Neil Cybart 10/25/23 Neil Cybart 10/25/23

Tesla 3Q23 Earnings, Musk Realism, What Happened to Tesla CFO Kirkhorn?

Hello everyone. We will continue our earnings discussion today with Tesla.

Earlier today, Apple announced an upcoming online event on Monday evening (8 pm ET). I believe this is the first time Apple is holding an 8 pm event. Based on the following images, the Mac will be in the spotlight.

My initial thought was that the 8 pm ET time suggests the event is being held when more people will be watching it on their TV sets at home. This would imply some Apple TV+ announcements to go along with Mac news.

Tesla 3Q23 Earnings

For the past few quarters, there have been an elevated number of questions surrounding the Tesla story. Elon Musk’s decision to slash vehicle pricing was a sign of slowing demand (lower pricing is said to offset higher monthly financing costs). This has put Tesla’s +50% vehicle sales growth (annual) target in jeopardy.

The big takeaway from Tesla’s 3Q23 earnings is that the company’s auto growth story continues to evaporate. Musk thinks the difficult operating environment will continue as long as interest rates stay where they are.

Musk is now saying that Tesla is “hitting law of large numbers situations” as they run out of people who can afford Tesla vehicles. Musk, who for the first time said Tesla will do some limited advertising, doesn’t think advertising will help as Tesla would be informing people of a car that they can’t afford. It’s “a big deal,” he says.

The average cost of a Tesla vehicle was

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Neil Cybart 10/23/23 Neil Cybart 10/23/23

Netflix’s Jam-Packed Earnings, The Dramatic Turn In Netflix’s Content Spend, Wall Street Helps Netflix

Hello everyone. Welcome to a new week. We kick off our 3Q23 earnings season coverage with Netflix. As one of the first companies to report, the company will set the tone for what are the latest trends in the paid and ad-supported video streaming space. Let's jump right in.

Netflix’s Jam-Packed Earnings

There was a lot of information and updates stuffed into Netflix’s 3Q23 earnings. The overall theme: Change is in the air.

Consider the following news:

Licensing. In what may come as a surprise, Netflix is once again talking up licensed content. The company put a lot of attention on “Suits.” The show’s popularity, despite the fact that it was released in 2011 and did not even have its final season available on Netflix, boils down to Netflix pushing it in front of a lot of its subscribers. In my view, it’s a sign of how many Netflix subscribers just want something to keep them entertained. It doesn’t have to be new content. Licensing is a relatively easy way for Netflix to keep engagement going (124 43-minute episodes across eight seasons is A LOT of content) while also being financially attractive in comparison to original programming associated with larger up-front costs.
Sports. Netflix is apparently now the “go-to place for anyone excited by the drama of sport…” Here’s a longer quote from co-CEO Ted Sarandos: “We are in the sports business, but we're in the part of the sports business that we bring the most value to, which is the drama of sport.” This comes across as spin to me. Netflix is now playing in sports because they have a few sports movies? Hmm. Meanwhile, Netflix will be airing

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Neil Cybart 10/19/23 Neil Cybart 10/19/23

Disney Reveals ESPN Profitability, Revisiting ESPN’s Valuation, NBA Looking For Streaming Partners

Hello everyone.

Tech earnings season has begun. The game plan is to begin going over the most interesting reports related to Apple next week. For today, we will go into the sports world as Disney broke out ESPN’s financials for the first time. This will then bring us to reporting that pegs the NBA as wanting to partner with tech companies for its upcoming media-rights auction. Let’s jump in.

Disney Reveals ESPN Profitability

Here’s the WSJ:

“Profits from Disney’s sports segment, home to ESPN, declined 20% in the first nine months of its fiscal year, according to a new filing Wednesday that offers a clearer look at the toll cord-cutting is taking on the business.

Operating income for the newly reported sports segment fell to $1.48 billion in the nine months ended July 1, while revenue declined 1.3% to $13.2 billion. The unit includes ESPN and related channels, Disney’s ESPN+ streaming service and Star-branded sports channels in India.

