Intel Buys Mobileye, Mobileye's Motivation, Intel's Motivation, Apple Implications
Today's Above Avalon email includes the following stories:
- Intel Buys Mobileye
- Mobileye's Motivation
- Intel's Motivation
- Apple Implications
Today's email is focused on Intel's Mobileye acquisition. We begin the discussion by going over the deal itself, including why Mobileye likely decided to sell at $15B. The email then takes a closer look at why Intel views owning Mobileye as essential for competing in the next major battle in tech. We conclude with a broader overview of what Intel's Mobileye acquisition means for Apple and Project Titan, its transportation R&D start-up.
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Building iPhones in India, Siri's Advantage, SoundCloud Is in Trouble
Today's Above Avalon email includes the following stories:
- Building iPhones in India
- Siri's Advantage
- SoundCloud Is in Trouble
We kick off today's email with a closer look at Apple's plans for bringing iPhone production to India. In recent weeks, we have gotten a better view of how Apple is thinking about its emerging markets opportunity. The email then turns to how Siri "learns" new languages. We go over my thoughts and observations on the process, including where I think Siri stands today. The discussion concludes with an update as to SoundCloud's long-term prospects. We go over the Recode article saying SoundCloud is running out of cash. We then discuss why I think SoundCloud is having trouble finding a buyer.
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Mobile World Congress Was Irrelevant, Tech Trade Shows Are an Endangered Species, Didi Opens R&D Lab in U.S.
Today's Above Avalon email includes the following stories:
- Mobile World Congress Was Irrelevant
- Tech Trade Shows Are an Endangered Species
- Didi Opens R&D Lab in U.S.
We begin today's email with my thoughts and observations on this year's Mobile World Congress (MWC), the biggest tech trade show focused on mobile. This year's MWC felt different. We look at what the conference told me about the changing smartphone landscape. The discussion then turns to why I think consumer tech trade shows are an endangered species given where the industry is headed. The email concludes with news of Didi opening a new R&D center in the U.S. We look at the most likely use for the center and what it means for the broader race to make autonomous cars. There has been a change in perception recently when it comes to Silicon Valley and autonomous driving.
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Apple Brings Back the iPhone 6, Tim Cook Reassures Pro Users, Spotify Crosses 50M "Paying" Subscribers
Today's Above Avalon email includes the following stories:
- Apple Brings Back the iPhone 6
- Tim Cook Reassures Pro Users
- Spotify Crosses 50M "Paying" Subscribers
We kick off today's email with my thoughts and observations on the iPhone 6 making a return in select markets. Apple appears to be making a minor change in its global iPhone product strategy. The discussion then turns to Tim Cook once again reassuring pro users that Apple remains focused on doing more in the pro area. We discuss why Cook's comments on the subject continue to worry some Apple users. The email concludes with news of Spotify crossing 50M subscribers. There is a backstory to Spotify announcing 50M subscribers that very few are discussing.
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Apple and Hockey Stick Growth, Apple Watch and Hockey Stick Growth Potential, Apple Losing in Classrooms
Today's Above Avalon email includes the following stories:
- Apple and Hockey Stick Growth
- Apple Watch and Hockey Stick Growth Potential
- Apple Losing in Classrooms
We kick off today's email with a closer look at hockey stick growth, or the idea of an inflection point leading to a dramatic change in revenue and unit sales growth. At first, we look at a few examples of hockey stick growth found with Apple. We then expand the discussion to include Apple Watch and assess the factors needed for the device to see hockey stick growth when it comes to consumer demand. The email concludes with a closer look at the NYT's article about Apple losing the battle for the classroom to Chromebooks. We go over my thoughts and observations on the topic, including Apple's stance on the issue.
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Wearables as a Platform, New 2017 and 2018 Apple Watch Sales Estimates, Deep Dive into 4Q16 Wearables Market
Today's Above Avalon email includes the following stories:
- Wearables as a Platform
- New 2017 and 2018 Apple Watch Sales Estimates
- Deep Dive into 4Q16 Wearables Market
We begin today's email by continuing the discussion kicked off in my article, "The New Leader in Wearables." Specifically, we go over a few examples of how Apple's wearables products demonstrate wearables are becoming a platform play. We then discuss my revised Apple Watch unit sales estimates for FY2017 and FY2018. I altered my methodology to better reflect recent market trends. We then discuss how Apple Watch unit sales growth should be viewed with iPhone and iPad sales growth serving as the backdrop. The email concludes with an overall view of the 4Q16 wearables market. We go over my additional thoughts and observations on 4Q16 wearables sales trends, including Apple's smartwatch market share.
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A $1,000 OLED iPhone, USB-C and iPhone, Thursday Q&A
Today's Above Avalon email includes the following stories:
- A $1,000 OLED iPhone
- USB-C and iPhone
- Thursday Q&A
We begin today's email with my thoughts and observations on The Wall Street Journal's article about the new iPhones scheduled to be released later this year. We discuss the probability of Apple shipping a $1,000 OLED iPhone. The discussion then turns to the WSJ saying the new iPhone will come with a USB-C port instead of Lightning. After going over some big picture takeaways regarding USB-C, we look at a scenario where this change would make sense. We then weigh the likelihood of that scenario occurring later this year. We end the email with the latest installment of member Q&A, and I answer the following question from an Above Avalon member:
- Is it common for a large company like Apple to have its top five shareholders own as much as 20% of the outstanding shares?
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YouTube TV, Google Calling It Quits with Pixel Laptops, Google Assistant No Longer Pixel Exclusive
Today's Above Avalon email includes the following stories:
- YouTube TV
- Google Calling It Quits with Pixel Laptops
- Google Assistant No Longer Pixel Exclusive
We kick off today's email with my thoughts and observations on YouTube TV. Google is getting on the skinny cable bundle bandwagon. The discussion then turns to news of Google getting out of the laptop hardware business. We revisit Google's broader hardware strategy. In addition, we go over why Google's Pixel smartphone strategy is increasingly looking shaky as Google brings Google Assistant to other Android smartphones.
