Above Avalon Episode 104: Obscene Amounts of Cash

Episode 104 is dedicated to discussing how Apple's business model predisposes the company to cash generation unlike that of any other firm in Silicon Valley. The discussion begins by comparing Apple's financials to those of the leading consumer-facing technology companies. We then take a closer look at Apple's business model to see just how the company is able to generate so much free cash flow. The stationary speaker market is used as an example to demonstrate how Apple plans on making money differently than others in the space. We conclude by going over questions regarding Apple's cash machine in the future. Receive my analysis and perspective on Apple throughout the week via exclusive daily emails. To sign up, visit AboveAvalon.com/membership.

Show Notes:

Apple Has the Best Business Model for Generating Cash (weekly article)

Episode 102: Apple Cash Influence (podcast)

Episode 99: HomePod (podcast)

Episode 103: Apple Glasses Are Inevitable (podcast)

Apple 3Q17 Earnings Review (daily email for members)

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Above Avalon Episode 103: Apple Glasses Are Inevitable

Episode 103 marks the introduction of a brand new topic to the Above Avalon podcast: augmented reality glasses. All of the pieces are coming together for Apple to sell glasses. We begin the episode with the reason why now is the time to talk about Apple Glasses. The discussion then turns to the seven reasons why Apple Glasses are inevitable. This sets the scene for the big picture (a deep dive into glasses as a device, Apple's evolving thought process about glasses, and an overview of how Apple would actually sell AR glasses). Receive my analysis and perspective on Apple throughout the week via exclusive daily emails. To sign up, visit AboveAvalon.com/membership.

Show Notes:

Apple Glasses Are Inevitable (weekly article)

Apple 3Q17 Earnings Preview (daily email for members)

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Above Avalon Episode 102: Apple Cash Influence

Episode 102 has a financial tone as we discuss how Wall Street is thinking about Apple in a new way. After breaking up the last five years of Apple stock performance into four eras, we go over my theory on why Wall Street now looks at Apple's excess cash as the most influential factor impacting the stock. This means that the iPhone business is losing influence over the stock. We go over the four reasons why I think investors are now valuing Apple's future cash flows at a higher level. The episode concludes with three implications of Wall Street giving more attention to Apple's balance sheet, excess cash, and share repurchases. Receive my analysis and perspective on Apple throughout the week via exclusive daily emails. To sign up, visit AboveAvalon.com/membership.

Show Notes:

Wall Street Has Begun to Think About Apple In a New Way (weekly article)

Above Avalon Episode 90: Buying Back 50% of Apple (podcast)

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Above Avalon Episode 101: iPhone Turns Ten

This week marks the tenth anniversary of Apple launching the iPhone. Episode 101 is focused on how ten years of iPhone sales changed Apple. After going over three sets of data that stand out when thinking about the iPhone, we take a closer look at three lessons Apple learned from iPhone (ambition, control, platform). The episode concludes with a discussion of how the iPhone's legacy is already beginning to appear. Receive my analysis and perspective on Apple throughout the week via exclusive daily emails. To sign up, visit AboveAvalon.com/membership.

Show Notes:

iPhone Turns Ten (weekly article)

Above Avalon Episode 98: iPhone Evolution (podcast)

Steve Jobs introduces the first Apple Store (video)

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Above Avalon Episode 100: A Glimpse of the Mac's Future

The 100th episode of the Above Avalon podcast is dedicated to how WWDC contained clues hinting at the Mac's future. We begin by discussing how management's WWDC keynote marked a turning point in the awkward Mac stretch that has been unfolding over the past few years. We then compare the Mac portion of the keynote to the iPad portion in order to see the significant difference in tone and strategy. This difference ends up helping us map the Mac's direction. After going over some of the possible changes to the Mac line, we conclude the episode by talking about why this is unchartered territory for Apple. Receive my analysis and perspective on Apple throughout the week via exclusive daily emails. To sign up, visit AboveAvalon.com/membership.