Profits from ESPN-branded TV networks, ESPN programming on the ABC network and ESPN+ fell 7.8% to $2.06 billion in those nine months. The company shared more-detailed financial results for the business as it seeks a potential strategic partner to help shape the future of ESPN’s content and distribution.”

One reason Disney is making this financial disclosure change is to separate struggling businesses, such as linear networks, from what Disney views as its growth engines. It’s along the same general idea of Alphabet separating Other Bets losses from Google proper. The change in disclosure will also streamline Disney’s talks with potential suitors and partners regarding asset sales and divestures.

Within the new Disney Sports segment, the company includes various sports-related businesses and segments into one.

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Neil Cybart 10/18/23 Neil Cybart 10/18/23

Schools Begin to Question Chromebooks, Apple’s Evolving Strategy for Education, Revisiting iPad Unit Sales

Hello everyone.

As is often the case, a recent news event opened the door to a discussion that didn’t quite fit in with the prior news cycle. Yesterday, we talked about the new Apple Pencil (USB-C). This led to a broader look at the iPad. Back in late August, a WSJ article about Chromebooks appeared on my radar. It’s a great time to look back at that article in context of Apple’s iPad strategy. The discussion includes a look at iPad unit sales trends and Apple’s evolving iPad strategy for education.

Let’s jump right in.

Schools Begin to Question Chromebooks

Here’s the WSJ’s Nicole Nguyen:

“Low-price, easy-to-use Chromebooks were once a boon to cost-conscious schools. Educators say the simple laptops are no longer a good deal.

Models have shot up in price in the past four years. Constant repairs add to the cost. Google imposes expiration dates, even if the hardware still works. This year, Google ceases support for 13 models. Next year, 51 models will expire.

These surging costs are presenting a predicament for anyone who runs a school and wants to educate children. Some administrators say they are throwing precious funding at a product that just doesn’t last long enough. Doubling the lifespan of Chromebooks could save public schools—and taxpayers—an estimated $1.8 billion, according to U.S. PIRG, a public-interest research group that analyzed Chromebook data.

Chromebooks have no second life. When they expire, they become e-waste. By contrast, Macs and PCs can run apps even after their native software is no longer supported. They can even be repurposed into Chromebook-like devices.”

While the article was filled with anecdotes, the broader thesis regarding rising costs associated with Chromebooks usage over time rings true. In the face of higher inflation and interest rates, there has been a broader move across the industry to place greater emphasis on a device’s longevity and residual value. It’s been a key focus area for Apple as better device durability and longevity lead to higher customer satisfaction and loyalty, even if it means less frequent upgrading.

Concerns involving rising cost of ownership and inadequate device longevity would represent the first kind of pushback against Chromebooks that actually has some legs. There are a few factors at play here.

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Neil Cybart 10/17/23 Neil Cybart 10/17/23

Apple Unveils Apple Pencil (USB-C), The (Expanding) Apple Pencil Line, The Apple Pencil Strategy

Hello everyone. Apple unveiled a new Apple Pencil today via press release. The product has once again raised questions regarding Apple’s iPad strategy. There are several topics to discuss.

Let’s jump in.

Apple Unveils Apple Pencil (USB-C)

Here’s Apple:

“Today, Apple is bringing more choice to iPad users with a new, more affordable Apple Pencil. With pixel-perfect accuracy, low latency, and tilt sensitivity, the new Apple Pencil is ideal for note taking, sketching, annotating, journaling, and more. Designed with a matte finish and a flat side that magnetically attaches to the side of iPad for storage, the new Apple Pencil pairs and charges with a USB-C cable. The new Apple Pencil will be available beginning in early November.

'Apple Pencil has revolutionized note taking, sketching, and illustrating, unleashing endless possibilities for productivity and creativity,' said Bob Borchers, Apple’s vice president of Worldwide Product Marketing. 'Combined with the versatility of iPad, the new Apple Pencil unlocks another great option to experience the magic of digital handwriting, annotation, marking up documents, and more.'"

