Apple 3Q16 Earnings Review: Details
Today's daily update is the second part of my Apple 3Q16 earnings review. Yesterday's update was focused on the major themes (available here). The email covers my perspective on the details from Apple's earnings release and conference call. Twenty-two topics are covered, including:
- Revenue guidance
- Margins
- R&D
- Apple's iPhone channel inventory reduction
The full earnings review is available for Above Avalon members. To continue reading, click here.
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Apple 3Q16 Earnings Review: Major Themes
Today's daily update is focused on reviewing Apple's 3Q16 earnings. Along with a big picture overall of the quarter, the email covers five major themes from the report and conference call:
- Apple 3Q16: Sure Looks Like a Bottom
- It's All About Low Expectations
- iPhone SE Success
- Light at the End of the iPad Tunnel
- Narrative Issues Continue
- China Mystery
Tomorrow's daily update will include additional thoughts and observations on Apple's quarter.
The full earnings review is available for Above Avalon members. To continue reading, click here.
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Bob Mansfield to Lead Project Titan, Project Titan Implications, Apple Talent Questions
Today's Above Avalon stories:
- Bob Mansfield to Lead Project Titan
- Project Titan Implications
- Apple Talent Questions
Today's email is dedicated to discussing the WSJ's big scoop concerning Project Titan. Former Apple executive Bob Mansfield has come out retirement for the second time to lead Project Titan. The email begins with a closer look at Bob Mansfield, including his previous job roles and experiences at Apple. We then go over some of the major implications this move suggests when looking at Apple's electric car plans and the progress being made with Project Titan. We conclude with a look at how this news relates to the long-standing narrative that Apple is having trouble bringing in outside talent.
These stories are available for Above Avalon members. To continue reading, click here.
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AAPL 3Q16 Earnings Preview (Part 5 - Thoughts on AAPL), Deep Dive into 2Q16 Smartwatch Market, Apple Selling Exclusive Watch Bands for Olympics
Today's Above Avalon stories:
- AAPL 3Q16 Earnings Preview (Part 5 - Thoughts on AAPL)
- Deep Dive into 2Q16 Smartwatch Market
- Apple Selling Exclusive Watch Bands for Olympics
Today's email includes the fifth and final installment of my AAPL 3Q16 earnings preview. The previous four parts of the 3Q16 earnings preview are:
We begin today's email by discussing a few big picture themes concerning AAPL shares ahead of Apple's earnings release tomorrow. The email then turns to the latest IDC shipment numbers for the smartwatch industry. We go over a few of my observations on the latest trends. We conclude with a discussion of Apple's Watch band strategy by looking at news of Apple selling limited edition Watch bands in Brazil for the Olympics.
These stories are available for Above Avalon members. To continue reading, click here.
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AAPL 3Q16 Earnings Preview (Part 4 - 4Q Guidance), Tesla's New Master Plan, Thursday Q&A
Today's Above Avalon stories:
- AAPL 3Q16 Earnings Preview (Part 4 - 4Q Guidance)
- Tesla's New Master Plan
- Thursday Q&A
We begin today's email with the fourth installment of my AAPL 3Q16 earnings preview. Part 1 - Methodology was published in Monday's daily update, Part 2 - Services, Mac, iPad, Apple Watch was published in Tuesday's update, and Part 3 - iPhone was published in yesterday's update. In today's update, we discuss my perspective on Apple's upcoming 4Q guidance, including the contributing factors that will play a key role in analyzing management's guidance. The email then turns to Elon Musk's new master plan for Tesla. I take a deep dive through the plan, offering a number of observations on Musk's vision for Tesla. We conclude with Thursday Q&A in which I answer questions from Above Avalon members. This week's questions:
- What will happen if there aren't new Macs announced this fall?
- What do you make of the rumor that Apple will buy Formula 1?
These stories are available for Above Avalon members. To continue reading, click here.