Show Notes:

WWDC Clues Hint at Mac's Future (weekly article)

Above Avalon Episode 95: A Mac Headache (podcast)

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Above Avalon Episode 99: HomePod

I am back from San Jose and WWDC. Episode 99 is focused on the most intriguing new product at this year's WWDC: HomePod. The discussion begins with an overview of the expectations heading into last week's HomePod unveiling. Apple's sales pitch for HomePod caught quite a few people by surprise. We then go over my impressions from listening to HomePod play various music genres. The episode then turns to HomePod's value around augmented hearing in the home and the broader strategy behind the product. After discussing HomePod pricing and a few challenges Apple faces with the product, we conclude by going over Apple's overall goal for the device. Receive my analysis and perspective on Apple throughout the week via exclusive daily emails. To sign up, visit AboveAvalon.com/membership.

Show Notes:

HomePod (weekly article)

The Battle Lines in Tech are Being Redrawn (weekly article)

Above Avalon Episode 87: Change Is in the Air (podcast)

WWDC 2017 Review (member email)

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Above Avalon Episode 98: iPhone Evolution

The iPhone's role in our life doesn't remain static, but rather it evolves. Episode 98 is focused on how the iPhone has evolved over the past 10 years. We cover the major implications this ongoing evolution will have on iPhone pricing, screen size preference, upgrade trends, and demand for other Apple products. The episode concludes with a discussion on the item responsible for breeding the evolutionary process found with iPhone. Receive my analysis and perspective on Apple throughout the week via exclusive daily emails. To sign up, visit AboveAvalon.com/membership.

Show Notes:

iPhone Evolution (weekly article)

Video of Steve Jobs Introducing Original iPhone in 2007 (YouTube)

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Above Avalon Episode 97: Apple Wearables Are a Thing

In episode 97, we discuss one of the major themes from Apple's 2Q17 earnings report. There were a number of interesting observations found in the "Other Products" line item. In particular, Apple wearables (Apple Watch, AirPods, Beats headphones) sold quite well. After going over the methodology I used to derive 2Q17 Apple Watch and AirPods unit sales, we discuss the best way to put Apple wearables sales into context. It turns out Apple wearables outsold iPhone over the first two years on the market. We also discuss why the wearables discussion should be about more than just Apple Watch and the impact a wearables platform will have on adoption trends. The episode concludes with some thoughts on Apple wearables sales over the upcoming year. Receive my analysis and perspective on Apple throughout the week via exclusive daily emails. To sign up, visit AboveAvalon.com/membership.    

Show Notes:

Apple Wearables Sales Outpacing iPhone out of the Gate (weekly article)

Apple 2Q17 Earnings Review: Major Themes (for Above Avalon members)

The Curious State of Apple Product Pricing (weekly article)

Daily Emails for Above Avalon Members

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Above Avalon Episode 96: Defining Apple

Apple continues to be misunderstood. Episode 96 is focused on how best to define Apple. The discussion begins with all of the labels used to describe Apple over the years. We then go over the major clues that help us define Apple, and this takes us to my thesis that Apple is a design company. We go over what design means and the difference between a design and tech company. The discussion concludes with a few examples of how Apple, as a design company, approaches core technologies. We use these examples to map where Apple is headed in the future. Receive my analysis and perspective on Apple throughout the week via exclusive daily emails. To sign up, visit AboveAvalon.com/membership.    

Show Notes:

Apple Isn't a Tech Company (weekly article)

Above Avalon Episode 88: Grading Tim Cook (podcast)

The Shape of Things to Come - Jony Ive Profile (The New Yorker)

Inside Apple (60 Minutes)

Charlie Rose Interviews Jony Ive (Charlie Rose Show)

Apple 2Q17 Earnings Preview (for Above Avalon members)

Daily Emails for Above Avalon Members

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Above Avalon Episode 95: A Mac Headache

In episode 95, we discuss how the Mac business has become a headache for Apple management. We begin by going over Apple's recent private meeting with outside journalists to talk about the Mac product pipeline. We then assess Apple's success with Mac by comparing it to the rest of Apple's business. The discussion turns to Apple's Achilles' heel and why the tail end of Apple's product line is beginning to pose a challenge. Apple's decision to come up with a new Mac Pro, while likely the right move, raises a number of red flags. After looking at each red flag, we end with a big picture view of why the Mac will have trouble fitting within Apple's longer-term mission. Receive my analysis and perspective on Apple throughout the week via exclusive daily emails. To sign up, visit AboveAvalon.com/membership.    