It may be tempting to think that the inclusion of a USB-C charging port means this is the new Apple Pencil aimed at all iPad users. However, Apple isn’t calling this new pencil Apple Pencil (3rd gen). Instead, it’s Apple Pencil (USB-C). This tells us that the new Apple Pencil is targeted at a segment of the iPad installed base – specifically those

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Neil Cybart 10/16/23 Neil Cybart 10/16/23

Apple as a Search Trojan Horse, My Estimates for Google TAC Payments to Apple, Potential Court Impact on Apple Search Revenue

Hello everyone.

Last Wednesday, we discussed the key points regarding the U.S. Justice Department’s courtroom battle against Google. Apple’s default search deal with Google is in the crosshairs. There is room to expand on the topic in a few directions. We go over Neil’s estimates for how much Apple makes from Google TAC. In addition, we discuss the potential impact on Apple’s search revenue if the court rules against Google.

Let’s jump right in.

Apple as a Search Trojan Horse

Over at The Verge, editor-at-large David Pierce wrote about the Google/Apple search deal. Pierce thinks the contract is the “most important” one in tech and has played a major role in shaping today’s online economy.

Here’s Pierce:

“Apple has set Google as the default search engine in Safari across its products for more than 20 years, since the browser’s very first launch in 2003. Over the years, the deal has morphed into a revenue sharing system that sees Google reportedly pay Apple more than $10 billion a year to remain the default. That money or the fact that Google is the best search engine — or some combination of the two, depending on who you ask — has kept Apple from building its own search product, switching to a Google competitor, or allowing users to choose a browser when they set up their phone…

Becoming the default search engine in Safari is a surefire way to get massive global scale. But the [U.S. vs. Google] trial makes clear it’s not just that more users means more searches means more ads means more money. Apple is a dominant player on mobile in particular — it owns about half the smartphone market in the US, and globally, it’s the only meaningful competition to Android, which, of course, Google already owns and controls. The only way any competitor could quickly access many millions of users, and thus the most important moat for Google to protect, is through Safari on iOS.”

The article was worthwhile to read in its entirely, although there were a few parts that caused me to shake my head in disagreement.

While Pierce doesn’t come out and say it, the argument that iOS is the only way to “quickly access many millions of [search] users” against Google amounts to positioning iOS as a search Trojan Horse.

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Neil Cybart 10/13/23 Neil Cybart 10/13/23

Thoughts on Google’s “Made by Google” Event, The Apple vs. Google Awkwardness

We kick things off with Neil’s thoughts on Google’s “Made by Google” event in NYC. The discussion goes over how Apple’s relationship with Google is becoming complicated (again). Let’s jump right in.

Thoughts on Google’s “Made by Google” Event

Last week, Google held its annual fall product event. A video of the presentation is available here. Google’s event came at the tail end of what has been a very busy two months. There is a limited window for Big Tech to host product events and launch new products in time for the holidays.

In what has become a theme with many of this year’s tech events, Google kicked things off by saying 2023 has been the year of AI breakthroughs and research. Rick Osterloh, who oversees Google’s hardware play, said he has never seen anything like the speed of innovation taking place at Google.

Last year, Google emphasized screens, device ecosystems, and smartwatches. While those items remained a focus last week, Google dialed up the AI talk. Google looks at hardware as a vehicle for showing off the company’s AI acumen. As shown in the following side, AI is right up there with hardware and software.

It’s difficult to see those three elements truly

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Neil Cybart 10/11/23 Neil Cybart 10/11/23

U.S. vs. Google, Apple in the Crosshairs, Satya Nadella Cries Wolf

Hello everyone. Today’s update is focused on the U.S. vs. Google search antitrust trial taking place in Washington. We begin with a brief summary of the trial. The discussion then turns to Neil’s thoughts on Eddy Cue’s and Satya Nadella’s testimonies.

