Spotify’s Stream On Event, Humane Raises Another $100M, What Is Humane Working On? (Daily Update)
Today’s update kicks off with Neil’s thoughts on Spotify’’s Steam On event in LA. We go over why Neil thinks there is an opening for Apple Music to win share against Spotify in countries where the two services go head-to-head. The update then turns to Humane. We go over why the company is grabbing so much buzz and what the company is likely working on.
Hello everyone. Happy Thursday. Apple announced it will launch its standalone classical music app on March 28th. We will likely talk about the app next week.
Spotify’s Stream On Event
Yesterday, Spotify held an event in LA aimed at creators (music and podcasts). The company had various content creators, including some YouTubers, go on stage to talk about why Spotify is the place to be. The main message was that Spotify cares about creators and the company wants musicians and podcasters to call Spotify home.
Spotify founder and CEO Daniel Ek kicked off the hour-and-a-half presentation by saying how the music industry is doing great with streaming. He's right when it comes to music rights holders. However, music artists? Not so much.
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Apple’s Spring Product Refresh, The Best-Selling Smartphone Models of 2022, Dark Sky Anger Builds (Daily Update)
Hello everyone. Today’s update kicks off with Neil’s thoughts on Apple’s spring product refresh announced yesterday. The discussions then turns to new estimates from Counterpoint regarding the best-selling smartphones in 2022. We conclude with a look at the controversy surrounding Apple’s decision to sunset the Dark Sky weather app.
Let's jump right into today's update.
Apple’s Spring Product Refresh
Yesterday, Apple unveiled a number of new products / SKUs. In addition to a new yellow color finish for the iPhone 14 and 14 Plus, Apple unveiled four new Silicon Case colors, nearly two dozen new Apple Watch bands, and a handful of AirTag accessories.
As for the yellow iPhone, one can say Apple has had some experience with the color yellow.
These updates are minor when compared to Apple launching entirely new iPhones or product categories. However, we should not underestimate the impact that refreshed color options and accessories can have on both product sales and Apple’s overall business.
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Number of ATMs Decline, Apple Pay’s Long Game, Roku 4Q22 Earnings (Daily Update)
Hello everyone. Today’s update (Tuesday, March 7th) kicks off with Neil’s thoughts on the number of ATMs declining in the U.S. The discussion goes over cash usage trends and includes some of Neil’s personal observations and behavior change regarding cash use. There are takeaways involving Apple Pay and long-term payment trends. The update concludes with a look at Roku’s 4Q22 earnings.
Number of ATMs Decline
With an article that grabbed my interest yesterday, here is the WSJ:
“The slow move toward a cashless society is helping to send the ubiquitous ATM into decline around the U.S., presenting challenges for those who still largely rely on cash.
After peaking at 470,000 ATMs in the U.S. in 2019, the number of machines has declined annually over the past few years to 451,500 at the end of 2022, according to data tracked by research firm Euromonitor International. The reason: Many people quit using cash during the pandemic and haven’t gone back, said Kendrick Sands, consumer finance research manager for the London-based firm.
‘There was that scare that the virus was transmitted by paper, plus the trend of just buying everything online,’ said Mr. Sands, who is based in Chicago. ‘That dealt almost a death blow to cash, especially for younger people.’
Cash and checks are forecast to fall to 14% of total payments this year from 42% in 2010, with the most precipitous drop coming just after the pandemic started in 2020, according to Euromonitor estimates.”
In what was news to me, the number of ATMs in use is something that firms need to estimate and project. While the Federal Reserve publishes various statistics and data points regarding currency use, there does not appear to be a central database for the number of ATMs in use.
Accordingly, it shouldn’t have been much surprise that the ATM trade association is questioning Euromonitor International’s figures showing a decline in both the number of ATMs and cash usage saying that cash “is still the payment method of choice for in-person transactions of $25 or less.” That statement doesn’t take anything away from the assertions found in the WSJ’s article.
