The Unknown Tablet Market, Elon Musk is Experimenting, Thursday Q&A
Today's Above Avalon stories:
- The Unknown Tablet Market - Having a product category that is only five years old report a 7% decline in unit sales year-over-year makes Apple's future iPad plans that much more complicated.
- Elon Musk is Experimenting - A closer look at Tesla's referral program and what it may mean for electric car (and luxury) retail.
- Thursday Q&A (questions submitted by members) - What does the future for ESPN look like in a world where the cable bundle is on the decline? Do new media enterprises like Vine and Snapchat represent a threat to Apple's TV ambitions?
Kicking off today's email, we take a closer look at IDC's latest tablet market tracker. The iPad market's reduced visibility and lack of momentum have implications for Apple's future plans in the product category. We then shift over to news that Elon Musk is ready to experiment with how electric cars are sold in the U.S. We conclude with Thursday Q&A, with this week focused on media (ESPN, Vine, and Snapchat).
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New Apple Watch Ads, Apple Music Subscriber Numbers, Motorola's New Phones
Today's Above Avalon stories:
New Apple Watch Ads
Apple Music Subscriber Numbers
Motorola's New Phones
We begin today's email by discussing Apple's latest Apple Watch ads where the focus is on apps. Next, we shift over to a new report saying that Apple has been going around sharing Apple Music subscriber data with the music industry. We conclude with a closer look at Motorola's latest smartphone lineup unveiled yesterday and a few takeaways when thinking of the larger smartphone space and impact on Apple.
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Apple Music's Problem, Apple Watch Coming to Best Buy, I Saw My First Apple Watch in the Wild
Today's Above Avalon stories:
- Apple Music's Problem - We take a closer look at iTunes Match, Apple Music, and what may be causing so many issues for some users. There may be factors outside of Apple's control at play.
- Apple Watch Coming to Best Buy - We discuss two much bigger Apple Watch stories at play with news that Best Buy will sell Apple Watch.
- I Saw My First Apple Watch in the Wild - It took 92 days, but I finally saw someone else wearing an Apple Watch. I had a few comments on the observation and what it says about the Watch.
In today's email, we tackle what may be causing most of the problems with Apple Music that has led some long-time fans to lose faith in the service so quickly. Next, we switch over to news that Best Buy will begin selling Apple Watch next week. We conclude with a few words on me seeing my first Apple Watch in the wild over the weekend and how I'm thinking about the next phase of Apple Watch marketing.
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Why There's Nothing Quite Like iPhone, Apple Talked with BMW About Electric Cars
Today's Above Avalon stories:
- Why There's Nothing Quite Like iPhone - We go over each of the 11 features highlighted in Apple's latest iPhone marketing webpage.
- Apple Talked with BMW About Electric Cars - There a few interesting tidbits/takeaways to think about when seeing the latest report saying Apple executives discussed electric cars with BMW. Why would Apple be interesting in the BMW i3?
We kick off today's email by talking about Apple's new webpage dedicated to the iPhone highlighting 11 reasons that make an iPhone an iPhone. I found it quite useful and informative to understand how Apple management looks at the iPhone's strengths. We also discuss the recent report saying Apple was in discussions with BMW about electric vehicles, including why Apple would be interested in the BMW's electric i series.
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The Day After Apple Earnings on Wall Street, Washington Looking at Foreign Cash Tax Reform, Thursday Q&A
Today's Above Avalon stories:
- The Day After Apple Earnings on Wall Street (subtopics include: China Slowdown?, Inventory Issues, Apple Watch Retail Locations, Management Tone)
- Washington Looking at Foreign Cash Tax Reform
- Thursday Q&A - What do I think about Apple opening only three Apple retail stores last quarter?
We kick off today's email by discussing Apple sell-side analysts and a few additional points about Apple's earnings. We then shift to the topic of Washington taking on tax reform and how it may impact Apple's $181 billion of cash sitting offshore. We conclude with Thursday Q&A, which is focused on Apple opening up just three retail stores last quarter.
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Apple 3Q15 Earnings
Today's Above Avalon stories:
On a granular level, I picked out five sub-themes that I saw from Apple's 3Q15 earnings report and conference call (the full email is 3,000 words):
- Big Picture
- Stock Price Reaction
- iPhone: Relatively Quiet (Which is Good)
- Apple Watch: It's Very Early and Things Look Okay
- iPad Sales Growth: Fact vs. Theory
- Share Buyback: It's Slowing
- Additional Earnings Call Notes
Apple reported strong 3Q results due to sustained iPhone 6 and 6 Plus sales momentum throughout the world, especially in China, Europe, Japan, and emerging markets. Revenue growth would have been 41% excluding FX impact, which is downright remarkable given Apple's size. Not only are larger screen iPhones resonating with consumers, but they continue to provide Apple with margin expansion and pricing power. The iPhone 6 Plus may end up impacting the smartphone landscape more than any other phone in the market. While Apple gave enough clues to reach Apple Watch sales of between 2-3 million units, it is simply too early to draw any long-term conclusions about the device's sales potential.