U.S. vs. Google

Last month, the Justice Department’s civil trial against Google kicked off in Washington. The trial is focused on Google search with a spotlight put on Google’s deal with Apple to be default search on Safari.

The argument being made by the U.S. Justice Department is that these default search deals have helped Google prevent competitors, like Microsoft, from getting search queries and therefore the ability to improve their own search product(s). The agreements with Apple etc. are also said to hurt innovation as Google doesn’t need to do as much to maintain its search position since it can simply pay for continued prioritized access to users. All of this is alleged to result in higher prices for advertisers and less choice for consumers.

Google’s response is that it has the best search product in the marketplace. As it pertains to the Apple deal,

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Neil Cybart 10/10/23 Neil Cybart 10/10/23

Eddy Cue on Apple’s Sports Strategy, Apple’s Challenges With Sports, Meta Layoffs Hit Custom Silicon Unit

Hello everyone. Let's jump right into today's discussion.

Eddy Cue on Apple’s Sports Strategy

In a 3,900-word GQ Sports profile titled “Inside Apple’s Plan to Change the Way We Watch Sports,” here’s Sam Schube:

“The man leading Apple’s push into the wild, lucrative world of live sports broadcasting is Eddy Cue. Cue has worked at Apple since 1989, and cuts an interesting figure at a company defined by its low-key, minimalist culture. He is plainspoken, and quick to joke. He is also an enormous sports fan, frequently popping up at the biggest games on the planet. Perhaps most importantly, he is the guy Apple has tasked with an increasingly important piece of its future: as the senior vice president of the company’s services division, his portfolio includes just about everything Apple sells that isn’t a piece of hardware…

One critical part of Cue's portfolio is Apple TV+, the company’s entrant in the streaming wars. And in this war, sports have emerged as a vital weapon. In our ever-more-fractured entertainment landscape, live sports represent perhaps the last best way for distributors—both tech companies like Apple and cable stalwarts like ESPN—to convene a large, reliable audience. Per Nielsen, 94 of the 100 most-watched US TV broadcasts in 2022 were sporting events, with NFL accounting for 82 of those, and 19 of the top 20.

It is Cue’s belief that sports represents an enormous opportunity for the company—and that, with a few tried-and-true Apple tweaks, the right sport can be made to feel more like a rounded-edges, design-forward Apple product. ‘We spend a lot of money, a lot of time on finding the best unscripted drama in the world. That's what we try to create in some of our shows that we do for TV+,’ he told me in the first of a few conversations this spring and summer. ‘Sports is that in spades. It's the greatest unscripted drama there is.’”

GQ offers the most in-depth look to date into Apple’s thinking regarding live sports programming. Much of this is due to the writer relying on Apple’s $2.5B 10-year deal with MLS (U.S. soccer) for examples of how Apple is approaching sports. The article, somewhat inadvertently, also raised some warning signs regarding Apple’s sports play. We will get to those shortly.

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Neil Cybart 10/6/23 Neil Cybart 10/6/23

Amazon Prime Video to Include Advertising, Apple TV+ and Advertising, Thursday Q&A

Happy Thursday. We will begin in paid streaming land and conclude with the latest installment of Thursday Q&A.

Let's jump right in.

Amazon Prime Video to Include Advertising

Here’s Variety:

“Viewers of landmark series on Amazon Prime Video like ‘The Boys’ or ‘The Marvelous Mrs. Maisel’ will soon be offered something never made available on the service before: TV commercials.

Amazon Prime Video, one of the last mainstream streaming services to eschew the injection of regular commercial breaks into its movies and shows, plans to start letting them run early next year. Amazon follows a host of other streaming hubs — including Disney+, Netflix, and Warner Bros. Discovery’s Max– that also offer ad-supported tiers, a move that suggests the world of streaming may just eventually mirror the world of traditional television in the not-too-distant future

‘The TV industry has really never been able to truly control itself when it comes to aggressive monetization,’ says Tim Hanlon, CEO of Vertere Group, a media-industry consultancy.