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Apple Invests Another $1B in Germany, The Factors Behind iPhone’s Increasing Sales Share, Competing With Cool (Daily Update)
Hello everyone. Welcome to a new week. Today’s update (Monday, March 6th) kicks off with Neil’s thoughts on Apple investing another $1B in Germany. The update then turns to the iPhone, which continues to see higher sales share around the world. We look at the factors behind the iPhone’s momentum. In particular, we address the idea of the iPhone seeing inroads with younger demographics outside the U.S. and the role Apple’s brand has with giving the company an advantage over its competitors.
Let's jump right with a news item from Apple.
Apple Invests Another $1B in Germany
In a press release issued late Thursday, here’s Apple:
“Apple today announced it will invest an additional 1 billion euros in German engineering over the next six years as part of its Silicon Design Centre expansion in central Munich. This is on top of the company’s previous 1 billion euro investment commitment from 2021, when Apple established Munich as the headquarters to its new European Silicon Design Centre. Munich is already Apple’s largest engineering hub in Europe, and the engineering teams there are integral to the new innovations that delight Apple customers around the globe.
‘Our Munich engineering teams are on the cutting edge of innovation, helping imagine new technologies at the heart of the products we make,’ said Tim Cook, Apple’s CEO. ‘Apple has been in Munich for more than 40 years, and we’ve never been more excited about what the future holds here.’
Building on Apple’s longstanding presence in Germany and growing investments across Europe, the company will design and construct a state-of-the-art research facility at Seidlstrasse. With significant lab space, cutting-edge design, and a central location, the space will enable Apple’s R&D teams to come together in new ways, enhancing collaboration and innovation.”
Apple released the following drawing of where the new buildings will be located in Munich.
The building names are based on the street names. Karlstrasse is part of Apple’s initial $1B investment announced in early 2021. Seidlstrasse, Denisstrasse, and Marsstrasse represent new buildings that will comprise Apple's hub.
Europe / Israel continues to be a major source of hardware and related technologies R&D for Apple.
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Peter Stern Departs Apple, Apple’s Services Reorganization, My Concern With Warner Bros. Discovery (Daily Update)
Hello everyone. Today’s update kicks off with Neil’s thoughts on Peter Stern departing Apple. The discussion then expands to talk about Apple’s Services reorganization. We conclude with some qualutiative takeaways from Warner Bros. Discovery’s most recent earnings call. Neil has a concern with the company’s strategy. Let's jump right in.
Peter Stern Departs Apple
In an article published back in January, here’s Claire Atkinson over at the Insider:
“One of Apple's top subscriptions executives is exiting the company.
Peter Stern, who had been helping establish Apple's presence in sports rights in addition to running Apple TV+, has informed colleagues that he is exiting Apple to spend more time on the East Coast, according to a source close to the executive. Stern, whose title is VP Services, is leaving at the end of the month.
Apple is reorganizing its Services unit, and Stern's responsibilities will be split into three separate divisions, according to two people familiar with internal conversations at Apple. The shape of the restructure is still being negotiated, but one of those executives will be Oliver Schusser, who is currently in charge of Apple Music; another is Robert Kondrk, whose current title is VP, Apple Product Services and Design.
Stern, who was widely tipped as a possible successor to Apple's SVP Services, Eddy Cue, was in charge of a broad swath of the company's subscription businesses and was largely responsible for building the business operations of Apple TV+. He is one of about 20 direct reports under Cue.
During his six-year tenure at Apple, Stern helped build subscription products such as Arcade, Books, and Apple One, News+, Fitness+, iCloud+. Before that, he was an exec Tim Warner Cable.”
We will talk about Apple’s Services reorganization shortly.
It’s not clear where the “widely tipped as a possible successor to Apple’s SVP Services, Eddy Cue…” comes from. Yes, Stern was a VP and Apple made him available to speak to outsiders/press. However, claiming Stern was some kind of de facto Cue successor feels off.
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Apple Lends $250M to Globalstar, Why Doesn’t Apple Get Into Satellites?, EU Narrows Apple Probe (Daily Update)
Hello everyone. Today’s update kicks off with Neil’s thoughts on Apple lending $250M to Globalstar. The discussion then expands to talk about Apple getting into the satellite business itself. We conclude with a closer look at the EU narrowing its Apple probe to focus on anti-steering.
