WWDC Preview
We begin today's email by going over the big changes coming to the App Store. We go over the announcement in detail, in addition to discussing my thoughts on each of the major changes. The email then turns to what I'm expecting from Apple's developer conference next week. I set the scene for Apple's announcements with additional thoughts and observations on what we should expect with iOS, watchOS, tvOS, macOS, Services, and the prospects of new hardware at WWDC. We conclude with my one wild card item for WWDC 2016.
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A Capital Efficient Tesla, Bendable Samsung Smartphone Screens
Today's Above Avalon stories:
- A Capital Efficient Tesla
- Bendable Samsung Smartphone Screens
We begin today's email by going over the idea that Tesla is a capital efficient automaker. After discussing Baron Capital chairman and CEO Ron Baron's claim that Tesla stock could increase by 20x from current levels, we take a closer look at why it is wrong to assume auto manufacturing will not experience significant change going forward. This thesis has major implications on Apple and Project Titan. The email then turns to a Bloomberg report indicating Samsung is thinking of selling bendable smartphone screens in 2017. I had a few thoughts on Samsung's strategy and the broader concept of bendable screens.
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Didi and Grab Leaders Speak at Code Conference, Didi Discusses Apple and the Future, Coach Developing Apple Watch Bands
Today's Above Avalon stories:
- Didi and Grab Leaders Speak at Code Conference
- Didi Discusses Apple and the Future
- Coach Developing Apple Watch Bands
We kick off today's email by discussing my thoughts and observations from Didi president Jean Liu's and Grab co-founder and CEO Anthony Tan's presentation at Recode's Code conference. Given Apple's recent investment in Didi and the company's pivot into transportation, there is much value in listening to two leaders of the ridesharing industry. In particular, we focus on Jean Liu's comments about Apple, the differences between the U.S. and Chinese auto industries, and where ridesharing is headed in the future. The email concludes with a look at Coach developing Apple Watch bands. We discuss the broader implication Coach Watch bands will have on the Apple Watch ecosystem.
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