The company says it plans to run fewer ads on Amazon Prime Video than traditional broadcasters or broadband rivals. Four minutes per hour seems to be a benchmark for the lowest amount of ad time on a streaming platform. Commercials will first appear the U.S., U.K., Germany, and Canada in early 2024, followed by France, Italy, Spain, Mexico, and Australia later in the year. Those who want to keep Amazon Prime Video ad-free can still do so — for an additional $2.99 per month in the U.S. on top of the annual subscription to Amazon’s overall Prime service.”

There was a feeling in the air that this development was inevitable, especially given Amazon's focus on ramping up paid subscription revenue. According to Amazon, ads are being introduced on Prime Video “[t]o continue investing in compelling content and keep increasing that investment over a long period of time…”

In what has become something of a trademark in paid streaming, the addition of advertising is typically accompanied by a price increase for those who don’t want ads. In Amazon’s case, the $3/month add-on amounts to a 33% price increase to the standalone price for Prime Video.

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Neil Cybart 10/4/23 Neil Cybart 10/4/23

OpenAI and Jony Ive Discuss HW Venture, What Is AI Hardware?, Humane Provides First Look At Ai Pin

Hello everyone. Yesterday, we talked about live events. Today, we talk about AI hardware. Let's jump right in.

OpenAI and Jony Ive Discuss HW Venture

Here’s the Financial Times:

“OpenAI is in advanced talks with former Apple designer Sir Jony Ive and SoftBank’s Masayoshi Son to launch a venture to build the ‘iPhone of artificial intelligence’, fuelled by more than $1bn in funding from the Japanese conglomerate.

Sam Altman, OpenAI’s chief, has tapped Ive’s company LoveFrom, which the designer founded when he left Apple in 2019, to develop the ChatGPT creator’s first consumer device, according to three people familiar with the plan.

Altman and Ive have held brainstorming sessions at the designer’s San Francisco studio about what a new consumer product centred on OpenAI’s technology would look like, the people said.

They hope to create a more natural and intuitive user experience for interacting with AI, in the way that the iPhone’s innovations in touchscreen computing unleashed the mass-market potential of the mobile internet.

The process of identifying a design or device remains at an early stage with many different ideas on the table, they said.

Son, SoftBank’s founder and chief executive, has also been involved in some of the discussions, pitching a central role for Arm — the chip designer in which the Japanese conglomerate holds a 90 per cent stake — as well as offering financial backing.

Son, Altman and Ive have discussed creating a company that would draw on talent and technology from their three groups, the people said, with SoftBank investing more than $1bn in the venture.

Discussions are said to be ‘serious’, but no deal has been agreed, they cautioned, and it could be several months before a venture is formally announced. Any resulting hardware product is likely to take years to bring to market.”

The most surprising part of this news may be that it leaked in the first place. It’s tough to see Jony being thrilled with this kind of attention being placed on him and his design company. It's one thing to put information out there in hopes of garnering friendly press coverage which can then be used for employee hiring and other financial considerations. It's another to begin fueling high expectations that will become difficult to beat.

Upon hearing this news, my first impression was that

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Neil Cybart 10/3/23 Neil Cybart 10/3/23

U2 Opens Sphere in Las Vegas, iPhone and Live Events, Apple Vision Pro and Live Events

Hello everyone. Happy Tuesday.

Today's update will take us through a few topics. We need to first set the scene though with the Sphere, an all-new entertainment venue that rethinks live events, officially opening in Las Vegas. Our discussion will then expand to iPhone usage trends and conclude with Vision Pro.

Let's jump right in.

U2 Opens Sphere in Las Vegas

Here's The Hollywood Reporter:

“Given U2's reputation for pushing technical and creative boundaries with its live concerts, it seemed fitting that the band opened the anticipated Sphere in Las Vegas on Friday with its most ambitious and transportive live ever: an electrifying live performance and visual odyssey that unfolds on Sphere's enveloping 160,000-square-foot wraparound interior LED display.