Let’s jump right into today’s update.
Apple Lends $250M to Globalstar
Over at SpaceNews, here’s Jason Rainbow:
“Globalstar said Feb. 28 that Apple is lending the company $252 million to help cover upfront costs for replenishing its low Earth orbit (LEO) constellation.
Apple is providing the funds as a prepayment for using the network to upgrade satellite services launched last year for its latest iPhone, which can connect with one of Globalstar’s existing 24 satellites in LEO for emergency services outside cellular coverage.
Globalstar picked MDA and Rocket Lab in February 2022 to supply an initial 17 satellites for launch by the end of 2025 in a contract worth $327 million. The contract includes an option for up to nine additional satellites at $11.4 million each.
The satellite operator intends to fund any upfront costs not covered by Apple’s prepayment with its own cash.
Apple has already agreed to reimburse Globalstar for 95% of the constellation; however, it previously required the satellite operator first to raise third-party financing to fund the manufacturing contract.
Removing the need to raise this financing amid challenging macroeconomic conditions clears a significant degree of uncertainty for Globalstar’s constellation plans.”
With interest rates continuing to rise and prospects of securing third-party financing getting dim, Globalstar was in trouble. Apple decided to jump in and loan Globalstar the required cash to keep moving forward (to construct and deploy satellites for Apple). The use of “decided” may be charitable as Apple probably didn’t have much choice other than to step in and bail Globalstar out. Without the loan, Globalstar may not have been able to launch the satellites that Apple needs.
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Sonos FY1Q23 Earnings, Sonos Hints Again at Entering New Product Category, Sonos vs. Big Tech (Above Avalon Daily)
Hello everyone.
Today’s update has a Sonos focus. We begin with Neil’s thoughts on Sonos FY1Q23 earnings (October to December). The discussion then turns to Sonos management once again hinting at the company entering a new product category. We discuss what that product category likely is and the challenges facing Sonos. The update concludes by examining a Sonos comment regarding Big Tech not doing a whole lot in the speaker space.
Sonos FY1Q23 Earnings
Back on February 8th, Sonos reported FY1Q23 earnings (covering October to December).
Revenue was up 1% (7% excluding currency impact) with speaker unit sales up 4% (to 2.5M). Sonos speaker demand was driven by promotional activity. Management called out sales around sets (more than one speaker) as being especially effective with promotions. Sonos talked about speaker share gains. It would not be surprising to find out those gains are coming against Amazon, Google, and traditional speaker companies (Bose, Samsung/Harman, Sony).
Here is Sonos speaker sales on a TTM basis to remove the seasonality associated with the holidays:
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The WSJ on iPhone’s Security “Vulnerability," Thoughts on the WSJ’s Article/Video, Apple Watch and iPhone Security (Daily Update)
We kick things off with a closer look at the WSJ’s article regarding a growing problem with iPhone security and passcodes. The discussion goes over Neil’s thoughts on how the WSJ covered the story and the publication’s recommendations to readers for safeguarding themselves. We also look at some major holes in the WSJ’s coverage and argument, including the absence of Apple Watch from the discussion.
Hello everyone. Welcome to a new week. We have mostly wrapped up our earnings reviews. There are a few companies that remain on my watch list – such as Sonos and Warner Bros. Discovery. For today’s update, we will focus on a WSJ story published late last week.
The WSJ on iPhone’s Security “Vulnerability”
Over at the WSJ, here are Joanna Stern and Nicole Nguyen:
“In the early hours of Thanksgiving weekend, Reyhan Ayas was leaving a bar in Midtown Manhattan when a man she had just met snatched her iPhone 13 Pro Max.
Within a few minutes, the 31-year-old, a senior economist at a workforce intelligence startup, could no longer get into her Apple account and all the stuff attached to it, including photos, contacts and notes. Over the next 24 hours, she said, about $10,000 vanished from her bank account.