Show Notes:

The Mac Is Turning into Apple's Achilles' Heel (weekly article)

Transcript of Apple's private, on-the-record Mac meeting (TechCrunch)

The Grand Unified Theory of Apple Products (weekly article)

Daily Emails for Above Avalon Members

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Above Avalon Episode 94: Getting Aggressive with iPad

In episode 94, we discuss how Apple is pulling out all the stops when it comes to selling iPad. We begin by going over the significant changes to iPad strategy unveiled last week. The discussion then turns to the reasoning behind the changes, which involves taking a closer look at iPad sales according to screen size. This brings us to how Apple's aggressive iPad actions are related to the company solving its Mac dilemma. The episode concludes with how Apple plans to return the iPad business to growth. Receive my analysis and perspective on Apple throughout the week via exclusive daily emails. To sign up, visit AboveAvalon.com/membership.    

Show Notes:

Apple Is Pushing iPad Like Never Before (weekly article)

Above Avalon Episode 89: The iPad Asterisk (podcast)

Above Avalon Episode 93: Underpricing Luxury (podcast)

Peak iPad Mini (weekly article)

Above Avalon Episode 80: Let's Talk the New MacBook Pro (podcast)

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Above Avalon Episode 93: Underpricing Luxury

As Apple pushes deeper into luxury brand territory, the company is making its products more accessible through lower pricing. Apple is underpricing AirPods and Apple Watch. In episode 93, we discuss Apple's evolving pricing strategy. We begin by looking at AirPods and Apple Watch pricing and why I think the products are underpriced. The discussion then turns to three possible theories on Apple's wearables pricing strategy. After analyzing each theory, we take a closer look at how Apple is using pricing to grow its user base. The episode concludes with a number of things to look for when it comes to future Apple products and how Apple is using lower pricing to redefine luxury. To receive additional Apple analysis throughout the week, become an Above Avalon member by visiting AboveAvalon.com/membership.    

Show Notes:

The Curious State of Apple Product Pricing (weekly article)

Above Avalon Episode 92: Wearables as a Platform (podcast)

The Curious State of Apple Profit Margins (daily email for members)

Daily Emails for Above Avalon Members

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Above Avalon Episode 92: Wearables as a Platform

In episode 92, we discuss the changing wearables market. There has been a sea change involving the top wearables companies. Apple has become the new wearables leader according to unit sales. After discussing the driving force behind Apple's move to the lead, we take a closer look at why it's time to begin thinking about wearables as platforms containing a number of products. The episode concludes with a look at how competition is changing in the wearables space. To become an Above Avalon member and access more Apple analysis, visit AboveAvalon.com/membership.    

Show Notes:

The New Leader in Wearables (weekly article)

Above Avalon Episode 84: The Elephant in the Smartwatch Room (podcast)

Above Avalon Episode 85: AirPods and the Battle for Our Ears (podcast)

Deriving 1Q17 Apple Watch sales (daily member email)

Daily Emails for Above Avalon Members

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Above Avalon Episode 91: Netflix Chatter

Calls for Apple to buy Netflix are getting louder. In episode 91, we break apart the argument for why Apple should buy Netflix. By observing how Apple thinks about music streaming, we are in a better position to judge the approach Apple will likely take to video streaming. We also go over Apple's M&A philosophy to determine how Apple treats holes in its content strategy. The episode concludes with a big picture view as to why Apple doesn't need to own Netflix in order to accomplish its video content goals. To become an Above Avalon member, visit AboveAvalon.com/membership.    

Show Notes:

Above Avalon Episode 79: Apple's Trojan Horse into Hollywood (Podcast)

Apple Doesn't Need to Buy Netflix (Weekly Article)

Apple Considered Buying Imagine Entertainment (Daily Email)

Daily Emails for Above Avalon Members

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Above Avalon Episode 90: Buying Back 50% of Apple

Apple management is buying back shares like there's no tomorrow. In episode 90, we discuss how a path has appeared where Apple management can realistically buy back 50% of AAPL's outstanding shares within three years. After first going over some basics concerning share buyback, we address a few myths that have been circulating about share repurchases. We then go over the steps Apple management would need to follow to repurchase 50% of its shares. The episode concludes with a big picture view of Wall Street's reaction to Apple and its buyback program. To become an Above Avalon member, visit AboveAvalon.com/membership.      

