Looking Ahead at Apple’s 2025
Hello everyone. It feels good to get back into the swing of things. We will kick off the 10th year of this newsletter with a look ahead at Apple in 2025. There are a few things that have been on my mind. The discussion will likely flow into tomorrow’s update as well.
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Apple Year in Review 2024
Turning to today’s update, we will go over my thoughts regarding Apple’s 2024. Our focus won’t be on what Apple should do in 2025 and beyond. We can tackle that topic in the new year.
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Google’s Veo 2 Is a Litmus Test, Blackmagic Debuts Camera for Vision Pro, Apple Sports App Update
We begin today’s update with my thoughts on how Google’s Veo 2 is a litmus test. The discussion then turns to good news on the Apple Immersive Video front. We conclude with a quick look at Apple’s Sports app.
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Thinking Through Headset / AR Glasses Competition and Landscape
Following the Dec 16th update regarding Google/Samsung partnership news, today’s update will be focused on the competitive landscape facing headsets and AR glasses. There are a number of moving parts. Let's jump right in.
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Google “Unveils” Android XR, Samsung “Unveils” First Mixed Reality Headset, Everyone Is Copying Apple
For today’s update, we will discuss Android XR and Samsung’s new Android XR headset. The discussion will roll over into tomorrow’s update as well.
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Apple Releases Second Wave of Apple Intelligence, My Initial Thoughts on Visual Intelligence, Image Playground Beats Expectations
With iOS 18.2, iPadOS 18.2, and macOS Sequoia 15.2 now out, the second wave of Apple Intelligence features has gone live for the U.S. and localized English for Australia, Canada, Ireland, New Zealand, South Africa, and the UK.
For many Apple users with supported hardware, this second wave will be the one that truly showcases Apple Intelligence. While Writing Tools and things like notification summaries may have their audiences, this second release phase includes Image Playground, Genmoji, Image Wand, visual intelligence, and ChatGPT integration, among other features.
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Spotify 3Q24 Earnings, Disney 4Q24 Earnings
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Apple Places Retail Bet on Saudi Arabia, Vision Pro Wins Innovation of the Year Award, Vision Pro and Watching “TV”
Today's Above Avalon Daily email contains the following stories:
Apple Places Retail Bet on Saudi Arabia
Vision Pro Wins Innovation of the Year Award
Vision Pro and Watching “TV”
Happy Tuesday. Information regarding Above Avalon Gifts 2024 has been posted to AboveAvalon.com at this page. Thank you to those of you who have already purchased a gift or reached out for more information.
We begin today’s update with news that Apple will bring its direct retail apparatus to Saudi Arabia. The discussion goes over the various implications associated with the move. We then turn to Apple Vision Pro, which Popular Science just named as the innovation of the year. The update concludes with a closer look at how Apple Vision Pro stands to change “TV” watching.
Let's jump into today's update.
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Apple’s Modem Launch Reportedly Nears, Apple vs. Qualcomm, Apple’s Modem Goals
Hello everyone.
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Let's jump into today's update.
Apple’s Modem Launch Reportedly Nears
Over at Bloomberg, here’s Mark Gurman:
“Apple Inc. is preparing to finally bring one of its most ambitious projects to market: a series of cellular modem chips that will replace components from longtime partner — and adversary — Qualcomm Inc.
More than half a decade in the making, Apple’s in-house modem system will debut next spring, according to people familiar with the matter. The technology is slated to be part of the iPhone SE, the company’s entry-level smartphone, which will be updated next year for the first time since 2022.
A modem is a critical piece of any mobile phone, letting the device connect to cell towers in order to make calls and link up with the internet. Apple’s first version of the component will be followed by further generations that become increasingly more advanced. The company aims to ultimately overtake Qualcomm’s technology by 2027, said the people, who asked not to be identified because the project is confidential.”
This was quite the detailed piece from Gurman. Given employee turnover and churn, it’s possible that Gurman was able to cull intel from former employees who worked on the relevant teams.
The basic strategy telegraphed by Gurman is that Apple will follow a multi-year modem rollout that is meant to derisk the shift away from Qualcomm.
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Jeff Bezos Focusing On AI at Amazon, Sundar Pichai Talks Woke Culture
Hello everyone.
Over the past nine and half years of daily updates, we have only talked about an interview that took place at the NYT Dealbook Summit in NYC once – in 2021 when Tim Cook (virtually) spoke. This year, Jeff Bezos and Sundar Pichai sat for interviews with Andrew Ross Sorkin. We will talk about both interviews in greater detail.