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Warren Buffett Bets Big on Apple, Buying the iPhone Company, Buffett on Apple Share Repurchases
Today's Above Avalon email includes the following stories:
- Warren Buffett Bets Big on Apple
- Buying the iPhone Company
- Buffett on Apple Share Repurchases
Today's email is focused on Warren Buffett and Berkshire Hathaway becoming the fourth largest Apple shareholder by purchasing an additional 72M Apple shares last month. We begin by going over the timeline of Berkshire Hathaway's Apple share purchase activity, as well as why Buffett is willing to talk now about his Apple purchases. The email then turns to Buffett's motivation for buying a $18B stake in Apple. He doesn't look at Apple as just a technology company. We then look at Buffett's commentary regarding share repurchases and how it relates to Apple's current share repurchase program. The email concludes with my thoughts on Buffett's shockingly simple thesis regarding his Apple investment going forward.
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iPhone Sales Estimate Methodology, 1Q17 iPhone Installed Base Estimates, New 2017 and 2018 iPhone Sales Estimates
Today's Above Avalon email includes the following stories:
- iPhone Sales Estimate Methodology
- 1Q17 iPhone Installed Base Estimates
- New 2017 and 2018 iPhone Sales Estimates
Today's email is focused on iPhone sales estimates. We begin by discussing my methodology for deriving iPhone unit sales estimates. The email then turns to the iPhone installed base. I share my estimates for the number of new iPhone users per year from 2007 to 2018, including my revised estimate for the size of the iPhone installed base and user base as of December 31, 2016. We conclude with my revised iPhone unit sales estimates for FY2017 and FY2018. We also go over my thoughts and observations on the idea of a "mega upgrade" cycle being kicked off by new iPhones later this year.
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Apple Park and Steve Jobs Theater, Fitbit Is in Denial, Garmin 4Q16 Earnings
Today's Above Avalon email includes the following stories:
- Apple Park and Steve Jobs Theater
- Fitbit Is in Denial
- Garmin 4Q16 Earnings
We begin today's email by taking a closer look at Apple's announcement regarding Apple Park (formerly known as Apple Campus 2) and Steve Jobs Theater. There are a few items that stood out to me regarding Apple Park and the theater. The email then takes a deep dive into Fitbit's earnings conference call last evening. The company is in complete denial when it comes to the wearables market. We go over the major takeaways from the call. The discussion then turns to Garmin's 4Q16 earnings. Garmin is one of three legitimate companies in the smartwatch industry. Management had a number of interesting observations regarding the changing wrist wearables market.
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Additional Thoughts on Apple/Netflix, Microsoft HoloLens Pushed out to 2019, Samsung Wins Big OLED Order from Apple
Today's Above Avalon emails includes the following stories:
- Additional Thoughts on Apple/Netflix
- Microsoft HoloLens Pushed out to 2019
- Samsung Wins Big OLED Order from Apple
We begin today's email by continuing the discussion kicked off in my article, "Apple Doesn't Need to Buy Netflix." We go over why I am firmly in the camp that a Netflix acquisition does not make sense for Apple. The email then turns to news that Microsoft is pushing back HoloLens updates to 2019. Is everything going okay with Microsoft's mixed reality strategy? We look at the broader trend of companies struggling to bring AR to the mass market. We conclude with a closer look at Samsung's large OLED order from Apple, and the major takeaways as to what the order means for FY17 and FY18 iPhone estimates.
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The New iPad Pro Ad Campaign, Fossil Seeing Smartwatch Strength
Today's Above Avalon email includes the following stories:
- The New iPad Pro Ad Campaign
- Fossil Seeing Smartwatch Strength
We begin today's email with a closer look at Apple's new iPad Pro ad campaign. This is the first multi-ad campaign for the iPad Pro. We discuss the target market Apple is going after with these ads and what it tells us about Apple's iPad strategy. We also go over a few additional observations on the ads. The email then turns to Fossil management's commentary regarding the watch industry during this past holiday quarter. The company is seeing something different than many other wrist wearables companies.
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Apple's M&A "Struggles," Apple Considered Buying Imagine Entertainment, Thursday Q&A
Today's Above Avalon stories:
- Apple's M&A "Struggles"
- Apple Considered Buying Imagine Entertainment
- Thursday Q&A
We begin today's email with my thoughts on Bloomberg's article, "Apple Struggles to Make Big Deals, Hampering Strategy Shifts." We discuss why I'm surprised Bloomberg ran the story and how the narratives critical of Apple are starting to change. The email then turns to news that Apple considered buying Imagine Entertainment as part of its content strategy play. We discuss what Apple likely saw in Imagine Entertainment and what it tells us about Apple's evolving content strategy. We end the email with the latest installment of member Q&A, and I answer the following questions from Above Avalon members:
- How big of a deal is it that Berkshire Hathaway continues to increase its stake in AAPL?
- Is Apple considering future stock splits through their share repurchase strategy?
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Apple CFO's Fireside Chat at Goldman Sachs, Thoughts on AAPL Shares Reaching All-Time High
Today's Above Avalon stories:
- Apple CFO's Fireside Chat at Goldman Sachs
- Thoughts on AAPL Shares Reaching All-Time High
We begin today's email by going through Apple CFO Luca Maestri's presentation at the Goldman Sachs Technology and Internet Conference in San Francisco. We go over 13 topics from the talk. The discussion then turns to my thoughts and observations on AAPL shares hitting an all-time high yesterday. We go over four takeaways that I had regarding AAPL's stock price performance.
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