Apple’s App Store Emergency Motion Denied, Early Tests Show IAP Beats Web Payments, Indie Developers May Continue to Prioritize IAP
Hello everyone. Today’s update will take us into App Store land.
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Let's jump into today's update.
Apple’s App Store Emergency Motion Denied
Apple received more bad news from a U.S. court regarding the App Store. The company’s emergency motion for a partial stay pending its appeal of the App Store anti-steering injunction ruling was denied.
“Apple on Wednesday failed to persuade a U.S. appeals court to pause key parts of a federal judge's order requiring the iPhone maker to immediately open its lucrative App Store to more competition.
The 9th U.S. Circuit Court of Appeals rejected Apple's request to put the provisions on hold as the tech company appeals the judge's order, which came in a long-running antitrust lawsuit brought by ‘Fortnite’ maker Epic Games…
In its emergency appeal, Apple said the ruling blocked the company from ‘exercising control over core aspects of its business operations’ and forced it to give free access to its services.
Epic Games countered that Apple was trying to continue evading competition and collecting fees that the judge had barred.”
The court said: "After reviewing the relevant factors, we are not persuaded that a stay is appropriate."
A few notes:
1) Judge Yvonne Gonzalez Rogers’ injunction ruling directives, which Apple is following, will now stand for however long the appeal process takes. Expectations are for an appeal to take around six months. Apple was hoping its emergency motion for a partial stay would be granted so that the App Store would be brought back to its pre-injunction ruling status for the duration of the appeal. If Apple loses its appeal, the company can ask for the Supreme Court to review. The changes dictated by Judge Gonzalez Rogers would remain available to developers throughout that process.
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More on Apple’s “F1 The Movie” Marketing, Apple Needs to Do More Ecosystem Marketing
Hello everyone. Welcome to July.
A quick programming alert.
A new AVALON podcast episode is available.
“Don’t Lose Brad Pitt’s Phone Number” was about “F1 The Movie,” Apple TV+ strategy, movie theater headwinds, and more. The unscripted weekly podcast, loosely modeled after Apple’s famous Monday morning meetings, is a perfect complement to this daily newsletter. Above Avalon members receive special subscription pricing for AVALON. More information is available here.
Let's jump into today's discussion.
More on Apple’s “F1 The Movie” Marketing
In addition to what we can refer to as traditional marketing for “F1 The Movie” (cable, print, brand partnerships, etc.), Apple leveraged its ecosystem to push the film.
Consider the following examples of how Apple tied in its various services, apps, and products to get the word out about “F1 The Movie”:
Apple News / Apple Podcasts: A GQ profile was highlighted by the Apple News team and turned into an Apple News+ Narrated podcast.
Apple Maps: Users can see “iconic tracks” from “F1 The Movie.” See the image below.
Apple Wallet: The (controversial) Apple Pay promotion for "F1 The Movie" tickets purchased through Fandango.
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Apple’s “F1 The Movie” Scores at Box Office, A Big Win for Tim Cook and Eddy Cue, Apple’s Controversial Apple Pay Promotion
Happy Monday. It feels good to be back after some time off. Fortunately, it looks like the news flow was on the light side last week. We will use the down time to follow-up on several topics in addition to focusing on a few new topics.
Let’s jump right in.
Apple’s “F1 The Movie” Scores at Box Office
Here’s Variety:
“It’s lights out and away we go at the box office as ‘F1,’ a big-budget racing drama starring Brad Pitt, impressively revs to $55.6 million in its domestic opening weekend.
With great reviews and a promising ‘A’ grade on CinemaScore exit polls, ‘F1’ landed in the middle of expectations of $50 million to $60 million. At the international box office, the film collected a strong $88.4 million from 78 markets. Those initial ticket sales are significant given ‘F1’ is an adult-skewing tentpole that’s not part of an existing film franchise — a rarity in today’s I.P.-dominated movie theater landscape…
‘F1’ also marks the first commercial hit for Apple, the tech giant that financed the nearly $250 million-budgeted movie. (Apple put the production budget at $200 million but others have reported the number is closer to $300 million). That’s not including the many millions on promotional efforts, including a globe-spanning press tour. And since Apple doesn’t have a distribution arm, the company is paying a fee to Warner Bros. to put the film in theaters. WB will also receive a percentage of theatrical revenues that increases with certain box office benchmarks.”
While we still need to see how “F1 The Movie” performs over the next few weeks, including the all-important long Fourth of July weekend, there is no question that the film will become Apple’s highest-grossing movie, surpassing “Napoleon” which grabbed $221M.
It’s rational to conclude Apple’s unprecedented marketing push contributed to the film’s opening weekend success. Apple leveraged nearly every one of its content distribution services to let users know about the film in some way (as Apple should do). Hollywood is envious of Apple today as anyone behind a potential blockbuster film craves Apple’s ability to use its ecosystem to promote a film. There is a larger discussion to be had when it comes to Apple using its products and services to inform users of other Apple products, services, and content. We will tackle that topic tomorrow.
