Amazon Earnings, Amazon’s Growth Initiatives, Amazon Bets on Return to Office

Hello everyone.

Welcome to a new week.

To recap where things stand in what has been a whirlwind of a month, last week we concluded our Apple 2Q23 earnings review. There were four updates dedicated to earnings:

Starting with today’s update, we will pick up where we left off by examining CY1Q23 earnings from Apple’s peers and competitors. In addition, developer conference season has kicked off with Google I/O last week.

The update begins with Neil’s thoughts on Amazon’s earnings. The discussion then turns to Amazon CEO Andy Jassy’s 2022 shareholder letter. We conclude with Amazon’s renewed pitch for having its corporate employees spend more time in the office instead of work from home.

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Let’s jump into today’s update.

Amazon Earnings

The big theme from Amazon’s CY1Q23 earnings was optimization. The company continues to work through an overinvestment cycle in which management thought pandemic-driven demand would continue seemingly unabated. Instead, Amazon ended up front-running demand by ramping up capex and investment spending. Management claims to have made some progress in working through the overinvestment, including substantial reconfigurations of its U.S. fulfillment network. Wall Street remains concerned (and somewhat confused) with what normalized profit margins will look like for Amazon.

From a product perspective, the Amazon story continues to be found with

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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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iPhone Supply Bounces Back, Sketchy Rumors About iPhone 14 Plus, Amazon's Growing Layoffs (Daily Update)

We kick things off with a look at the latest production news from Foxconn’s “iPhone City.” The discussion then turns to iPhone 14 Plus rumors regarding weak sales and Apple management being “seriously” concerned. The update concludes with Neil’s thoughts on Amazon dramatically raising the number of announced layoffs in its corporate ranks.

Hello everyone. We will jump right into today's update.

iPhone Supply Bounces Back

Here’s Fox Business:

“The world's largest iPhone factory has reportedly been brought back to 90% capacity months after workers in China had shut down the plant over the government's COVID-19 restrictions.

Foxconn Technology Group claims it is operating the factory with approximately 200,000 workers in the central Chinese of Zhengzhou, according to a report from Henan Daily, a Chinese state media outlet. The group is Apple Inc.'s largest production partner for their featured smartphone.

In October 2022, Zhengzhou, also known as iPhone City, came to a standstill after thousands of workers stalled production due to the government's strict zero-COVID policies. The protests disrupted supply chains and cost Apple billions over the last few months.

‘At the moment, the order books look good, and the orders will peak from now until a few months after Chinese New Year,’ said Wang Xue, the deputy general manager of the factory, in an interview with the Chinese outlet.”

If the reporting is true, Foxconn’s iPhone City reaching 90% production capacity at quarter end would be a very positive development for an iPhone business that just went through a tumultuous two-month stretch.

A direct implication found with Foxconn’s primary iPhone facilities operating again at near full capacity, as of the end of December, is

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