Built for an estimated $2.3 billion, Sphere is a big gamble by MSG mogul James Dolan and Sphere Entertainment Co. (which was formed in April to combine Sphere and MSG Networks) on the future of entertainment. At 336 feet tall and 516 feet wide, the venue is now the largest spherical structure in the world, housing the largest interior and exterior wraparound LED displays. Inside, the enveloping LED display supports a high resolution of 16K, meaning that it delivers images so lifelike that it may make you feel as though you're no longer in a Las Vegas venue but transported into the visual content - something that U2 used to great effect during the two-hour show. Meanwhile, an all-new immersive sound system from Berlin-based Holoplot is configured with roughly 1,600 loudspeakers to deliver the experience to all of the seats in Sphere's challenging design.”

Sphere provides ~20,000 people experiences that include visual, audio, haptic vibrations (for 10,000 seats), temperature, scent, and wind (compressed air) components. The goal: “convince you that you are somewhere else.” One of the more intriguing aspects to the Sphere is how it changes the perspective of what constitutes a good or bad view or experience at a live event. Sure, there is still only one front row when it comes to being near the musical act. However, one is able to consume the broader (video) experience from most of the 17,500 seats.

Over the weekend, the Sphere took over social media.

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Neil Cybart 10/2/23 Neil Cybart 10/2/23

Meta Connect 2023, Two Meta Pivots, The Elephant in the Room

Hello everyone. In what has become an annual event aimed at VR/AR/metaverse developers and creators, Meta held its Connect conference last week.

For today, we will keep the discussion to what was announced and some big picture takeaways.

Meta Connect 2023

Thanks to the Apple Vision Pro unveiling at WWDC in June, there was a greater level of intrigue surrounding this year’s Meta Connect versus previous years. Ho hum product events from Amazon and Microsoft earlier in the month opened the tech news cycle a bit for Meta last week. Offsetting those positive developments, Meta previously announced its Meta Quest 3 headset on June 1st. That removed quite bit of suspense from last week’s Connect keynote. (A video of the keynote is available here via YouTube).

Mark Zuckerberg handled the first 45 minutes of the keynote. It’s become rare to see one person (CEO/founder) present so much of a tech keynote without speaker breaks or interruptions. Ken Segall and Om Malik must have been happy (check out the daily update from last Wednesday for the full story). From a theatrical perspective, Meta is no Apple. Instead of a high production video, Meta relied on its pre-pandemic keynote template that other Big Tech companies have fallen back on as well.

Meta Connect 2023 revolved around three topics:

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Neil Cybart 9/29/23 Neil Cybart 9/29/23

Microsoft’s Copilot Event, Microsoft (Quietly) Pulling the Surface Plug, Apple Is Thinking Differently

Hello everyone. Last Thursday, we talked about Amazon's product event. Today, we focus on the Microsoft event that took place last week.

Let's jump right in.

Microsoft’s Copilot Event

For Amazon’s product event, the overall theme was a smarter, more conversational Alexa with the company betting on voice as the medium to push generative AI in the home. Last Thursday, Microsoft held its annual fall event for new products in NYC. A video of the presentation is available here.

Out of the two, Microsoft’s event came across as weaker. Some people wondered if Panos Panay’s surprise departure complicated Microsoft's event plans. It's not clear how much advanced notice Panay provided Microsoft. The event did have the vibe of being thrown together at the last moment. Coming in at only 58 minutes, a good portion of which went to demos and CEO Satya Nadella's opening monologue, the presentation was lean. One wonders why Microsoft even bothered to hold an actual in-person event.

Without Panay's energy, the audience seemed to be asleep for much of the presentation.

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Neil Cybart 9/27/23 Neil Cybart 9/27/23

Apple Presentation Criticism, Attending the Apple Event, Vision Pro and Apple Events

Happy Wednesday.

Today’s update will be a bit different. There’s been something circulating in my mind since attending the Apple event earlier this month. A few recent articles about Apple’s digital presentations got me thinking more about the topic. Let’s discuss.