While extensive marketing certainly helps a film’s prospects at theaters, box office success has become far more complicated.
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Apple Goes All-In on “F1 The Movie,” Why Apple Is Doing Apple TV+, Betting on Storytelling in a Sea of TikToks
Hello everyone.
A quick programming alert: Episode 3 of my all-new AVALON podcast has been released. The weekly podcast, which is my first unscripted podcast, is loosely modeled after Apple’s Monday morning executive meetings. Episode 3 was focused on Siri, digital voice assistants, chatbots, and more. The episode came in at 86 minutes. If you enjoy podcasts and Above Avalon, I think you are going to really like AVALON. Bundle the podcast with your membership for just +$6/month or +$60/year (both are 40% off regular AVALON pricing) by filling out this form. Bundle the Podcasts add-on and receive both the Above Avalon Daily and AVALON podcasts for just +$10/month (a really great deal).
Let’s jump into today’s discussion which will take us to Apple TV+ land.
Apple Goes All-In on “F1 The Movie”
Apple is going all-in on promoting its upcoming film, “F1 The Movie.” Apple Studios is one of four production companies behind the film with Apple Original Films joining Warner Bros. Pictures on the distribution front. (Apple is handling the streaming video on demand component.)
Consider the following marketing events:
WWDC keynote: The opening video was used to market the film.
June 10th: Apple held a pre-screening of the film at Steve Jobs Theater for WWDC attendees and media/press.
June 11th: Apple released an innovative “F1 The Movie” haptic trailer that works with the iPhone Taptic Engine. This is the first-of-a-kind trailer. It's pretty cool. Give it a try (on an iPhone) here.
This past Sunday: Following a “Severance” panel at Apple’s flagship store in NYC, Tim Cook and Brad Pitt made a surprise appearance to push F1 The Movie.
This past Monday: A number of senior Apple executives were front-and-center at the worldwide premiere in NYC.
These events, in addition to traditional press, combine to represent a marketing push from Apple unlike anything we have seen with a prior Apple TV+ film or movie. In some ways, Tim Cook and Eddy Cue are going all-in and in the process positioning “F1 The Movie” as a barometer of Apple’s six-plus-year bet on original video.
We will see how the movie ticket numbers pan out. If “F1 The Movie” brings people out to the theaters, Cook and Cue are going to receive a major boost of validation. (If there are any heat waves in the U.S., that will help get people into AC-equipped theaters.) If the movie flops, the list of Apple PR headaches will grow.
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My Reaction to Apple’s Post-Keynote Press at WWDC, Apple Talks iPad vs. Mac
Taking a quick step back to recap where we are from an analysis perspective.
Last week’s Above Avalon Daily updates went over my thoughts on WWDC news and announcements. This week’s updates cover interesting observations from the various Apple executive interviews that took place after the keynote.
My plan, as of now, is to use slower news periods in July to revisit some WWDC announcements that can benefit from more thorough examination.
Let’s jump right in.
My Reaction to Apple’s Post-Keynote Press at WWDC
Monday’s update was focused specifically on Apple’s explanation regarding more personal Siri being delayed. For today’s update, we will look more broadly at Apple’s post-WWDC press strategy.
Craig Federighi, SVP software engineering, and Greg Joswiak, SVP worldwide marketing, handled the bulk of Apple’s WWDC 2025 press. Tim Cook and Eddy Cue have been busy with "F1 The Movie" marketing. More on that in tomorrow’s update.
Instead of Federighi and Joswiak appearing on John Gruber’s “The Talk Show,” which had become something of a tradition during WWDC, Apple went with:
Tom’s Guide (Mark Spoonauer) and Tech Rader (Lance Ulanoff). The video is available here.
WSJ (Joanna Stern). The video is available here.
In addition to those two “big” video interviews, Federighi and Joswiak did a handful of other video interviews with non-U.S. press and a few other media personalities. A week later, there are still new interviews appearing on my radar. We should begin to see some written press interviews as well as those tend to take a bit longer to turn around.
Each year, Apple makes some adjustments in its PR strategy, including the choice of outlets that receive interviews.
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Apple Talks Siri Delay, Remaining (Siri Delay) Questions, Takeaways
Hello everyone. Welcome to a new week. We will begin this week’s updates with a look at Apple’s post-keynote press at WWDC. Specifically, we will talk about Apple’s comments regarding the Siri delay.
Let’s jump right in.
Apple Talks Siri Delay
Back in March, Apple officially delayed a handful of Siri features that had been framed at WWDC 2024 as a more personal Siri. At the time, Apple did not give much of an explanation for the delay.