Similar stories are piling up in police stations around the country. Using a remarkably low-tech trick, thieves watch iPhone owners tap their passcodes, then steal their targets’ phones—and their digital lives.
The thieves are exploiting a simple vulnerability in the software design of over one billion iPhones active globally. It centers on the passcode, the short string of numbers that grants access to a device; and passwords, generally longer alphanumeric combinations that serve as the logins for different accounts.”
This story spread like wildfire on social media. The WSJ put it on the front page of the weekend edition.
According to the WSJ, Apple has not done enough to protect iPhone users from passcode theft.
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Netflix Slashes Pricing in Dozens of Countries, YouTube’s Market Positioning (Daily Update)
Hello everyone. We begin with Neil’s thoughts on Netflix cutting prices in more than 100 territories. It is quite the surprising development. The discussion then turns to YouTube and where the streaming service sits in the broader video streaming industry. Will YouTube’s market positioning shift with the company moving deeper into paid video? Will YouTube run into user resistance as it looks to evolve beyond being a source of free, ad-supported content?
Let’s jump right in.
Netflix Slashes Pricing in Dozens of Countries
A long-term trend in paid video streaming has been higher pricing. We can go so far as to say price increases were the big trend in 2022 as companies prioritized revenue and profitability.
As a sign of how the streaming industry is far from settled, Netflix is trying something new in 2023. Here’s the WSJ:
“Netflix Inc. has reduced the cost of its service in more than three dozen countries in recent weeks, as it tries to appeal to customers around the world who have an ever-growing list of streaming options.
The streaming company’s recent price cuts span Middle Eastern countries including Yemen, Jordan, Libya and Iran; sub-Saharan African markets including Kenya; and European countries such as Croatia, Slovenia and Bulgaria.
In Latin America, nations including Nicaragua, Ecuador, and Venezuela have seen reductions in subscription costs, as have parts of Asia including Malaysia, Indonesia, Thailand and the Philippines.
The cuts apply to certain tiers of Netflix in those markets—in some cases halving the cost of a subscription.”
This is a surprising development. It is the opposite of what Netflix management talked about on its most recent earnings call. While management teams are not obliged to follow product strategy discussed on earnings calls, the breadth and magnitude of these price cuts strongly support the view of a strategy shift being in play.
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Consumers Spending Less on Electronics, Impact on Apple, Swiss Watch Sales Data for 2022 (Daily Update)
Hello everyone. Happy Wednesday. It feels good to get back into the swing of things after a little time off.
We kick off today’s update with Neil’s thoughts on Walmart and Home Depot pointing to major shifts in how consumers are spending their money. We look specifically at the impact the trend will have on Apple. The update concludes with an examination of Swiss watch industry sales for 2022 and why Neil thinks Apple Watch continues to impact the Swiss.
Consumers Spending Less on Electronics
Earlier today, a WSJ article with the headline “Walmart, Home Depot Give Cautious Outlook as Shoppers Spend More on Basics,” jumped out at me. Here’s Sarah Nassauer:
“Consumers are spending more on food and less on electronics, apparel and home improvements as inflation and changing habits zap demand for many goods, two of the country’s largest retailers reported Tuesday.
Walmart Inc. and Home Depot Inc. have enjoyed robust sales for much of the past two years as people looked for bargains or fixed up their homes. Now more of shoppers’ budgets are going to higher-priced groceries and travel, executives said.
For Home Depot, which primarily sells home-improvement goods, that dynamic meant flat sales in the most recent quarter. For Walmart, which relies on groceries for the majority of its sales, it meant larger-than-expected sales growth. But executives from both companies said consumers’ spending habits pressured profits and they gave muted outlooks for the rest of the year amid economic uncertainty.
‘Customers are still spending money,’ said Walmart Chief Executive Doug McMillon. ‘It’s obviously not as clear to us what the back half of the year looks like.’”