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AAPL 3Q16 Earnings Preview (Part 3 - iPhone), Swatch Issues Profit Warning, 2Q16 Microsoft Surface Shipments
Today's Above Avalon stories:
- AAPL 3Q16 Earnings Preview (Part 3 - iPhone)
- Swatch Issues Profit Warning
- 2Q16 Microsoft Surface Shipments
We begin today's email with the third installment of my AAPL 3Q16 earnings preview. (Part 1 - Methodology was published in Monday's daily update, and Part 2 - Services, Mac, iPad, Apple Watch was published in yesterday's update). Along with going over my iPhone sales estimate, we discuss my broader views on the iPhone business heading into next week's earnings report. The email then turns to Swatch, the largest watchmaker in the world, issuing a profit warning on weak sales. We go over why so much attention is being given to Swatch and why some of the questionable actions being taken by the company suggest intense turmoil in the Swiss watch industry. The discussion then turns to new Microsoft Surface revenue data included in Microsoft's 2Q16 earnings release yesterday. We back into Surface shipment data and then compare it to my iPad and Mac 3Q estimates.
These stories are available for Above Avalon members. To continue reading, click here.
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AAPL 3Q16 Earnings Preview (Part 2 - Services, Mac, iPad, Apple Watch), Netflix Has a Big Problem, SoftBank to Buy ARM Holdings
Today's Above Avalon stories:
- AAPL 3Q16 Earnings Preview (Part 2 - Services, Mac, iPad, Apple Watch)
- Netflix Has a Big Problem
- SoftBank to Buy ARM Holdings
We kick off today's email with the second part of my AAPL 3Q16 earnings preview. We discuss my revenue and unit sales estimates for Services, Mac, iPad, and Apple Watch. The email then turns to Netflix as the company reported earnings yesterday. Upon closer examination, I see the company facing a big problem in video streaming. There are also implications on how Apple may view video streaming. We conclude with my thoughts on SoftBank announcing its intention to buy ARM Holdings and what it may mean for Apple.
These stories are available for Above Avalon members. To continue reading, click here.
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AAPL 3Q16 Earnings Preview (Part 1 - Methodology), Eddy Cue's Odd Interview About TV, Line's IPO
Today's Above Avalon stories:
- AAPL 3Q16 Earnings Preview (Part 1 - Methodology)
- Eddy Cue's Odd Interview About TV
- Line's IPO
We begin today's email with the first part of my AAPL 3Q16 earnings preview. We discuss my view on earnings previews and how my approach is different than Wall Street's. Today's update helps set the stage for the rest of this week's daily updates in which we cover my expectations headed into Apple's earnings release next Tuesday. The email then turns to Eddy Cue's interview with The Hollywood Reporter concerning TV. A few of his comments stood out to me. We conclude with a few brief observations on Line's IPO, including messaging platform valuation. We also discuss why the narrative that some of these messaging platforms are potential threats to Apple and iOS has been exaggerated.
These stories are available for Above Avalon members. To continue reading, click here.
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Why Apple Even Bothers with Music, Spotify Is Moving the Goalposts, Thursday Q&A
Today's Above Avalon stories:
- Why Apple Even Bothers with Music
- Spotify Is Moving the Goalposts
- Thursday Q&A
We begin today's email by going over one of the common questions that I received this week regarding Apple's music ambitions: "Why should Apple care about owning the music industry?" We discuss how Apple thinks about music and why the company is dedicating resources and time to the endeavor. The email then turns to new Spotify subscriber numbers and evidence that the company is moving the goalposts when it comes to disclosing "paid" subscribers. This has implications when it comes to comparing Apple Music to Spotify. We conclude with Thursday Q&A (questions from Above Avalon members). This week's questions:
- Why aren't there any Apple Watch leaks?
- Is Tim Cook being conservative with his claim that Apple Watch sales will trend like iPod with sales centered around the holidays?
- Do you think Tesla's Autopilot should be recalled given the growing number of incidents?
- When do you write these daily updates?
These stories are available for Above Avalon members. To continue reading, click here.
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Measuring Apple's Music Ambitions; Pokémon GO, Nintendo, and Wearables
Today's Above Avalon stories:
- Measuring Apple's Music Ambitions
- Pokémon GO, Nintendo, and Wearables
We begin today's email by continuing the discussion found in my article, "Apple's Plan to Own the Entire Music Industry." Specifically, we assess Apple's odds of success in eventually capturing music streaming revenue share and grabbing most of the power in the music industry. The email then turns to one of the more intriguing discussion topics coming from the Pokémon GO phenomenon (which we discussed in detail in Monday's daily update). We discuss Nintendo's $35 Pokémon GO wristband and my thoughts on what it may mean for the broader wrist wearables industry. There is more intrigue with the product than what meets the eye.