Here was Apple’s full statement:
“Siri helps our users find what they need and get things done quickly, and in just the past six months, we’ve made Siri more conversational, introduced new features like type to Siri and product knowledge and added an integration with ChatGPT. We’ve also been working on a more personalized Siri, giving it more awareness of your personal context, as well as the ability to take action for you within and across your apps. It’s going to take us longer than we thought to deliver on these features and we anticipate rolling them out in the coming year.”
At the time, that statement came across to me as Apple has a workable product in hand because they wouldn’t otherwise say the features will be available in the coming year. This also led me to conclude that reliability issues found with a more contextually aware and intelligent Siri using on-device LLMs on iOS 18 was the reason for the delay versus the features simply not working.
As a refresher, the “more personal” Siri features that were delayed included:
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Interesting Notes and Tidbits From Apple’s WWDC Keynote
Happy Friday everyone. As this crazy busy week comes to an end, today’s update will have a more informal feel as we go over my remaining notes from Apple’s WWDC 2025 keynote.
To recap my WWDC analysis as found in the daily updates:
Tuesday: Major themes.
Wednesday: Four features that provide clear signs of where Apple is headed.
Today: My remaining notes from the keynote and event.
Let's jump into today's update.
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Apple’s Master Plan (As Revealed Through WWDC 2025 Announcements)
Hello everyone.
Episode 2 of my all-new AVALON podcast is now available. This is my first unscripted audio podcast, focused on Apple product analysis and strategy. The podcast is loosely modeled after Apple’s Monday morning meetings. If you enjoy podcasts and Above Avalon, I think you would like AVALON. Episode 2, focused on WWDC, came in at 80 minutes.
Check out AVALON on social media for a few clips that will give you a taste of the show.
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In today’s update, we will go over the handful of WWDC announcements that jumped out at me as signs of where Apple and the broader industry are headed.
Let’s jump in.
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Three Themes From WWDC 2025
Hello everyone.
In today’s update, we will talk about three themes from the WWDC 2025 keynote. Two of the themes relate to items found in the keynote. The third theme is about something that wasn’t found in the keynote. In tomorrow's update, we will talk about some of my observations attending the keynote.
A few quick thoughts on the main takeaway from the WWDC 2025 keynote.
While Apple probably didn’t satisfy those who wanted the company to follow other Big Tech companies onto certain AI tracks, the announcements announced on the virtual WWDC stage were significant. In addition to unveiling its first universal redesign across its platforms, intelligence-infused features were sprinkled throughout the presentation in a multitude of ways. The frosting on the cake was a handful of visionOS and watchOS features that serve as great clues for where Apple, and the tech industry, are headed. Instead of an all-powerful, always talking chatbot that thinks for us while eschewing screens, we received proactive, spatial experiences that connect with us on an emotional level.
Liquid Glass Adds Vitality to the Apple Ecosystem
Alan Dye, Apple VP human interface design, was given the digital stage to unveil the largest redesign to Apple’s ecosystem since iOS 7 in 2013. One way to put that timeline in perspective: Above Avalon was still a year or so away from launching. The new design language, Liquid Glass, will define the way we use Apple devices for at least the next decade. There were signs found with a few iPhone features in recent years that a broader redesign was in the works.
If the iOS 7 design was about simplifying things
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Apple Revises DMA Approach in EU, Microsoft Announces Big Layoffs, Microsoft Makes Deep Cuts to Gaming, Apple Loses Motion to Dismiss Antitrust Suit
Hello everyone.
Today’s update combines Wednesday’s and Thursday’s updates into one jam-packed email. With Wall Street closing early today (Thursday) for the long Fourth of July weekend here in the U.S., we will follow the same idea. If you are celebrating the long weekend, enjoy it.
Let’s jump in.
Apple Revises DMA Approach in EU
Three months ago, the European Commission found Apple to be in violation of various DMA stipulations. On June 26th, Apple announced “a series of additional changes under the Digital Markets Act” to address the perceived violations (and avoid fines). The changes consisted of the following:
Revised (i.e. relaxed) anti-steering guidelines and accompanying business terms for developers who will utilize the new guidelines. Developers choose between having link-outs / webviews / alternative payment processing or sticking with in-app purchase (IAP).
Revised business terms for all developers as Apple transitions from the Core Technology Fee (a per install fee) to the Core Technology Commission (percentage of revenue) on digital goods and services.
Revised user experiences for installing alternative app marketplaces and apps from a developer’s website. The screen that is shown prior to non-IAP purchases has also been revised.
For ~95% of iOS developers with apps in the App Store in the EU, these revisions
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Takeaways From Apple’s New App Store Study, Apple's Ongoing Fight Against App Store Fraud, App Durability
Hello everyone. Instead of sending this update late last night, I decided to hold on to it until Friday morning.