When it comes to this conference, personalities (Andrew Ross Sorkin) trump the organization (The New York Times) hosting the event. This plays a big role in explaining why companies that don’t receive fair treatment in news coverage by the NYT still participate in a conference put on by the NYT. My stance would be that Big Tech companies should give both the NYT and their conferences the cold shoulder but that’s me.
Let’s jump in.
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A Deep Dive Into Tim Cook’s “Big” Interview With Steven Levy
Steven Levy, writing for WIRED, is out with a comprehensive interview with Tim Cook. Levy has been covering Apple for decades. He was one of the original iPhone reviewers in 2007. Today’s update will be dedicated to discussing the interview.
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AAPL Hits All-Time High, AAPL Valuation Metrics, Observations on Big Tech Valuation
We begin today’s update with my thoughts on AAPL shares hitting all-time highs. The discussion will then turn to an examination of AAPL valuation metrics (forward P/E, EV/FCF, and free cash flow yield). In addition to looking at Apple’s valuation metrics, there is value found in taking a broader look at how Big Tech is trading from a valuation perspective. We will keep our focus to free cash flow / enterprise value. While there may not be one gold standard valuation metric that all market participants prioritize, free cash flow remains my go-to metric. The data removes much of the noise that is found with income statement line items.
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Apple’s 2024 Holiday Ad Goes Viral, Elon Musk Warming to Apple?
Hello everyone. It feels good to be back into the full swing of things. Given the way the calendar falls this year, we only have three weeks of updates remaining in 2024. It feels like those three weeks are going to fly by.
Above Avalon Gifts 2024 will launch next week. This is the one time each year that you can select from a variety of options for gifting an Above Avalon membership to someone and have them be notified of the gift on a date of your choosing (i.e. December 24th or 25th). For this year, the gift window will be open for two weeks starting on December 9th. Stay tuned for more information on that front.
Let’s jump right in.
Apple’s 2024 Holiday Ad Goes Viral
In what has become an annual tradition, Apple released its holiday video ad depicting how technology can positively impact our lives.
Over the years, some of the most memorable Apple holiday ads have involved children and teens using Apple to create (digital) gifts for their families. The 2013 ad may jump out at some of you – the one with what looked like disinterested teenager who was actually secretly recording a family video.
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Tim Cook in China for Third Time This Year, Trump Threatens 10% China Tariffs, Amazon Invests Another $4B in Anthropic
We kick off today’s update with my thoughts on Tim Cook’s third visit to China in 2024 and what appears to be political maneuvering and massaging tied to President Trump winning a second term. The discussion then turns to Trump threatening a 10% tariff put on Chinese goods. We conclude the update with Amazon putting more money in Anthropic.
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DOJ Provides Proposed Remedies for Google Antitrust, Indonesia Goes After Apple, Apple Selling Ads Directly on Apple News
We begin today’s update with my thoughts on the U.S. Department of Justice’s proposed remedies for the Court to consider in its case against Google. The discussion then turns to Apple and Indonesia going back-and-forth on investment negotiations. The update concludes with Apple’s ads push on Apple News.
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Amazon Unveils New Echo Shows, The Smart Home, Apple Stationary Display Rumors
Today’s update will contain some good old-fashioned product strategy talk. We will begin with Amazon, then shift more broadly to the smart home, concluding with my thoughts on some Apple product rumors.
Let’s jump right in.
Amazon Unveils New Echo Shows
Given reports that a revamped Alexa has been pushed off to 2025, Amazon continues to move forward with sporadic hardware releases. The latest release: updated and new stationary smart displays for the home.
In a press release issued yesterday, here’s Amazon:
"When we first added a screen to Echo devices, it changed the way customers interacted with Alexa, combining voice capabilities with glanceable information, to easily view things like the family calendar, reminders, trending news stories, and family photos. Customers particularly loved these devices for household organization and streaming video content. This inspired us to create an entirely new type of smart display with Echo Show 15—a beautiful wall-mountable ambient device that fits in naturally with any home décor and elevated what customers enjoy most about Echo Show and Fire TV.
The response was great—Echo Show 15 has a global star rating of 4.5 on Amazon—but customers told us they wanted better audio quality, and a larger screen to deliver an enhanced entertainment experience and provide even more room to see important information at a glance. So today, we’re upgrading Echo Show 15 and introducing Echo Show 21, our largest Echo Show yet, with nearly double the viewing area of Echo Show 15.”