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Apple Car Development is Advancing, Judging Apple Watch Success/Failure
Today's Above Avalon stories:
- Apple Car Development is Advancing
- Judging Apple Watch Success/Failure
For today's email, we will discuss the WSJ report indicating Apple continues to hire auto-related talent. The closer you look at these hires, the more convincing the evidence that Apple's automobile plans are indeed moving forward and are just as ambitious as I first thought. Next, we will discuss the article I published yesterday titled "Flops, Winners, and Outliers." I continue to think a lot about the Apple Watch and am ready to begin laying out the groundwork that my analysis is going to follow.
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The Wild Ride on Wall Street, Beme and the iPhone Ecosystem, Apple Music - A Few Thoughts Three Weeks In
Today's Above Avalon stories:
- The Wild Ride on Wall Street - We take a closer look at what drove such strong price performance in not only GOOG and NFLX following earnings, but the entire tech landscape last week. Do last week's stock price moves shed any light on Apple's upcoming earnings report on Tuesday and possible Wall Street reaction?
- Beme and the iPhone Ecosystem - There is much to think about with Casey Neistat's new company and app called Beme, which launched this past Friday. The app is increasingly shaping up to be a useful litmus test for the App Store and iPhone ecosystem.
- Apple Music - A Few Thoughts Three Weeks In - A quick update on how I am using Apple Music and what it may suggest about the music service.
Today, we kick things off by circling back to the wild ride on Wall Street last week, including Google and Netflix's earnings. There are lessons included in each report that can be used to better understand how Wall Street looks at Apple earnings and how to think about post-earnings stock reactions. Next, we discuss Beme, one of the more high-profile iOS app launches in a while and how I am using the app as a litmus test for a number of different things dealing with the App Store and larger iPhone ecosystem. We conclude with a few words on my Apple Music usage three weeks in.
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The New iPod Touch is an Updated iPod, AAPL Earnings Preview (Continued), Thursday Q&A
Today's Above Avalon stories:
- The New iPod Touch is an Updated iPod - After looking at the most recent iPod sales, it is clear why Apple updated the iPod touch. However, many are making errors when arriving at long-term implications from the change, including comparing the iPod touch to an iPhone.
- AAPL Earnings Preview - Guidance, Capital Management, Wall Street Expectations - We conclude our detailed preview of Apple's earnings next week by discussing guidance, buyback, and how Wall Street is positioning itself ahead of earnings.
- Thursday Q&A - We discuss two questions submitted by members. This week's topics include whether a higher dividend payout ratio would help Apple's valuation and what Apple can do to change investors' perception and a higher P/E multiple.
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Expecting Another Strong iPhone Quarter, Live TV Will be Apple TV's Killer Feature, Burberry Executives in High Demand
Today's Above Avalon stories:
- Expecting Another Strong iPhone Quarter - I discuss my latest iPhone sales estimate. China is shaping up to be the driving force of 40% iPhone unit growth year-over-year.
- Live TV Will be Apple TV's Killer Feature - We take a closer look at how offering live TV via more than 850 affiliate stations could be a very big deal for Apple's new video streaming service.
- Burberry Executives are in High Demand - Following news that Tesla hired a senior Burberry executive, we look into what may be going on with technology luxury retail and how it will impact Apple.
We kick things off by going over my iPhone unit sales estimate for Apple's upcoming earnings. It is shaping up to be another strong quarter thanks to China. Next, we shift over to the latest report from the New York Post about Apple looking to position local TV programming as a key feature of its rumored TV/video services. We conclude by discussing why Burberry executives seem to be in such high demand in technology with news that Tesla has hired a senior Burberry executive to lead North American sales.
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Apple Earnings Preview Part One - Apple Watch, Mac, and iPad
Today's Above Avalon stories:
- Establishing Quarterly Apple Watch Sales Estimate - Even though Apple will lump in Apple Watch revenue with Other Products, there will be ways of reaching Apple Watch unit sales estimate. After discussing Apple Watch supply/demand, I provide an easy cheat sheet to convert Other Products revenue to Apple Watch sales estimate.
- Setting Quarterly Mac Sales Expectations - The Mac continues to take share in a category that is struggling. We discuss Gartner/IDC reports and how they have matched up with actual Mac shipments and what the latest reports may point to for the latest Mac sales.
- iPad Sales Continue to Look Weak - We discuss the iPad line and where things may be headed from here.
