Disney Discusses DTC Strategy, Disney and Apple Underestimated in DTC, Apple Acquires PullString
Today's Above Avalon daily update includes the following topics:
Disney Discusses DTC Strategy
Disney and Apple Underestimated in DTC
Apple Acquires PullString
With Apple expected to unveil its revamped video strategy next month at Steve Jobs Theater, there is value in staying up to date with the dramatically changing video streaming landscape. Accordingly, Disney shared quite a few details about its new DTC (direct-to-consumer) strategy when reporting 4Q18 earnings. We will go over those details and how Disney and Apple are being underestimated in the DTC space. The email concludes with some Apple M&A news and my thoughts on Apple acquiring PullString.
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Apple Employees Rattled by Leadership Changes, Assessing the Real Change Underway at Apple, The Role Given to Beats Headphones
Today's Above Avalon daily update includes the following topics:
Apple Employees Rattled by Leadership Changes
Assessing the Real Change Underway at Apple
The Role Given to Beats Headphones
We kick off today’s update with my thoughts on the WSJ’s article regarding recent leadership and organizational changes rattling Apple employees. I disagree with the thesis found in the article. We then take a closer look at the major changes underway at Apple and what they imply about Apple management’s focus and priorities. We conclude with an observation that I had regarding Beats headphones and their role in Apple’s product line.
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Additional Thoughts on a Paid Apple News Subscription, First Look at Apple's Self-Driving Car Fleet Data, Thursday Q&A
Today's Above Avalon daily update includes the following topics:
Additional Thoughts on a Paid Apple News Subscription
First Look at Apple's Self-Driving Car Fleet Data
Thursday Q&A
We begin today’s update by going over my additional thoughts regarding Apple’s upcoming paid News subscription service. In particular, we look at the role Apple’s Texture acquisition will play. In addition, we run through some revenue scenarios to see why the big news publishers would be initially skeptical about a paid Apple News service (and what would change their minds). The email then turns to going through Apple’s first disengagement report regarding its fleet of self-driving test cars in California. Many publications used the data incorrectly to reach false conclusions about Apple’s progress in autonomous car R&D. We conclude with the latest installment of Thursday Q&A. I answer the following questions from Above Avalon members:
Would you publish Above Avalon on a paid Apple News service?
Given the subtleties of AirPods, should/would Apple take advantage of the relaxed US standards for hearing devices to move into hearing aids as another anchor point in its health arena?
Why doesn't Apple simply cut iPhone XR, XS and XS Max pricing by $100 to boost sales?
What would be the primary user input method for a device like smart glasses?
Given your Grand Unified Theory of Apple Products, what role would a pair of smart glasses handle?
What do you think protects Apple from extremely pricing-aggressive competitors like Xiaomi both in the short and the long term?
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The WSJ’s Confusing Article About Apple News, Making Sense of a Paid Apple News Subscription, Apple to Hold March Event
Today's Above Avalon daily update includes the following topics:
The WSJ’s Confusing Article About Apple News
Making Sense of a Paid Apple News Subscription
Apple to Hold March Event
We kick off today’s update with my thoughts on the WSJ’s article regarding news publishers battling Apple over a paid Apple News service. There were three major issues with the report. The email then turns to discussing how a paid Apple News subscription would work. We go over Apple’s sales pitch to publishers, the potential sticking points, Apple’s revenue share arrangements, and which publications would do well in such a paid service. We conclude the discussion with BuzzFeed reporting Apple is planning to hold a product event in March. There were a few things about the report that stood out to me.
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Viral AirPods, Amazon to Buy Eero, Estimating Apple’s Google TAC Revenue
Today's Above Avalon daily update includes the following topics:
Viral AirPods
Amazon to Buy Eero
Estimating Apple’s Google TAC Revenue
We begin today’s update with additional comments on the latest Above Avalon article, “AirPods Have Gone Viral.” In particular, we take a closer look at the commonality found with the three factors behind AirPods going viral. The discussion then turns to Amazon announcing it will acquire Eero, a mesh Wi-Fi router start-up. We go over Amazon’s rationale for the acquisition and revisit Apple’s decision to get out of the wireless router business. The email concludes with Google’s traffic acquisition cost (TAC) payments to Apple. We take a look at Alphabet’s most recent earnings and derive the amount Apple earned from Google TAC in 2018.
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Deirdre O’Brien as Apple CEO Candidate, Apple’s CEO Funnel, Apple Brings Modem R&D In-House
Today's Above Avalon daily update includes the following topics:
Deirdre O’Brien as Apple CEO Candidate
Apple’s CEO Funnel
Apple Brings Modem R&D In-House
We kick off today’s email by discussing Apple’s new retail chief Deirdre O’Brien’s prospects as an Apple CEO candidate. The discussion then takes a broader view on how Apple is cultivating future CEO candidates. The email concludes with news of Apple bringing modem R&D into its in-house technology group. We go over why Apple continues to work on its own modems and where the initiative is ultimately aimed.