Ahead of this year’s WWDC, Apple released a new study regarding App Store billings and sales. Earlier in the week, new data points regarding Apple’s efforts to protect developers and customers from fraud in the App Store were also released. We will talk about both topics in today’s update.
A quick update on where things stand with my new podcast, AVALON.
The first episode goes live on Tuesday. Instead of chasing sponsorships and ads, AVALON will be 100% supported by its listeners. A standalone subscription, not connected to Above Avalon membership, will be just $10 per month (or $100 per year). If you know someone who would be interested in the podcast, especially if they are new to Above Avalon, word of mouth is greatly appreciated. AVALON price discounts are available for Above Avalon members. If you have the Podcasts add-on, AVALON will be free. If you don’t have the Podcasts add-on, AVALON will be just $6 per month (or $60 per year) - you can use this form to sign up.
All members with the Podcasts add-on attached to their membership prior to Wednesday were sent a welcome email from “Neil Cybart (via Transistor)” on Thursday. To listen to AVALON, open that welcome email and select your preferred podcast player. One way of knowing that everything is up and running is you will see a short sneak peek episode appear in your podcast player. For members who recently filled out forms to either attach the Podcasts add-on to their membership (form available here) or subscribe to AVALON (form available here), those requests will continue to be fulfilled today (Friday) and tomorrow (Saturday). Thank you for your patience during this initial rush period.
With that, let’s jump into today’s update.
Takeaways From Apple’s New App Store Study
Yesterday, Apple released a new App Store study. Similar reports have been published over the years. Like the prior reports, this latest report was funded by Apple.
Two points that Apple wanted to draw attention to:
Most billings and sales facilitated by the App Store involve no commission being paid to Apple. Instead of this being a new disclosure or development, it’s a fact that continues to fly under the radar. Likely due to the news flow revolving around high-profile App Store courtroom battles, consensus likely assumes most developers pay Apple via in-app purchases (IAP) to have their apps available in the App Store. The courts and regulators have focused primarily on IAP (App Store “billings”) as large companies try their best to wrestle power away from Apple to earn more money – it’s always been about the money with these companies despite PR campaigns that say otherwise. The numbers suggest less than 10% of U.S. billings and sales facilitated by the App Store involve a commission being paid to Apple. The report defines billings as payments tied to app monetization (paid downloads, IAP etc.) while sales, a much larger total, refers to payments spent on buying goods and services.
U.S. developers saw earnings double over the last five years.
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Anduril Partners With Meta on Military Headsets, A Headset Drought?, Apple Is Needed (Once Again)
Hello everyone. We will kick off today’s update with an interesting tie-up between Anduril Industries, a U.S. weapons manufacturer, and Meta. The discussion will then turn to a few broader points regarding the headset industry.
Let’s jump right in.
Anduril Partners With Meta on Military Headsets
In a press release issued on May 29th, here’s Anduril:
“Anduril and Meta are partnering to design, build, and field a range of integrated XR products that provide warfighters with enhanced perception and enable intuitive control of autonomous platforms on the battlefield. The capabilities enabled by the partnership will draw on more than a decade of investment by both companies in advanced hardware, software, and artificial intelligence. The effort has been funded through private capital, without taxpayer support, and is designed to save the U.S. military billions of dollars by utilizing high-performance components and technology originally built for commercial use.
This partnership comes at a pivotal moment in the evolution of national defense. America’s national security has benefited from U.S. technological leadership at every phase of the computing revolution, from the first microchips and PCs to today’s internet and mobile devices. As a new era of computing takes shape—built atop AI and body-worn devices—Meta and Anduril are committed to maintaining America’s technological edge while reinforcing our economic and national security.
‘Meta has spent the last decade building AI and AR to enable the computing platform of the future,’ said Mark Zuckerberg, Founder and CEO of Meta. ‘We’re proud to partner with Anduril to help bring these technologies to the American servicemembers that protect our interests at home and abroad.’”
My initial reaction to this news: Meta is willing to further dilute its HW focus, which is already diffused across what are likely too many unreleased products and categories, to now work on military technology with a weapons manufacturer. Across Silicon Valley, the concept of focusing remains highly underrated. Instead, accolades and applause are being handed out far too easily to companies that simply announce things.
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OpenAI COO Talks Screenless Devices, OpenAI’s Strategy Document From 2024, Apple Appeals EU Interoperability Rules
Happy Tuesday.
My original plan to finalize Monday’s update after spending a few hours at the local amusement park for an end-of-year school event didn’t exactly go to plan. I can say with confidence that I have officially reached the “Dad probably should think twice about going on that ride” age. What was supposed to be Monday’s update is now ready. We will simply shift the updates back a day this week.
My new audio podcast, AVALON, launches today. The first episode will likely be out by time you read this email.
Based on a few incoming member questions regarding AVALON and Above Avalon membership, it’s worth clarifying a few things. Please bear with me as odds are good other members may have similar questions. I want to make sure this information is seen.
