Alphabet 1Q25 Earnings, Google Gemini Lagging Behind ChatGPT, Google Needs Apple
Happy Tuesday.
We are going to switch from Netflix, which arguably has the simplest growth narrative involving getting more people to pay more for content, to Google, a company struggling to explain its growth narrative. Given the way the schedule turned out, we didn’t cover Alphabet’s 4Q24 earnings three months ago. Accordingly, it's been a while since we last talked about Alphabet in depth.
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Netflix 1Q25 Earnings, Netflix’s $1T Ambition, Churn in Paid Streaming
Welcome to a new week. Apple will report FY2Q25 earnings on Thursday. We will dedicate Wednesday’s update to previewing Apple’s earnings.
For today’s update, we will focus on Netflix’s earnings. The company reported earnings two weeks ago.
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Apple Watch Turns 10 Years Old, Apple Watch: By the Numbers, Looking Ahead
Hello everyone.
Today’s update will be dedicated to Apple Watch. Ten years ago today, the Apple Watch went on sale in what was a highly anticipated launch. The Apple Watch was the first major new product category to launch during the Tim Cook era.
To mark the anniversary, Apple is running a few marketing promotions tied to the Activity app, the most popular and used app on Apple Watch, including a new Global Close Your Rings Day award.
Every Apple product has its own unique history and story. In some ways, Apple Watch’s story is intertwined with Apple betting on itself as it pertains to pushing personal technology.
In addition to going over my broader thoughts on the Apple Watch business 10 years in, we go over my estimates for various Apple Watch financial items. The update concludes with a look at the future.
Let’s jump in.
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Early Thoughts on Tariff Impact on Apple’s Financials, Apple Valuation Update
Hello everyone.
Apple reports earnings on May 1st. We will go over my detailed earnings expectations early next week.
To tie up a few loose ends that are still outstanding on the tariff front, there is value in going over my early thoughts on how tariffs will impact Apple’s financials over the next few quarters.
After what seemed to be a good two to three years of noisy Apple quarters coming out of the pandemic, there were expectations that the second half of 2024 and 2025 would provide a cleaner look at Apple’s underlying business fundamentals. Given the various moving pieces related to tariffs, Apple's FY2025 may turn out to be a noisy year from a financials perspective.
Let’s jump in for more discussion.
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Apple and Tariffs (Let’s Talk Sectoral Tariffs)
Hello everyone. Today’s discussion will be focused on sectoral tariffs tied to semiconductors. There is plenty to cover including differences between reciprocal and sectoral tariffs, the Trump administration’s goal(s) for semiconductors, and the various unanswered questions found with the topic.
Let’s jump right in.
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Apple and Tariffs (Exemptions Granted, With a Twist)
Hello everyone. It feels good to be back after some time off for spring break.
On the tariff front, the major news involving exemptions broke a few hours after the most recent daily update was published on Friday, April 11th. Accordingly, we are going to dedicate today’s update to going over the tariff exemptions. The way these exemptions subsequently played out on social media then fueled an interesting twist involving sectorial tariffs.
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Apple and Tariffs (Part 4)
Hello everyone. Today’s update will conclude our multi-day discussion involving everything tariffs. After today’s discussion, we will be in good shape in terms of addressing most outstanding questions involving Apple and tariffs. In terms of accuracy, we are right on track with how events on the ground have been unfolding. One of my goals for this week’s discussion has been to not get caught up in the craziness – most of which is unnecessary and driven by social media.
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Apple and Tariffs (Part 3)
Hello everyone. Happy Wednesday.
After a few days of little to no clarity on tariffs, there was quite a bit of news today. We will keep going with this week’s format of having one multi-day discussion. Let’s jump right in.
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Apple and Tariffs (Part 2)
Hello everyone. The level of unknown surrounding the tariff situation continues to rise.
We continue our multi-day discussion on Apple and tariffs. Today’s update will keep us on Apple’s supply chain.
On our “to discuss” list for the rest of the week:
Pros and cons found with Apple passing tariff costs on to consumers.
More on what looks like a full-fledged game of who will blink first between the U.S. and China as 104% import tariffs go into effect.
Apple’s earnings power, and valuation implications, after considering both universal and reciprocal various tariffs.
Let’s jump right in.
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Apple and Tariffs (Part 1)
Hello everyone. We are going to take advantage of this daily newsletter’s format when it comes to analyzing Apple and tariffs. There will be a discussion that stretches across several updates. Today’s update will be “Part 1.”
My goal is to cover pretty much every nook and cranny that should be covered when it comes to Apple and tariffs. There is a lot of noise in terms of publications and people focusing on the wrong things. Accordingly, our discussion may have different focus areas compared to prevailing analysis circulating on social media.
For today’s discussion, we are going to start a bit big picture by laying out the situation. In the coming days, there will opportunity for us to go deeper on some points.
Let’s jump in.
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Trump Announces Additional Tariffs, White House Hints at Tariff Exemptions for Apple, Apple Options
Today's Above Avalon Daily email contains the following stories:
Trump Announces Additional Tariffs
White House Hints at Tariff Exemptions for Apple
Apple Options
Hello everyone. Given how some of you are new to Above Avalon membership (welcome), today is a good time to reiterate that this is not a politics newsletter. Accordingly, our focus is not going to be on the pros and cons of U.S. tariffs. Instead, we have plenty of items to discuss pertaining to how yesterday's big announcement involving reciprocal tariffs will impact Apple. The discussion will begin by going over what was announced. We will then turn to my latest thinking regarding Apple receiving tariff exemptions. The update will conclude with several options Apple has at its disposal if tariff exemptions do not materialize.
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Tesla 1Q25 Delivery Figures, Cybertruck Sales Disclosed, The Big (Auto) Picture
Today's Above Avalon Daily email contains the following stories:
Tesla 1Q25 Delivery Figures
Cybertruck Sales Disclosed
The Big (Auto) Picture
The highly anticipated reciprocal tariffs news just dropped. We will dedicate tomorrow’s update to the topic. It’s been nearly a year to the day (April 3rd, 2024) since we last talked about Tesla at length in these updates. Since Apple disbanded Project Titan, my overall approach to the auto industry as it pertains to these updates hasn’t changed. It is good to keep abreast of what’s unfolding in the car industry as the market is too large for Apple to ignore. While the ingredients may not be ripe for Apple’s entry over the next few years, we can’t rule out the company having renewed interest down the road. There is then Apple’s CarPlay initiative as a current integration offering between first-party hardware and non-Apple hardware.
We will begin today’s discussion by going over Tesla’s latest deliveries report.
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More on iPhone Tariffs and India, Tariff Engineering, Apple Fined for Protecting User Privacy
Today's Above Avalon Daily email contains the following stories:
More on iPhone Tariffs and India
Tariff Engineering
Apple Fined for Protecting User Privacy
Welcome to April. We are going to jump into today’s update with some follow-up to yesterday’s discussion. The update focuses on how iPhone production in India impacts Apple’s exposure to U.S. tariffs. We then turn to how Apple can pursue various tariff engineering mechanisms to avoid tariffs. The update concludes with more absurdity from European tech regulators.
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