The following slide from Walmart’s earnings release serves as a helpful summary of what the largest retailer is seeing:
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Alphabet FY4Q22 Earnings, The Subscription War, Peloton FY2Q23 Earnings (Daily Update)
Hello everyone. We kick off today’s update with Neil’s thoughts on Alphabet’s earnings. The discussion also goes over an observation regarding the changing competitive landscaping involving Google, Amazon, and Apple. We then examine Peloton’s earnings. Let’s jump right in.
An anecdote regarding Apple TV+ and Hollywood star branding.
Looking over my Apple TV+ usage over the past few months, actors/actresses have played a key role in my watch habits. Apple’s heavy marketing around the new Jennifer Lawrence movie "Causeway" included making her Hunger Games films available to TV+ subscribers for free for a limited time. Those movies represented a decent amount of my TV+ watch time in the back half of 2022.
It is fair to question if this star power emphasis appeals to certain age demographics (i.e. older) over others. However, considering that all Apple TV+ subs are essentially family subs, Apple only needs to appeal to one family member to do well in the subscription engagement/dollars battle.
Alphabet FY4Q22 Earnings
Continuing our earnings reviews, we turn to Alphabet. The company reported 4Q22 earnings back on February 2nd.
Here are the major financial line items compared to those of peers:
(click / tap here to view table)
In what has become a theme with these releases, a main takeaway from Alphabet’s earnings call was a focus on cost controls. There was talk of economic anxiety, softness in various businesses, and a resulting push for optimization and improved profitability.
A big difference between Google and Amazon is that Google Search remains highly profitable.
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Branding in Paid Video Streaming, Amazon 4Q22 Earnings (Daily Update)
Hello everyone. We will begin today's update with one topic from yesterday that deserves more attention: branding in video streaming. Branding will gain importance as competition intensifies. The discussion will then turn to Amazon earnings. We go over Neil’s thoughts on the company’s 4Q22 earnings release and conference call.
Let's jump right in.
Branding in Paid Video Streaming
One of the more controversial debates in paid video streaming has been found with branding.
A few years ago, Bob Greenblatt, formerly of WarnerMedia, claimed Netflix lacked a brand:
“It's just a place you go to get anything -- it's like Encyclopedia Britannica. That's a great business model when you're trying to reach as many people on the planet as you can."
At the time, his comments lit a firestorm in various streaming circles. Some people thought he was right while others thought he was clueless. My view was that he was more right than wrong. Greenblatt was referring to Netflix not having any discernible content branding. While Netflix has had hit shows, the service was known more as a destination for consuming general video entertainment. “Watch Netflix” was used by some to simply mean watch TV.
HBO wrapped its brand around marquee shows. Say HBO and “Game of Thrones” or “Succession” probably comes to mind.
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Disney Earnings, Disney’s Anti-Netflix Strategy, Apple Got It Right With TV+ (Daily Update)
Hello everyone. We will kick things off with Disney earnings. The discussion includes Iger’s strategy for Disney+ and how Disney is following an anti-Netflix strategy. We conclude with the ways Apple got paid video streaming right with Apple TV+. Let's jump right in.
Disney Earnings
It’s been nearly three months since Disney board’s brought Bob Iger back to replace Bob Chapek. Last week’s earnings release represented Iger’s first one back as CEO.
In what has been a recurring earnings theme with Disney, the Parks segment results were stellar (21% revenue growth and $3B of operating income) while Direct-to-Consumer experienced a $1.1B operating loss. Linear networks (U.S.) saw flat revenue and $0.9B of operating income, testaments to how legacy TV continues to hang on.
Here are Disney’s DTC subscription totals (as of December 31st, 2022):
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Selling Non-Pro iPhones, Revisiting iPhone Repairability, Less Frequent Upgrading Can Help Apple's User Monetization (Daily Update)
Hello everyone. Welcome to a new week. In today's update, we will cover a few topics related to the iPhone. The discussion begins with Apple’s strategy for selling non-pro iPhones. This leads us to revisiting the subject of iPhone repairability. We go over three primary implications of improved iPhone repairability. The discussion ends with an example of how Apple can turn less frequent device upgrading into improved user monetization over time. Let's jump right in.
