Hello everyone. It feels good to be back in the swing of things.

As it turned out, the OpenAI saga reached something of a temporary lull right before Thanksgiving last week. Sam Altman was reinstated as CEO but with a new board not of his preference (Adam D'Angelo, Larry Summers, Bret Taylor). In going back over last Monday’s update, there isn’t much that needs to be changed or updated. Some of the latest reporting, which appears to be accurate, had Altman recently trying (unsuccessfully) to make inroads in gaining board control. Such action would likely have played a role in the subsequent boardroom drama. As we discussed, the “we are moving to Microsoft” development was then a negotiation tactic on Altman’s part. If there are any new twists and turns that jump out at me, we will revisit the subject.

Two quick notes:

Last week, a new Above Avalon Report, "The State of the Mac," was published. As a reminder, an audio version of the report was also recorded and released to members with the podcast add-on attached to their membership. To get the add-on, fill out this form.
Above Avalon Gifts will go live on Monday, December 4th. More information will be available at that time.

Today’s update will cover some of the member feedback and questions that came in about the report.

More on the Mac

For the past 18 to 24 months, Mac and iPad results have led to some head-scratching.

Revenue growth rates for both product categories have been all over the place. On a quarter-to-quarter basis, it may be difficult to make sense of it all. Supply interruptions, combined with channel inventory shifts and different product launch timing have added noise to the mix. However, looking at unit sales on an annual basis, things become clearer to see. iPad unit sales were down 7% in 2023 (my estimate) while Mac unit sales were down an adjusted 10% or so (my estimate). Actual Mac unit sales were down closer to 25% due to one-time issues at the end of FY2022 / start of FY2023.

In what will likely catch many people off guard, Mac unit sales in 2023 were at the same level as they were in the mid-2010s, years before the Apple Silicon transition. Even after we adjust sales to reflect one-time factors, we are looking at a sales run rate that is just 10% higher than 2014 to 2017 sales. This leads to an obvious question: Why hasn’t Apple Silicon led to stronger Mac sales?

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