Apple Presentation Criticism

Ken Segall, who was involved in many iconic Apple advertising campaigns in the late 1990s and 2000s is not a fan of Apple’s virtual presentations. Here’s the beginning of his blog post published this past Monday:

“Okay, it took me forever, but I finally got around to watching the 2023 iPhone event.

Why so long? It’s all Apple’s fault. The more they announce new products in these prepackaged events, the less I feel like watching.

My viewing did not change my opinion of virtual presentations. Instead, in an odd way, it got me thinking about the power of A.I. Not that Apple used A.I. to generate the script—rather that A.I. could have written the script, and few would have noticed.

That’s because what Apple is doing is exactly what A.I. is so good at. They’re writing a script based on the show before. And the one before that. And the one before that. They’re stuck in a loop where a parade of presenters describe new products, minus any emotional connection.

ChatGBT wouldn’t break a sweat pulling that together.

To be sympathetic (for a brief moment), Apple’s pre-fab format was born of pandemic restrictions. It was the right solution at the right time. Kudos. But now, even as restrictions have been lifted, Apple chooses to self-restrict. Puzzling.”

This article came to my attention via Om Malik who like Segall does not think too highly of Apple’s virtual presentations. Interestingly, Malik doesn’t like how Apple relies on so many presenters these days. Instead, he yearns for the days when one person (Steve) handled most of the presentation.

One thing that both Segall and Malik disclosed is that

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Neil Cybart 9/26/23 Neil Cybart 9/26/23

An Apple vs. Qualcomm Refresher, Apple Extends Qualcomm Supplier Agreement, The WSJ’s Apple Modem Hit Piece

Hello everyone. Today's update will be dedicated to discussing the latest developments in the ongoing feud between Apple and Qualcomm.

We begin with a refresher on how the two companies got to where they are today regarding their multi-year license and chipset supply agreement.

The discussion then turns to Neil’s thoughts on the WSJ’s strange article about Apple’s modem efforts.

Let's jump right in.

An Apple vs. Qualcomm Refresher

(The following snippet was from the November 17th, 2021 daily update. Check out the full update here.)

With the exception of the iPhone 11 line, Qualcomm has supplied modems for at least one flagship iPhone model each year going back to 2011. Before 2011, Apple relied on Infineon chips. (Intel later acquired Infineon’s baseband chip business.) The switch to Qualcomm from Infineon was due to Apple needing a CDMA network-equipped modem for iPhone.

In 2016, Apple shocked many by including Intel modems in iPhone 7 units that used non-CDMA networks (AT&T and T-Mobile). The move was a precursor to Apple suing Qualcomm in 2017, accusing the company of a variety of things. In a nutshell, Apple went after Qualcomm’s business model, not just a few patents, or recovering missing rebates. Apple had been in a weak position, dependent on Qualcomm for its chips with little to no recourse unless it was willing to risk its iPhone and iPad businesses. Intel gave Apple the leverage to go after Qualcomm.

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Neil Cybart 9/22/23 Neil Cybart 9/22/23

Amazon’s Product Event, Missing Amazon Buzz

The update goes over Neil’s thoughts on Amazon’s product event at HQ2 in Virginia.

Hello everyone.

Following Apple’s product event last week, Amazon and Microsoft held their respective fall product events this week. Today’s update will be focused on Amazon’s event. We will cover Microsoft’s event next week.

Let’s jump right in.

Amazon’s Product Event

Heading into Amazon’s event (video here), expectations were muted. Back in August, David Limp, who has been overseeing Amazon’s consumer gadget strategy for years, announced he was leaving the company.

Late last year, Amazon announced that it was refocusing its HW efforts as part of a broader expense reduction initiative that impacted the entire company. Said another way, CEO Andy Jassy was going to adjust Limp’s portfolio. It wasn’t likely that Amazon would announce products this week that would shock and awe.