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Spotify Earnings, Daniel Ek’s Audio Manifesto, Sonos Earnings
Today's Above Avalon daily update includes the following topics:
Spotify Earnings
Daniel Ek’s Audio Manifesto
Sonos Earnings
We kick off today’s email by going over Spotify’s 4Q18 earnings. In particular, we discuss where Spotify is growing and how it compares to Apple Music growth. The discussion then turns to Spotify co-founder and CEO Daniel Ek’s blog post regarding an audio-first path ahead for Spotify. We also discuss the idea of Apple following Spotify into original audio storytelling (exclusive podcasts). The update concludes with a look at Sonos earnings. Things aren’t looking good for Sonos.
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Angela Ahrendts to Leave Apple
Today's Above Avalon daily update is dedicated to discussing Angela Ahrendts, Apple SVP of Retail, leaving Apple and Deirdre O’Brien being promoted to SVP of Retail and People.
The 3,200-word email includes the following sections:
Angela Ahrendts to Leave Apple
How Things Likely Unfolded
The Vogue Business Interview
Playing Devil’s Advocate
Deirdre O’Brien
Ahrendts's Legacy
Above Avalon membership is required to read this daily update. Members can read the update here.
Above Avalon Membership
Above Avalon members receive the full Above Avalon experience throughout the week.
The cornerstone of Above Avalon membership is access to Neil’s exclusive daily updates about Apple. Daily updates are 2,000 words and sent via email Monday through Thursday. Updates revolve around the following topics:
Apple business and strategy analysis.
Neil’s perspective and observations on current news and Apple competitors.
Neil’s Apple financial estimates.
Full coverage of Apple earnings, product events, and keynotes.
If it is of interest to Apple, it is something I pay attention to.
Member Privileges and Benefits
Receive Exclusive Daily Updates. The cornerstone of Above Avalon membership is access to Neil’s exclusive daily updates about Apple. Each email is 2,000 words and includes Neil’s analysis and perspective on the most important stories and news impacting Apple. Unlike other paid emails that may sporadically talk about Apple, every Above Avalon daily update is focused on Apple. New updates are sent Monday through Thursday. Approximately 200 daily updates published throughout the year. Sample daily updates can be viewed here, here, and here. Members have the option of receiving a consolidated weekly version of the daily updates. In addition, an RSS feed is available for members.
Access Reports and Neil’s Earnings Model. Members have access to Above Avalon reports, which are in-depth examinations of Apple's business and financial strategy. Each report is 4,000 to 5,000 words and covers one Apple topic. Members also have access to Neil’s working Apple earnings model (an Excel file that also works in Numbers). The model is fully functional and adjustable with the ability to alter earnings drivers. Reports and Neil’s earnings model are available to members at no additional cost.
Email Priority. Receive priority when it comes to having email questions and inquiries answered. Neil personally answers all inquiries, including any customer service matters related to your membership.
Archive Access. Read more than 850 daily updates and five reports that have been previously sent to members. The Above Avalon member archive is unmatched in the marketplace in terms of the sheer amount of Apple analysis found in one location. The daily updates archive can be viewed here while the reports archive is available here.
Member Forum Access. Join other Above Avalon members in an active forum containing in-depth discussion and debate. While most private member forums have limited participation, the Above Avalon member forum has become known as one of the more vibrant private communities dedicated to Apple. Members live in 55 countries and hold a diverse range of backgrounds and occupations. There is a specific forum channel for members to share AAPL stock and options trading strategies. Neil moderates and participates in the forum. The forum is run through Slack and can be accessed here.
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Member Meet-ups. Meet Neil and other Above Avalon members to discuss Apple and other related news items. Prior meet-ups have taken place in San Francisco, Cupertino, and San Jose. Future meet-ups are possible in other cities.
Above Avalon Support. Play an active role in supporting Above Avalon as an independent source of Apple analysis. Above Avalon is fully sustained by its members.
Spotify In Talks to Buy Gimlet Media, 4Q18 Microsoft Surface Sales, Updated Apple Earnings Model
Today's Above Avalon daily update includes the following topics:
Spotify In Talks to Buy Gimlet Media
4Q18 Microsoft Surface Sales
Updated Apple Earnings Model
We kick off today’s email with my thoughts on Spotify being in talks to buy the podcast network Gimlet Media. The discussion then turns to Microsoft earnings and we take a deep dive into Surface results. The email concludes with a look at my updated Apple earnings model following Apple’s 1Q19 results. Above Avalon members have access to my working Apple earnings model.
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Notes from Apple’s 1Q19 10-Q, Rationale Behind Apple Halting Buyback in 1Q19, Early Look at Apple’s 2Q19 Buyback Pace
Today's Above Avalon daily update includes the following topics:
Notes from Apple’s 1Q19 10-Q
Rationale Behind Apple Halting Buyback in 1Q19
Early Look at Apple’s 2Q19 Buyback Pace
We kick off today’s email with my key takeaways from Apple's 10-Q filing for 1Q19. We cover 10 financial topics. The discussion then turns to Apple’s share buyback program. We tackle a few questions regarding the rationale behind Apple not buying back shares during the second half of November into December 2018. Was Apple in some way banned or barred from buying back shares once it knew it was going to miss its initial 1Q19 guidance? We also use a few financial clues to take a look at Apple’s share buyback activity in 2019.