These stories are available for Above Avalon members. To continue reading, click here.
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Google Smartwatches, Slipping Mac Shipments, Problematic iPhone Customer Surveys
Today's Above Avalon stories:
- Google Smartwatches
- Slipping Mac Shipments
- Problematic iPhone Customer Surveys
We kick off today's email with a closer look at reports that Google is planning on launching its own smartwatches. After going over some background on the wearables market, we discuss why Google feels such a move is needed and my thoughts on the company's prospects. The email then turns to the latest Gartner and IDC PC data, which points to another weak quarter for Mac sales. After going over the most likely reason for the weakness, we discuss why it is premature to write off future Mac unit sales growth. We conclude with thoughts on why I think customer purchase intention surveys dealing with iPhone upgrades have lost much of their value.
These stories are available for Above Avalon members. To continue reading, click here.
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Strategy Clues Hidden in WatchOS 3, Thoughts on Third-Party Apple Watch Faces, Pokémon GO and the Art of Going Viral
Today's Above Avalon stories:
- Strategy Clues Hidden in WatchOS 3
- Thoughts on Third-Party Apple Watch Faces
- Pokémon GO and the Art of Going Viral
We begin today's email with a closer look at Apple's "What's New in watchOS 3" session at WWDC. I had a number of observations regarding Apple's broader Watch strategy from reading in between the lines. The email then shifts to a few thoughts I have on the probability that we eventually see third-party Apple Watch faces. We conclude with a deep dive into the Pokémon Go phenomenon and a very simple observation when it comes to Apple.
These stories are available for Above Avalon members. To continue reading, click here.
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Snapchat Memories Hint at Strategy Shift, Snapchat Camera Roll vs. iPhone Camera Roll, Elon Musk Is Becoming More Brazen
Today's Above Avalon stories:
- Snapchat Memories Hint at Strategy Shift
- Snapchat Camera Roll vs. iPhone Camera Roll
- Elon Musk Is Becoming More Brazen
We kick off today's email by going over Snapchat's new Memories product. Snapchat is an interesting company to watch from Apple's perspective when discussing the competitive landscape and product strategies. After taking a closer look at Snapchat Memories, we go over why the product is a sign of shifting Snapchat strategy. We then compare Snapchat's new camera roll with the iPhone's Camera Roll. Should Apple be concerned about Snapchat going after the iPhone Camera and Photos apps? We conclude with my thoughts on how Elon Musk is becoming more brazen over the past few months and why I think Apple is the root cause.
These stories are available for Above Avalon members. To continue reading, click here.
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Tesla's First Autopilot Fatality, Apple Will "Retire" the 16GB iPhone
Today's Above Avalon stories:
- Tesla's First Autopilot Fatality
- Apple Will "Retire" the 16GB iPhone
We begin today's email by taking a closer look at the first fatality involving Tesla's Autopilot technology. After going over the two types of reactions to the news, we discuss the primary questions raised by the incident and my view of how this situation will play itself out. The email then shifts to news that Apple will no longer position 16GB as the entry-level iPhone storage tier this fall. We go over the strategy behind Apple's storage tier configuration and my thoughts on Apple possibly having a few surprises in store when it comes to storage options across the iPhone lineup.
These stories are available for Above Avalon members. To continue reading, click here.
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Apple In Talks to Buy Tidal, Jay Z's Importance to Apple Music, Calculating Tidal's Potential Price Tag
Today's Above Avalon stories:
- Apple In Talks to Buy Tidal
- Jay Z's Importance to Apple Music
- Calculating Tidal's Potential Price Tag
We kick off today's email by discussing reports that Apple is in preliminary talks to buy Tidal, Jay Z's music streaming service. We first look at the news from Apple's perspective by going over Apple's views on music streaming dating back to its Beats acquisition. We then look at the potential deal from Tidal's perspective. After going over the single reason Apple would buy Tidal, we take a deep dive into why Jay Z would represent a crucial asset for Apple Music. The email then turns to how I am thinking about valuing Tidal in an Apple acquisition scenario.
These stories are available for Above Avalon members. To continue reading, click here.
Become an Above Avalon member to read today's stories and receive future stories in a daily email containing 2-3 stories (10-12 stories/week). You can use the payment forms/links below to sign up ($20/month or $200/year). For more information on membership, click here.