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Neil Cybart 9/21/23 Neil Cybart 9/21/23

iPhone 15 and 15 Pro Pre-orders in China, Tim Cook’s Very Strong Interview With CBS News

We begin with a closer look at how iPhone 15 and 15 Pro pre-orders have been trending in China. The discussion then turns to Tim Cook’s interview with CBS News and why Neil thought the interview was so strong for Cook.

Happy Wednesday. Let’s jump right into today’s update.

iPhone 15 and 15 Pro Pre-orders in China

Two weeks ago, the rumor about China banning government workers from using iPhones spread like wildfire. This led to broader questions about how the new flagship iPhones would be received in China.

There is some follow-up to go over regarding the iPhone “ban” in China.

A spokesperson for the Chinese Foreign Ministry said there is no ban on government workers from using iPhones. Here is the full quote: “China has not issued laws, regulations or policy documents that prohibit the purchase and use of foreign brand phones such as Apple's. But recently we did notice a lot of media exposure of security incidents related to Apple's phones. The Chinese government attaches great importance to information and cyber security and treats both domestic and foreign companies as equals."

Presumably, the "security incidents related to Apple's phones" comment is referring to the Pegasus spyware issue. However, Apple addressed that with an iOS update. Even then, the statement doesn't match what was found in the various reports about this ban.

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Neil Cybart 9/20/23 Neil Cybart 9/20/23

iPhone 15 and 15 Pro Pre-orders Observations, Microsoft HW Chief Jumps Ship, Revisiting the Gadget Recession

We kick things off with Neil’s thoughts on iPhone 15 and 15 Pro pre-orders. The discussion then turns to Panos Panay leaving Microsoft to lead Amazon’s HW efforts.

Hello everyone.

One quick follow-up to yesterday’s update.

In terms of Apple Watch Ultra, one member wondered if the collection’s case size will be a limiting factor when it comes to unit sales mix. Would a majority of Apple Watch buyers go for a 49 mm case?

It is a fair question.

Over the years, one trend that we have seen is that Apple Watch case sizes have been getting larger (38 mm -> 49mm) while weight has been addressed by lighter materials. My wrist isn’t large, and the Ultra feels just as comfortable as any other Apple Watch. An even larger Apple Watch wouldn’t scare me away. Another option would be for Apple to bifurcate the Apple Watch Ultra into multiple case sizes.

iPhone 15 and 15 Pro Pre-orders Observations

This past Friday, Apple began accepting iPhone 15 and 15 Pro pre-orders. The devices go on sale on Friday. The following delivery estimates were compiled this morning. They are estimates for unlocked iPhone models. Apple has embraced an underpromise and overdeliver mantra when it comes to delivery estimates for online orders. The stated delivery dates may end up being pulled forward.

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Neil Cybart 9/18/23 Neil Cybart 9/18/23

Thoughts on Apple Product Pricing, My iPhone and Apple Watch Sales Mix Estimates, U.S. Carriers Improve iPhone Promotions

In today’s update, we go over a few topics related to the new Apple Watches and iPhones. The discussion begins with Neil’s thoughts on new Apple Watch and iPhone pricing. We then turn to Neil’s estimates for unit sales mix by Apple Watch and iPhone model. The update concludes with U.S. carriers improving their iPhone promotions.

Hello everyone. Welcome to a new week. Let’s jump right in.

Thoughts on Apple Product Pricing

At last week's product event, no major changes to Apple’s product pricing strategy were announced. There were more than a few rumors suggesting iPhone Pro pricing was going up against the board. That did not occur. Generally, Apple pricing rumors should be discounted as Apple is able to keep pricing information under wraps.

Here is entry-level pricing for each Apple Watch collection:

Apple Watch Series SE: $249 (GPS) – did not receive any updates last week
Apple Watch Series 9: $399 (GPS)
Apple Watch Ultra 2: $799 (GPS + Cellular)

We will talk more about my sales mix expectations by Apple Watch model shortly. For now, it is important to point out how Apple is sticking with

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