Wall Street’s Muted Reaction to Project Titan, Where Does CarPlay Stand?, Apple’s Growth Prospects
Hello everyone. Happy Leap Day.
There are a few follow-ups to yesterday’s Project Titan discussion. We will begin with Wall Street’s reaction to Apple halting Project Titan. Our attention will then turn to Apple CarPlay and Apple’s remaining growth prospects.
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Apple Raises Prices for TV+, Arcade, and News+, EU to Ban Apple’s Carbon Neutral Marketing, GM Pulls Back on EVs
Happy Wednesday.
We will take a breather from earnings to cover some Apple news and two stories that sparked my interest. The update kicks off with Neil’s thoughts on Apple raising prices for Apple TV+, Apple Arcade, and Apple News+. We then turn to criticism being thrown at Apple’s environmental efforts. The update concludes with a look at GM pulling back on its EV sales targets.
Apple Raises Prices for TV+, Arcade, and News+
Earlier today, Apple raised prices for three of its content distribution services:
Apple TV+: $10 per month (was $7)
Apple Arcade: $7 per month (was $5)
Apple News+: $13 per month (was $10)
Apple Bundle One prices went up accordingly so that roughly the same percentage of savings remained. Consumers will now see a big $27/month savings with Premier.
Some thoughts:
These are aggressive price hikes for Apple, partially driven by having never increased Apple Arcade or Apple News+ prices.
The Apple TV+ price increase follows a $2/month increase last October. Apple has now doubled Apple TV+ pricing in 12 months. It’s fair to assume some of this is due to Apple believing that they could raise the price (sub figures are likely doing fine). In addition, Apple’s content budget continues to increase both due to doing more and cost inflation. We don’t see a Netflix-like leveling of content spend from Apple. While Apple doesn’t need to turn a profit with Apple TV+, they don’t want it to turn into a financial drain either. All-in-all, consumers will likely be OK with this increase given the growing amount of content found on the service. Also, this is being done ahead of what will be a handful of blockbuster films with a ton of buzz becoming available on TV+. Those films alone would be worth $100+ in movie ticket dollars to the average family. In addition, the higher and quicker Apple TV+ pricing goes, the more likely Apple will launch a lower-priced ad-supported tier.
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Apple's WWDC 2022 (Daily Updates Recap)
Earlier this month, I flew out to Cupertino to attend Apple’s in-person WWDC event.
The best way of describing the event at Apple Park was Apple getting back into the swing of hosting in-person events. Excluding the masks and hand sanitizer stations, it felt like a usual in-person Apple event. There was a waiting area for press, hundreds of Apple Retail greeters with an infectiously-positive mood, and a product demo area for the media following the keynote.
My estimate is there were 200 to 250 members of the press and media in attendance, including some international press. That’s a smaller crowd that usual. As for developers, there were approximately 1,000. In terms of Apple employees, my best count was that 2,000, possibly even as many as 2,500, watched the keynote.
The event also served as Apple’s first “open house” for its massive circular ring building at Apple Park. All prior Apple Park events for the press took place at Steve Jobs Theater which is located on the other side of Apple Park. For those events, Apple was careful not to have any visitors stray to other parts of the campus.
The Ring at Apple Park (Above Avalon)
The keynote viewing area, as shown below, was intelligently thought out. Apple opened the giant glass walls found in the employee cafeteria to create an indoor / outdoor venue. This served as an adequate solution for getting a lot of people out of the sun. As for those who were baking in the sun, they were given more comfortable, beach-style chairs in return. For the first time, the best seats in the house at an Apple keynote were in the middle of the audience, seated in the shade.
Inside The Ring at Apple Park (Above Avalon)
Interestingly, Apple began airing the taped keynote three minutes earlier than the public streaming. The delay seemed intentional, possibly as a way to encourage live blogging / tweeting since there didn’t seem to be any other reason for starting it early. The largest screen that Apple relied on to show the presentation was shockingly good – the clearest big screen I have ever come across, while the sound system made it seem like I was in an indoor event.
As for why Apple went through the trouble of having ~1,000 developers come on campus despite having an all-virtual WWDC with labs and sessions occurring online, the company missed the community aspect that had become a WWDC tradition. There are clear benefits found with having a virtual WWDC, such as a significant increase in accessibility. However, the face-to-face interactions and social elements that developers experience have been sorely missed the past two years.
My suspicion is that Apple will rely on the event structure again, including in September with the upcoming product event. Apple likely hopes it will be able to host the event inside Steve Jobs Theater. All-in-all, the format worked well, with meticulous planning and preparation throughout. Apple has gotten really good at putting on these massive events. More importantly, an event structure reminiscent of a movie premiere offers a good combination of virtual benefits such as the well-polished taped presentation with animated transitions that can never be replicated in real time and in-person perks like a product demo area.
An Ecosystem Event
WWDC is all about software updates with new hardware sprinkled in from time to time. As Tim Cook put it when concluding the keynote: “[W]e pushed our software platforms forward in some incredible new ways. Introducing features and capabilities that will enable our developers to do amazing work and provide our users with exciting new experiences."
A different way of thinking about WWDC is that it’s Apple’s annual ecosystem event – the one time each year when Apple shows how it is pushing its entire ecosystem forward.
An Above Avalon membership is required to continue reading this article. Members can read the full article here.
The full article includes the following sections:
Attending the Event
An Ecosystem Event
iOS 16 Takeaways
The New MacBook Air
The iPadOS vs. macOS Debate
The Big Surprise Found With Apple Pay Later
Revisiting Apple’s Credit Kudos Acquisition
CarPlay Mistruths
My Full Notes from the Keynote
Winners and Losers From WWDC 2022
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