AVALON is my all-new, paid audio podcast ($10/month or $100/year) available as a standalone subscription. This means someone who isn’t an Above Avalon member can subscribe just to AVALON for $10/month or $100/year.
AVALON, my first unscripted podcast, is very different from these daily updates (officially called the Above Avalon Daily newsletter and the cornerstone of Above Avalon membership). The two utilize dramatically different creation processes and consumption patterns.
Listening to AVALON as a member. For Above Avalon members who are interested in listening to AVALON, to avoid needing to keep track of two different subscriptions, the podcast can be bundled with your Above Avalon membership at a special rate (just +$6/month or +$60/year). This isn’t too different from Above Avalon members bundling an Inside Orchard subscription with their membership at a special rate (just +$5/month or +$50/year).
Using add-ons to customize your membership. From Day 1, Above Avalon memberships have been anchored by these written daily updates (1,800+ have been published to date). There is no change to that dynamic. Over the years, members have seen a growing number of ways to customize membership to suit different interests, workflows, and schedules.
This is accomplished by attaching add-ons to one’s membership:
Inside Orchard – my broader views on tech available via written essays and audio podcast (+$5/month or +$50/year – 50% off). Fill out this form to attach the add-on to your membership.
AVALON – a weekly, unscripted podcast about Apple product strategy and analysis – loosely modeled after Apple’s Monday morning meetings (+$6/month or +$60/year – 40% off). Fill out this form to attach the add-on to your membership.
Podcasts - listen to two podcasts (Above Avalon Daily + AVALON) +$10/month or $100/year. This is a huge increase in value-add found with the add-on, as the Above Avalon Daily podcast was previously $10/month or $100/year on its own. Fill out this form to attach the add-on to your membership.
Financial Models – access my earnings model and three installed base models (iPhone, iPad, and Apple Watch) +$850/year. If you have the Podcasts and Inside Orchard add-ons, you get a $150 discount. Fill out this form to attach the add-on to your membership.
In summary:
Above Avalon membership (access to the daily newsletter called Above Avalon Daily, the archive, and other benefits including email access)
Inside Orchard add-on (access to everything at InsideOrchard.com)
AVALON add-on (access to the all-new AVALON podcast)
Podcasts add-on (access to both the AVALON podcast and Above Avalon Daily podcast - the daily newsletter in audio form)
Financial Models add-on (access to four of my Apple financial models)
If you have questions, please shoot them my way. Also, if at any time you would like information about your membership and are unsure about the add-ons that you may or may not have, reach out - email works fine, although you can DM on Discord as well.
Let's jump into today's update with OpenAI.
OpenAI COO Talks Screenless Devices
Here’s the WSJ:
“OpenAI Chief Operating Officer Brad Lightcap said the AI revolution has ushered in an opportunity to create a new set of devices.
Lightcap, speaking at The Wall Street Journal’s Future of Everything event on Thursday, said that OpenAI is focused on building AI that is ‘truly personal.’
Right now, users access ChatGPT through web browsers and apps on a smartphone. OpenAI wants to build an ‘ambient computer layer’ that can detach people from always having to be looking at a screen, he said. ‘There’s a lot that we have to do to develop models to succeed in that environment.’
Lightcap said he has ‘no idea’ what device Chief Executive Sam Altman is working on with former Apple designer Jony Ive. The pair announced earlier this month that OpenAI is acquiring Ive’s company io in an all-equity deal that values it at $6.5 billion."
This 28-minute interview (available here via YouTube) provided a good summary of how OpenAI is thinking about business strategy. One reason the talk jumped out at me is Lightcap didn’t come across as trying to sell me something which is common in many AI-focused chats and talks.
Become a member to continue reading today’s update. Already a member? Read the full update here.
An audio version of this update is available to members who have the podcast add-on attached to their membership.
Member Privileges and Benefits
Become an Above Avalon member and receive the following privileges and benefits:
Exclusive Analysis. Receive the Above Avalon Daily newsletter, widely-recognized as the leading daily newsletter dedicated to Apple. Now in its tenth year.
Archive Access. Access previous newsletters sent to members.
Member Forum Access. Access all channels in the Above Avalon forum in Discord.
Email Access. Receive timely responses from Neil to email inquiries.
Access to Add-ons. Customize a membership with the Podcast, Inside Orchard, and Financial Models add-ons.
Above Avalon Support. Play an active role in supporting Above Avalon as an independent voice and resource.
Introducing AVALON, an all-new podcast about Apple from Neil Cybart
This is a fascinating time for Apple. The company is opening new chapters with spatial computing and personal intelligence. Looking ahead, the next 10 years will be incredibly intriguing. However, it doesn’t feel like it in the Apple community.