The 15.6-inch Show 15 ($300) and 21-inch Show 21 ($400) come with wall mounting equipment (wall mount, screws, and anchors). Light brown or white frame accessories that snap on and off are available for $35. A stand for kitchen counters can also be purchased for $100.
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Apple Releases Apple Intelligence Ads, The Controversy Surrounding the Ads, My Verdict
Hello everyone. We are going to shift back to talking product. Today’s update will be focused on Apple Intelligence ads, some of which are causing quite the stir online. The tentative plan for tomorrow is that we will talk screens in the home.
Let’s jump into today’s update.
Apple Releases Apple Intelligence Ads
Over the past two months, Apple has released seven ads for Apple Intelligence.
The first tranche of ads, with actress Bella Ramsey from “Game of Thrones” and “The Last of Us,” came out at the end of September. The ads were from Apple’s ad agency TBWA\Media Arts Lab.
1) iPhone 16 Pro - Email summary. Bella uses email summary to quickly go over an email pitch from her agent that she forgot to look at. The copy attached to the video ad on YouTube includes: “Tap to reveal a summary of a long email in the Mail app and cut to the chase. You can also view summaries of emails right from your inbox.” The video has 5.2M views on YouTube (10K up votes).
2) iPhone 16 Pro - Custom memory movies. Bella helps a Dad trying to eulogize his daughter’s pet fish buried in the backyard by creating a memory movie using photos of the daughter with the fish. “Create a custom memory movie by entering a description in Photos, and Apple Intelligence will find the best photos and videos to craft a storyline with its own narrative arc.” 320K views on YouTube (9K up votes).
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Microsoft 3Q24 Earnings, Amazon 3Q24 Earnings
Hello everyone.
In today’s update, we will go over Microsoft and Amazon earnings. We will modify our earnings review methodology a little bit to make it possible to cover both in the same update.
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Meta 3Q24 Earnings, Three Takeaways From Meta’s 3Q24 Numbers, Three Takeaways From Meta’s 3Q24 Earnings Calls
Hello everyone. We will continue our Big Tech CY3Q24 earnings reviews with Meta. We will first go over my big picture overview. The discussion will then turn to over my takeaways from the earnings release and earnings conference call(s).
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Alphabet 3Q24 Earnings, Three Takeaways from Alphabet’s 3Q24 Numbers, Three Takeaways from Alphabet’s 3Q24 Earnings Call
Hello everyone.
We are going to try something new with Big Tech 3Q24 earnings reviews. After going over a very big picture overview of what each company reported, we will then discuss three takeaways from the numbers (i.e. the earnings release) and then three takeaways from the earnings conference call. Those call takeaways will probably end up having a more qualitative feel to them. A goal found with this approach is to emphasize the most important items from earnings versus just going through a running collection of observations with varying degrees of importance. We will see how this new format goes. Today’s update will be focused on Alphabet’s earnings.
One quick update to yesterday’s discussion. The following was mentioned:
“It's certainly possible that Apple’s top shareholders don’t mind the current dividend payout ratio and aren’t clamoring for Apple to pay a higher payout as it means they would be paying more in tax (there’s no tax associated directly with share buyback).”
Thank you to member Ravi for reaching out via email to remind me that there is a new 1% excise tax facing share buyback. While my commentary was strictly about taxes facing shareholders (there is no direct tax impact on shareholders related to buyback), Apple is liable for the 1% excise tax. At 1%, the tax is not significant enough to sway strategy or capital return preference.
Let’s jump into today’s update.
Alphabet 3Q24 Earnings
Here’s Alphabet and Google CEO Sundar Pichai kicking off Alphabet’s 3Q24 earnings release:
“The momentum across the company is extraordinary. Our commitment to innovation, as well as our long-term focus and investment in AI, are paying off with consumers and partners benefiting from our AI tools.
In Search, our new AI features are expanding what people can search for and how they search for it. In Cloud, our AI solutions are helping drive deeper product adoption with existing customers, attract new customers and win larger deals. And YouTube’s total ads and subscription revenues surpassed $50 billion over the past four quarters for the first time.
We generated strong revenue growth in the quarter, and our ongoing efforts to improve efficiency helped deliver improved margins. I’m looking forward to driving more advances for consumers, customers and creators globally.”
Based on Pichai’s standards, that’s bullish commentary. One senses a little bit of “watch me now” tone in his comments as well. In some tech circles,
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