Selling Non-Pro iPhones
Over at The Sydney Morning Herald, here is Tim Biggs:
“The latest line-up of iPhones has arguably the biggest gap ever between the standard models and the Pros. The phones have different displays, different features, different cameras and different processors.
If you ask Apple, it will say the two categories are designed with two different consumers in mind, each model having its own strengths. And if you take a look inside, you’ll see that the standard phone can’t simply be written off as a stripped-down Pro or a repackaged model from last year…
It can be hard to tell just from looking at the specs and exteriors where each ‘standard’ iPhone model sits in a hierarchy amid previous models and Pros, new and old. With Pros, it’s easy to assume they’re the biggest and best iPhones at the time of release, but with the standards there’s always an implicit question of what sacrifices are made to get to the lower price.
Richard Dinh, Apple’s longtime senior director of iPhone design, said the company didn’t really think of it like that.
‘We don’t always follow a recipe, as much as maybe our customers would like to predict what we’re going to go do next, but it always starts with the customer experience,’ he said, noting that a standard phone might have different goals for performance, weight, longevity and photography than the Pro models.
‘Sometimes we do draw from the Pros because they’re just incredible, and we’re bringing some of that hardware to a broader audience, and sometimes we go do something different.’”
In talking to The Sydney Morning Herald, one of Apple's goals was to draw attention to how less expensive flagship iPhone models aren’t just pro models that had features removed. Instead, non-pro iPhone models may in some years contain features that premium models lack. For the iPhone 14 and 14 Plus, such features include superior battery life (found with the Plus) and repairability (found with the 14).
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Apple to Drop “Head of Industrial Design” Role, Jeff Williams and Design, My Updated Apple Earnings Model (Daily Update)
Hello everyone. In today’s update, we will focus on a news item related to Apple design that came out the same day that Apple reported 1Q23 earnings. We conclude with Neil’s updated Apple earnings model and how the model changed following Apple’s 1Q23 results and 2Q23 guidance commentary. Access to Neil’s Apple earnings model is a benefit associated with Above Avalon membership at no additional cost. Let’s jump right in.
Apple to Drop “Head of Industrial Design” Role
Over at Bloomberg, here’s Mark Gurman:
“Apple Inc. has decided against naming a new executive to replace its departing top product designer, marking a stark shift for a company long celebrated for the look and feel of its devices.
The iPhone maker’s vice president of industrial design, Evans Hankey, won’t be replaced when she leaves the company in the coming months, according to people with knowledge of the decision, who asked not to be identified because the deliberations are private. An Apple spokeswoman declined to comment.
Instead, the company’s core group of about 20 industrial designers will report to Jeff Williams, Apple’s chief operating officer. The company will also give larger roles to a group of Apple’s longest-tenured designers. Hankey has reported to Williams since taking the job in 2019, when top designer Jony Ive left to start his own firm.”
Gurman has spent months crafting an off-the-mark narrative that turnover in Apple’s industrial design group (ID group) is hurting Apple’s attempts to find a successor to Hankey. As we will discuss shortly, there is good reason to be skeptical of such a claim.
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Apple 1Q23 10-Q Takeaways, Apple's Share Buyback Update, Revisiting Apple’s Cash Neutral Goal (Daily Update)
Hello everyone. Today’s update will conclude our Apple earnings review as we go over Apple’s 1Q23 10-Q and focus on some balance sheet items (share buyback pace and Apple’s cash neutral goal). The plan is to include an updated version of Neil’s Apple earnings model in tomorrow’s update. Let’s jump right in.
Apple 1Q23 10-Q Takeaways
Published at the end of FY1Q, 2Q, and 3Q, 10-Q filings provide additional commentary and disclosures regarding a company's financial results.
The following items from Apple's 1Q23 10-Q jumped out at me. We will discuss Apple’s share buyback shortly.
Product Details. Apple provided additional commentary behind sales trends for its major product categories.
iPhone. Net sales decreased in 1Q23 due “primarily to lower net sales from the Company’s new iPhone models.” The comment is referring to Apple not being able to report iPhone unit sales growth due to iPhone 14 Pro and Pro Max shortages.