Many long-time voices in the space seem tired. This has led to podcasts filled with complaining more than anything else. Some podcasters have seemingly lost touch with their audiences. It’s time for fresh, down-to-earth voices. That is why I am starting a new podcast called AVALON. (Check out the website here.)
This is my first unscripted podcast. It's loosely modeled after Apple’s Monday morning meetings in which the senior executive team goes over the entire business.
Each week, the discussion will be anchored on Apple products. There will be plenty of product strategy and industry analysis talk as well as personal observations and perspective. We will also have time to talk about other topics and hear from AVALON listeners.
Join me on this new journey. The first episode will go live on Tuesday, June 3rd. New episodes will be released every Tuesday.
Instead of depending on sponsorships or ads which would make me chase listener growth, AVALON will be 100% supported by its listeners. For non-members, a subscription will be $10 per month or $100 per year. You can use the following payment forms below:
For Above Avalon members with the Podcasts add-on attached to their membership, the AVALON podcast will be free. This marks a significant expansion in value found with the Podcasts add-on, which will now provide access to two exclusive podcasts (Above Avalon Daily and AVALON). If you have the Podcasts add-on, you will receive an email from “Neil Cybart (via Transistor)” that will allow you add the AVALON podcast to your favorite podcast player. For those of you without the Podcasts add-on, you can attach the add-on to your membership by filling out the form available here.
Members without the Podcasts add-on receive a large 40% discount on AVALON (just $6 per month or $60 per year). The special pricing represents more value flowing to your underlying membership. Fill out the form available here to sign up for AVALON at $6 per month or $60 per year.
Check out a quick video recapping this announcement here (YouTube) or here(AboveAvalon.com)
- Neil
Apple Acquires RAC7 Gaming Studio, Meta to Open Stores to Sell Wearables, A Retail Wild Card
Happy Wednesday.
Thank you for the comments and sign-ups regarding my new podcast, AVALON. An unscripted podcast is something that has been on my mind for a very long time. It’s new territory for me, and I’m ready for the journey.
Given today’s launch and the backlog of online registration forms for the Podcasts add-on and AVALON, it will take a little bit of time to get everyone who either already has the Podcasts add-on or who recently filled out a registration form up and running with the new podcast. This is one reason for unveiling AVALON a few days prior to the first episode going live (Tuesday, June 3rd).
On to today's update.
Apple Acquires RAC7 Gaming Studio
Here’s Digital Trends:
“Apple has acquired RAC7, the two-person video game developer behind Apple Arcade hit Sneaky Sasquatch. This is the first time that Apple has acquired a video game studio in its history, but the company describes the move as a unique situation.
RAC7 is a two-person studio whose previous credits include indie titles Dark Echoand Splitter Critters. In 2019, the team released Sneaky Sasquatch as an Apple Arcade exclusive. The adventure game was a breakout hit among the service’s 71 launch titles, according to Apple, and it has received regular updates since launch. Now, the team will continue its partnership with Apple as an internal studio.
‘We love Sneaky Sasquatch and are excited that the 2-person RAC7 team has joined Apple to continue their work on it with us,’ an Apple spokesperson tells Digital Trends. ‘We will continue to deliver a great experience for Apple Arcade players with hundreds of games from many of the best game developers in the world.’”
According to Digital Trends, Apple signaled that this was a unique circumstance rather than a broader shift in gaming strategy. We shouldn't expect Apple to now go on a gaming studio shopping spree.
Become a member to continue reading today’s update. Already a member? Read the full update here.
An audio version of this update is available to members who have the podcast add-on attached to their membership.
Member Privileges and Benefits
Become an Above Avalon member and receive the following privileges and benefits:
Exclusive Analysis. Receive the Above Avalon Daily newsletter, widely-recognized as the leading daily newsletter dedicated to Apple. Now in its tenth year.
Archive Access. Access previous newsletters sent to members.
Member Forum Access. Access all channels in the Above Avalon forum in Discord.
Email Access. Receive timely responses from Neil to email inquiries.
Access to Add-ons. Customize a membership with the Podcast, Inside Orchard, and Financial Models add-ons.
Above Avalon Support. Play an active role in supporting Above Avalon as an independent voice and resource.
Trump Goes After Tim Cook, Apple’s PR Win, What’s the Solution?
Hello everyone. We get back into the swings of things with iPhone production, India, and President Trump going after Tim Cook. Let’s jump right in.
Trump Goes After Tim Cook
Here’s the WSJ:
“President Trump fired new salvos in the global trade war on Friday, threatening a 50% tariff on imported goods from the European Union and new duties on iPhones and other smartphones made overseas.
Trump said the EU had been ‘very difficult to deal with’ on trade in a Friday morning social-media post. Less than a half hour earlier, he threatened Apple and its chief executive, Tim Cook, with a tariff of at least 25% on iPhones made overseas.