We kick off today's email by going over my thoughts on Apple Watch sales estimates for the quarter. I included a "cheat sheet" to easily distinguish Apple Watch sales from the Other Product revenue line item that Apple will report next week. We next shift over to the Mac category, in which all signs point to continued solid sales momentum this past quarter. We conclude with the iPad and a few reasons why sales will continue to be on the weak side. You will find that much of the discussion today involves the products themselves, which I think is more useful than strictly talking dollars and cents given the iPhone's oversized impact on Apple's earnings.
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The iPhone is Taking Over Apple, Apple is Producing Music Videos, The U.S. Government is Sniffing Around the App Store
Today's Above Avalon stories:
- The iPhone is Taking Over Apple (Inside Commentary) - Apple will be the iPhone company for the foreseeable future. Even though the product presents certain risks and benefits to the company, Apple's most significant risk factors aren't related to quarterly sales gyrations caused by the iPhone representing 80% of earnings.
- Apple is Producing Music Videos - We discuss the Pitchfork article that Apple is producing a few music videos in-house. What does this suggest about Apple's future plans and producing its own content?
- The U.S. Government is Sniffing Around Apple's App Store - The FTC is taking a closer look at the complaints that Apple's App Store is uncompetitive to rivals. We take a closer look at which restrictions some third-parties are not happy with.
Today, we start by going over how the iPhone is taking over Apple. While Apple faces risks associated with the iPhone, the company's largest risks have nothing to do with the iPhone. We next discuss Pitchfork's report that Apple is producing music videos and what that may mean about Apple's future in content creation. Finally, we conclude with the FTC looking at complaints from third-parties saying the App Store is uncompetitive and why it may be a tough argument to win when going up against Apple.
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Spotify Seems Desperate, Apple Plans Record iPhone Production, Q&A Thursday
Today's Above Avalon stories:
- Spotify Seems Desperate - Not only is Spotify is seemingly battling Apple Music, but their latest move to go up against Apple's App Store smells of desperation.
- Apple Plans Record iPhone Production - We take a closer look at the WSJ report indicating Apple is planning on producing 85-90 million units of two new iPhone models and what it suggests for Apple's iPhone business.
- Q&A Thursday - I answer a few questions from members. This week's questions include what Wall Street looks for in AAPL to determine if it is a buy or sell, Apple's sensitivity to interest rates, ResearchKit, and why Apple is embracing human curation.
Today's first story deals with Spotify and what increasingly looks like moves of desperation being taken by the leading music streaming service. Next, we shift over to the WSJ story that includes the first supply data for the new iPhones expected to be announced in approximately two months. We conclude with the second installment of Q&A Thursday.
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Quiet Apple Watch Tables (Continued), Chinese Stock Market Crash Impact on Apple, Showtime Arrives on Apple TV
Today's Above Avalon stories:
- Quiet Apple Watch Tables in Apple Retail Stores (Continued) - After making one additional point about those quiet Apple Watch tables in Apple retail stores, we discuss the Marketwatch report saying Apple Watch is flopping and how to approach Slice Intelligence data.
- Chinese Stock Market Crash Impact on Apple - I discuss my experience with the 2008 and 2009 U.S. financial crisis, before going over the Chinese stock market crash and what the ongoing situation means for AAPL.
- Showtime Arrives on Apple TV - The future of TV is actually closer than one would expect and it is looking expensive.
We kick off today's email with a few additional comments on those quiet Apple Watch tables and a new "report" from MarketWatch making the rounds indicating the Apple Watch is truly flopping. Next, we shift over to the developing situation in China as various stock indexes continue to crash. While one assumes this can't be a good situation for Apple given its exposure to China, there is much more to the story than what meets the eye. We conclude with Showtime coming to Apple TV and how a la carte TV is quickly becoming an expensive option for some consumers.
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App Store Economics, Empty Apple Watch Tables, Samsung Preannounces Weak Earnings
Today's Above Avalon stories:
- App Store Economics: Troubled Indie Business Models - We take a closer look at Brent Simmons' piece about the App Store becoming an environment in which it is too difficult for indie artists to compete. I use a real-world example of a funded app company to show what is really happening in the iOS ecosystem.
- Empty Apple Watch Tables in Apple Stores - I continue to have people tell me that they are surprised with the lack of people around Apple Watch tables. Is this something to be concerned about? What is going on?
- Samsung Preannounces Weak Earnings - Samsung's issues may be deeper than just market dynamics.
We kick things off by diving into the topic of App Store economics and the recent string of posts from iOS developers, beginning with Brent Simmons, that look at the App Store environment and conclude the indie app business model is in big trouble. We then shift over to one topic that has been on my mind lately concerning empty Apple Watch tables in Apple retail stores. We conclude with a quick overview of Samsung's earnings preannouncement.
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