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Apple’s Paid Subscriptions Growth, Apple Gross Margin Hits Decade High, Apple’s Next Marginal Customer (Daily Update)
Hello everyone. In today's update, we will address a few topics carried over from Apple's 1Q23 earnings release: paid subscriptions growth trends and gross margin improvement. We begin with Neil’s estimates for new paid subscriptions added across Apple’s ecosystem on a quarterly basis. The discussion then turns to Apple’s gross margin improvement. We go over the most likely driver of the stronger performance. The update concludes with an underlying story to be told about Apple’s gross margin hitting a 10-year high. Let's jump right in.
Apple’s Paid Subscriptions Growth
It’s been five months since we last examined Apple’s paid subscriptions trends.
In keeping with its usual disclosure, Apple provided an updated total during its 1Q23 earnings call for the number of paid subscriptions across the Apple ecosystem.
Based on Apple’s commentary, here are my estimates for the number of paid subscriptions across Apple’s ecosystem (first party and third party) on a quarterly basis:
1Q20: 482M paid subscriptions
2Q20: 518M
3Q20: 553M
4Q20: 588M
1Q21: 623M
2Q21: 663M
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Reading Between the Lines of Apple’s 1Q23 Earnings Q&A With Analysts (Daily Update)
Hello everyone. Welcome to a new week.
Last Friday, we went over the numbers from Apple’s 1Q23 earnings release. We also looked at two of the major themes from earnings: the significant FX impact on Apple’s results and changing device upgrading trends.
In today’s update, we will focus on Apple’s 1Q23 earnings Q&A session with analysts. Instead of just recapping the question and answer exchanges that occurred on Apple’s call, we will go over Neil’s thoughts / response to each exchange. This will allow Neil to go beyond what was talked about on the call. Let’s jump right in.
Reading Between the Lines of Apple’s 1Q23 Earnings Q&A With Analysts
NOTE: The following earnings call questions (“Q”) and answers (“Cook” or “Luca”) have been cut, summarized, paraphrased, and rearranged for clarity. To read the full question and answer exchanges, The Motley Fool offers a written transcript here.
Supply Chain
Q: What is the state of Apple’s supply chain? Do you expect to increase inventory levels to insulate from supply disruptions?
Cook: Production is now back to “what we need it to be.” We continue to optimize our supply chain. We now have final assembly for iPhone in three countries. Given all that has happened over the past three years, our supply chain has proven to be resilient.
My response: Apple received a variation
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Apple 1Q23: By the Numbers, The FX Factor, My Apple Earnings Theory (Daily Update)
Hello everyone. Today's special Friday edition of the Daily Update will be focused on reviewing Apple's earnings. The idea is to keep things broad and look at the big picture. We also examine how Apple’s results compared to Neil’s expectations. The earnings discussion will continue next week. Let's jump right in.
Apple 1Q23: By the Numbers
We knew 1Q23 was going to be a noisy quarter for Apple. Along those lines, we didn’t get too many surprises. Results were all over the place. iPhone results missed my estimate by $5.0B while iPad beat by $1.5B.
Heading into earnings, the questions were found with Apple’s 2Q23 guidance. This is where management commentary
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Final Thoughts Heading Into Apple Earnings, Spotify Earnings (Daily Update)
Hello everyone. On Monday, we went over my expectations heading into Apple’s earnings tomorrow. We also talked briefly about my thoughts on what Apple may say about FY2Q23. Yesterday’s update included my granular financial estimates and updated Apple earnings model. One item that has been on my mind is that noise found with tomorrow’s earnings may drown out the numbers and topics that should grab attention. In today’s update, we go over those key earnings items to keep an eye on tomorrow. The discussion then turns to Spotify’s 4Q22 earnings.
Final Thoughts Heading Into Apple Earnings
One item that has been on my mind is that noise found with tomorrow’s earnings may drown out the numbers and topics that should grab attention.
iPhone strength. As alluded to in yesterday's update, earnings recap headlines will probably be focused on
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