‘I have long ago informed Tim Cook of Apple that I expect their iPhone’s that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else,’ he wrote on Truth Social.
‘If that is not the case, a Tariff of at least 25% must be paid by Apple to the U.S.,’ the president wrote.
Later on Friday, in Oval Office comments, Trump said those tariffs will include ‘Samsung and anybody that makes that product, otherwise it wouldn’t be fair.’ Trump appeared to be referring to companies that manufacture smartphones outside of the U.S. He added that the tariffs would likely be imposed in late June.”
The development that likely led to this latest battle was news of Apple ramping iPhone production in India. For an administration that has been pushing a narrative involving firms embracing U.S. manufacturing, reports of Apple increasing its bet on India for iPhone production likely didn’t go over well.
Become a member to continue reading today’s update. Already a member? Read the full update here.
An audio version of this update is available to members who have the podcast add-on attached to their membership.
Member Privileges and Benefits
Become an Above Avalon member and receive the following privileges and benefits:
Exclusive Analysis. Receive the Above Avalon Daily newsletter, widely-recognized as the leading daily newsletter dedicated to Apple. Now in its tenth year.
Archive Access. Access previous newsletters sent to members.
Member Forum Access. Access all channels in the Above Avalon forum in Discord.
Email Access. Receive timely responses from Neil to email inquiries.
Access to Add-ons. Customize a membership with the Podcast, Inside Orchard, and Financial Models add-ons.
Above Avalon Support. Play an active role in supporting Above Avalon as an independent voice and resource.
OpenAI Buys Jony Ive's HW Startup, OpenAI’s First HW Product, Connecting the OpenAI HW Dots
Happy Thursday. We will dedicate a full update to the Jony Ive / OpenAI news. The update begins with a little bit of background on what Jony Ive has been up to since Apple. We will then talk about yesterday’s news, including what was quite the interesting announcement video put out by OpenAI, and what will likely be OpenAI’s first HW product.
Let’s jump in.
OpenAI Buys Jony Ive's HW Startup
Since leaving Apple in 2019, Jony has been running LoveFrom, a design consultancy he started with Marc Newson. LoveFrom, which poached a decent number of Apple employees, has a handful of high-profile clients including Airbnb and Ferrari. While the company has garnered some headlines here and there, the overall vibe has been very much a team of creatives quietly working behind the scenes on interesting projects and products.
In 2023, rumors began to circulate that Jony was working with OpenAI CEO Sam Altman on AI devices. The rumors were surprising, to put it mildly, given the hoopla surrounding OpenAI. Last year, there were reports of Jony and former Apple designers starting a new HW company dedicated to working on AI devices with OpenAI. The company was seeking $1B in funding.
Become a member to continue reading today’s update. Already a member? Read the full update here.
An audio version of this update is available to members who have the podcast add-on attached to their membership.
Member Privileges and Benefits
Become an Above Avalon member and receive the following privileges and benefits:
Exclusive Analysis. Receive the Above Avalon Daily newsletter, widely-recognized as the leading daily newsletter dedicated to Apple. Now in its tenth year.
Archive Access. Access previous newsletters sent to members.
Member Forum Access. Access all channels in the Above Avalon forum in Discord.
Email Access. Receive timely responses from Neil to email inquiries.
Access to Add-ons. Customize a membership with the Podcast, Inside Orchard, and Financial Models add-ons.
Above Avalon Support. Play an active role in supporting Above Avalon as an independent voice and resource.
My Thoughts on Google I/O 2025
Hello everyone. Today’s update will be dedicated to discussing Google I/O. The company kicked off its annual developer conference yesterday. Let’s jump right in.
My Thoughts on Google I/O 2025
The overall message from Google’s I/O keynote (available to watch here) was that the world is adopting AI, and Gemini is Google’s primary AI vessel. Similar to last year, the company included a gag slide at the end of its nearly two-hour presentation that pointed out the number of times certain words were mentioned on stage. Gemini (95) beat AI (92). At last year’s I/O keynote, AI was said 121 times.
In pushing the “AI research is turning into reality” theme, Google gave quick updates regarding three Google DeepMind examples:
Project Starline. Rebranded as Google Beam, a “AI-first video communication platform” that turns 2D video into a 3D video stream. Google will partner with HW on the required HW for what looks to be enterprise solutions.
Project Astra. All about building a universal AI assistant that understands the world around us thanks to mobile (and eventually wearable) cameras.
Project Mariner. A web-browsing AI agent that acts on users’ behalf. Available to Google AI Ultra subscribers ($250/month).
In terms of broader product-focused sections or themes to the keynote, there were three (Google held a separate event for Android a few days earlier):
Become a member to continue reading today’s update. Already a member? Read the full update here.
An audio version of this update is available to members who have the podcast add-on attached to their membership.