Show Notes:

Apple on Track to Buy 50% of Itself in Three Years

Above Avalon Episode 41: Apple's Record Stock Buyback (Podcast)

Apple's Stock Buyback Program Primer (Daily Update)

Daily Updates for Above Avalon Members 

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Above Avalon Episode 89: The iPad Asterisk

In episode 89, we take a deep dive into one of the major themes found in Apple's 1Q17 earnings report. Apple's reported iPad sales number was quite weak, leading some to make assumptions about the product's fundamentals. We go over the results, including all of the moving pieces behind the scenes. The discussion also includes a broader reflection on the iPad's seventh anniversary and its place within Apple's changing product line. The episode concludes with a look at whether or not 1Q17 results changed my overall view that the iPad business has already turned the corner and is continuing to stabilize. To become an Above Avalon member, visit AboveAvalon.com/membership.      

Show Notes:

Above Avalon Episode 72: Let's Talk iPad

Steve Jobs Introduces Original Video 

iPad Introduction Video 

Apple 1Q17 Earnings Review: Major Themes 

Apple 1Q17 Earnings Review: Details

Daily Updates for Above Avalon Members 

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Above Avalon Episode 88: Grading Tim Cook

Tim Cook is a different type of CEO leading a different kind of company. In episode 88, we tackle the difficult task of grading Tim Cook's performance as Apple CEO. The discussion includes a broader look at Apple's leadership structure and evidence that Cook relies on an inner circle to lead Apple's operations and corporate strategy. The episode concludes with a closer look at seven key criteria used to judge Apple's performance, including a report card for Cook's inner circle. To become an Above Avalon member, visit AboveAvalon.com/membership.      

Show Notes:

Grading Tim Cook (Weekly Article)

Shape of Things to Come - The New Yorker (Jony Ive profile)

Daily Updates for Above Avalon Members 

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Above Avalon Episode 87: Change Is in the Air

Episode 87 is focused on how the competitive landscape in tech is changing. As Apple celebrates the tenth anniversary of the iPhone unveiling, the battle for our attention is broadening into a massive land grab for the most valuable real estate in our lives. After going over the winners in the current tech landscape, we look at some of the key factors that are redrawing the competitive lines. We then spend time focused on the three main areas of competition: the body, automobile, and home. The episode concludes with a discussion of this new landscape from the perspective of Apple. To become an Above Avalon member, visit AboveAvalon.com/membership.      

Show Notes:

The Battle Lines in Tech are Being Redrawn

Daily Updates for Above Avalon Members 

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Above Avalon Episode 86: Apple Questions for 2017

January is a great time to embrace the unknown found with a new calendar year. One way of doing this is to come up with a list of questions for the new year. In episode 86, we discuss my list of Apple questions for 2017. Topics include iPhone, Apple Watch, AirPods, Mac, iPad, Apple TV, iOS 11, Apple Music, Services, Project Titan, Wall Street, Apple Industrial Design, and a few wildcards. To become an Above Avalon member, visit AboveAvalon.com/membership.      

Show Notes:

Apple Questions for 2017 (Weekly Article) 

Above Avalon Podcast Episode 83: Milking the iPhone

Above Avalon Podcast Episode 85: AirPods and the Battle for Our Ears

Above Avalon Podcast Episode 79: Apple's Trojan Horse into Hollywood

Above Avalon Podcast Episode 74: Jony Ive Is Making People Uneasy

Thoughts and Observations on Apple's 2016 (daily update for members)

Daily Updates for Above Avalon Members 

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Above Avalon Episode 85: AirPods and the Battle for Our Ears

In episode 85, we go over how AirPods kick off Apple's battle for our ears. After discussing Apple's motivation behind AirPods, we go over my initial impressions from using AirPods for the past week. We then follow a few additional points, including my thoughts on AirPods sales estimates and how AirPods represent a window into a wearables world. The episode concludes with a look at how AirPods are Apple's flagship weapon in its quest for our ears. To become an Above Avalon member, visit AboveAvalon.com/membership.      

Show Notes:

AirPods Kick off Apple's Battle for Our Ears (Weekly Article)

Above Avalon Podcast Episode 76: AirPods

Daily Updates for Above Avalon Members 

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