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Apple 1Q19 Earnings Review (Details)
Today's Above Avalon daily update includes the second half of my Apple 1Q19 earnings review. We discuss my full notes and focus on the granular takeaways.
The 2,900-word email covers 29 different topics.
(The first half of my earnings review focused on the major themes is available here.)
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Apple 1Q19 Earnings Review (Major Themes)
Today's Above Avalon daily update includes the first half of my Apple 1Q19 earnings review. We discuss the major themes from Apple's earnings report and conference call.
The 3,000-word email includes the following sections:
Overall Takeaway
1Q19: By the Numbers
Apple Disclosure Bonanza
What’s Going on with iPhone?
Ecosystem, Ecosystem, Ecosystem
A Halt to Share Buyback
(The second half of my earnings review focused on my full notes and the granular takeaways is available here.)
My full Apple 1Q19 earnings review is available for Above Avalon members. To continue reading, click here.
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Apple Discloses Key App Store Financial Data Point, Hulu Revises Pricing, Aetna and Apple Announce Watch Partnership
Today's Above Avalon daily update includes the following stories:
Apple Discloses Key App Store Financial Data Point
Hulu Revises Pricing
Aetna and Apple Announce Watch Partnership
We kick off today’s email with a closer look at a key financial metric Apple just disclosed regarding the App Store. With this data point in hand, we can reach a number of valuable conclusions as to the App Store’s financial performance in 2018. The discussion then turns to Hulu revising subscription pricing less than two weeks after Netflix’s price increases. We conclude by going over my thoughts on Aetna and Apple announcing a new Apple Watch partnership. There are a number of interesting takeaways from the news when it comes to how Apple is thinking about its role in the health space.
Above Avalon membership is required to read this daily update. Members can read the update here.
Above Avalon Membership
Above Avalon members receive all of my analysis and perspective on Apple. The cornerstone of Above Avalon membership is access to my exclusive daily updates about Apple.
Daily updates are 2,000-word emails that revolve around the following topics:
Apple business and strategy analysis.
Apple financial estimates.
My perspective and observations on current news and Apple competitors.
Full coverage of Apple earnings, product events, and keynotes.
If it is of interest to Apple, it is something I pay attention to.
Member Privileges and Benefits
Exclusive Analysis. Receive exclusive daily updates containing my analysis and perspective, 100% related to Apple. Approximately 200 daily updates are published throughout the year. Members also receive my exclusive reports, in-depth examinations into Apple's business strategy. Each report covers one topic, and a new report is published each quarter.
Email Priority. Receive timely responses to email questions and inquiries.
Apple Earnings Model. Access my working Apple earnings model. The model is fully functional and adjustable with the ability to alter earnings drivers.
Archive Access. Read daily updates and reports previously sent to members. The archive can be viewed here.
Forum Access. Join other Above Avalon members in a forum containing in-depth discussion and Apple debate. The forum can be accessed here. Members live in 55 countries and hold a diverse range of backgrounds and occupations. I (Neil Cybart) personally moderate and oversee the forum.
Receive Above Avalon Weekly Articles via Email. Receive the weekly Above Avalon article via email. This feature is only available to members.
Member meet-ups. Meet me and other Above Avalon members to discuss Apple and other related news items. Prior meet-ups have taken place in San Francisco, Cupertino, and San Jose. Future meet-ups are possible in other cities.
Above Avalon Support. Play an active role in supporting Above Avalon as an independent source of Apple analysis. Above Avalon is fully sustained by its members.
Apple 1Q19 Earnings Preview, New Apple FY2019 and FY2020 Estimates, 2Q19 Apple Guidance Expectations
Today's Above Avalon daily update includes the following topics:
Apple 1Q19 Earnings Preview
New Apple FY2019 and FY2020 Estimates
2Q19 Apple Guidance Expectations
In today’s update, we preview Apple’s 1Q19 earnings. We discuss my thoughts on the overall environment heading into tomorrow’s earnings. The discussion then turns to my revised Apple financial estimates for FY2019 and FY2020. Above Avalon members have access to my working Apple earnings model. The discussion then turns to my 2Q19 guidance expectations for Apple and my final thoughts heading into earnings.
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1Q19 Installed and User Base Estimates for iPad, Calculating the Mix of Apple Devices in Use, First Look at CY4Q18 China Smartphone Shipments
Today's Above Avalon daily update includes the following topics:
1Q19 Installed and User Base Estimates for iPad
Calculating the Mix of Apple Devices in Use
First Look at CY4Q18 China Smartphone Shipments
We begin today’s email with my revised estimates for the size of the iPad installed base and user base as of the end of December 2018. The discussion then turns to my estimates regarding the number of Apple devices in use. The device total is broken out by product category. We conclude with a look at the first industry report regarding China smartphone shipments in CY4Q18 (Apple’s 1Q19). A few things jumped out at me after looking at the data.
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