Member Privileges and Benefits
Become an Above Avalon member and receive the following privileges and benefits:
Exclusive Analysis. Receive the Above Avalon Daily newsletter, widely-recognized as the leading daily newsletter dedicated to Apple. Now in its tenth year.
Archive Access. Access previous newsletters sent to members.
Member Forum Access. Access all channels in the Above Avalon forum in Discord.
Email Access. Receive timely responses from Neil to email inquiries.
Access to Add-ons. Customize a membership with the Podcast, Inside Orchard, and Financial Models add-ons.
Above Avalon Support. Play an active role in supporting Above Avalon as an independent voice and resource.
Meta 1Q25 Earnings, Zuckerberg’s Five AI Opportunities, Meta is CoComelon for Adults
Hello everyone. We will use today’s update to circle back to Meta’s latest earnings report. The company reported earnings a few weeks ago. While Meta is the most direct competitor to Apple among Big Tech companies, there are some signs of the companies’ product paths, which have been getting closer to each other, potentially staying apart.
Meta 1Q25 Earnings
The big picture was very much intact with Meta’s 1Q25 earnings. Digital ads strength is more than offsetting atrocious losses in Reality Labs.
With 1Q25 revenue up 16% and costs up 9%, Meta’s operating margin grew to 41% from 38%. As previously disclosed, the company benefited from an “extension of server useful lives.” Said another way, depreciation wasn’t as bad as it otherwise would have been. Ad impressions were up 5% (primarily Asia-Pacific) while average price per ad was up 10%.
One additional point regarding expenses: Meta’s general and administrative expense fell by a whopping 34% year-over-year – a $1.2B drop – due to lower legal costs. That helped to offset more than half of the year-over-year increase in R&D (+22%).
Become a member to continue reading today’s update. Already a member? Read the full update here.
An audio version of this update is available to members who have the podcast add-on attached to their membership.
Member Privileges and Benefits
Become an Above Avalon member and receive the following privileges and benefits:
Exclusive Analysis. Receive the Above Avalon Daily newsletter, widely-recognized as the leading daily newsletter dedicated to Apple. Now in its tenth year.
Archive Access. Access previous newsletters sent to members.
Member Forum Access. Access all channels in the Above Avalon forum in Discord.
Email Access. Receive timely responses from Neil to email inquiries.
Access to Add-ons. Customize a membership with the Podcast, Inside Orchard, and Financial Models add-ons.
Above Avalon Support. Play an active role in supporting Above Avalon as an independent voice and resource.
The WSJ’s Sketchy iPhone Pricing Article, Does Apple Need Higher iPhone Pricing?, Does iPhone 16e Provide Pricing Clues?
Happy Monday. We will jump into today's update with a recent story from the WSJ regarding iPhone pricing. Let's jump right in.
The WSJ’s Sketchy iPhone Pricing Article
Here’s the WSJ:
“Apple is weighing price increases for its fall iPhone lineup, a step it is seeking to couple with new features and design changes, according to people familiar with the matter.
The company is determined to avoid any scenario in which it appears to attribute price increases to U.S. tariffs on goods from China, where most Apple devices are assembled, the people said.
The U.S. and China agreed Monday to suspend most of the tariffs they had imposed on each other in a tit-for-tat trade war. But a 20% tariff that President Trump imposed early in his second term on Chinese goods, citing what he said was Beijing’s role in the fentanyl trade, remains in place and covers smartphones.
Trump had exempted smartphones and some other electronics products from a separate ‘reciprocal’ tariff on Chinese goods, which will temporarily fall to 10% from 125% under Monday’s trade deal.
New iPhones set to be released in the fall include some design and format changes, including an ultrathin design, The Wall Street Journal has reported.”
Nothing found in this article makes me think the WSJ knows what Apple may or may not do with this year’s new flagship iPhones. The WSJ’s “sources” in the supply chain are not going to know Apple’s iPhone pricing strategy. Apple pricing rumors should be discounted in general as Apple is able to keep pricing information under wraps.
For the past few years, price increases have been rumored ahead of Apple’s busy fall release cycle.
Become a member to continue reading today’s update. Already a member? Read the full update here.
An audio version of this update is available to members who have the podcast add-on attached to their membership.
Member Privileges and Benefits
Become an Above Avalon member and receive the following privileges and benefits:
Exclusive Analysis. Receive the Above Avalon Daily newsletter, widely-recognized as the leading daily newsletter dedicated to Apple. Now in its tenth year.
Archive Access. Access previous newsletters sent to members.
Member Forum Access. Access all channels in the Above Avalon forum in Discord.
Email Access. Receive timely responses from Neil to email inquiries.
Access to Add-ons. Customize a membership with the Podcast, Inside Orchard, and Financial Models add-ons.
Above Avalon Support. Play an active role in supporting Above Avalon as an independent voice and resource.