Above Avalon Episode 156: Apple's Content Distribution Arm

Content distribution has been a major theme for Apple in 2019. In episode 156, Neil goes over how Apple’s revised content distribution arm is structured. Neil also goes over his estimates for how much revenue and gross profit Apple’s content distribution arm can generate by FY2022. Additional discussion topics include the difference between Apple’s paid content bundles and content platforms, Neil’s initial estimates for the number of subscribers Apple will be able to grab for Apple TV+, Apple Arcade, and Apple News+, and why Apple’s new paid bundles will likely have lower profits than the App Store. Receive Neil’s analysis and perspective on Apple throughout the week by becoming an Above Avalon member and receiving exclusive daily updates. To become a member, visit AboveAvalon.com/membership.   

Links:

Measuring Apple’s Content Distribution Arm (Above Avalon weekly article)

Above Avalon Episode 140: Let’s Talk Content (podcast episode)

Above Avalon Episode 145: It’s All About Curation (podcast episode)

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Above Avalon Episode 155: The Apple Keynote

Apple keynotes remain some of the most valuable marketing events in today’s media landscape. Episode 155 is dedicated to going over Neil’s thoughts on the Apple keynote. Discussion topics include the odd criticism facing Apple keynotes, the three primary benefits Apple derives from them, how the Apple keynote has evolved, and areas in which Apple can improve the keynote. Receive Neil’s analysis and perspective on Apple throughout the week by becoming an Above Avalon member and receiving exclusive daily updates. To become a member, visit AboveAvalon.com/membership.   

Links:

Apple Keynotes Still Matter (Above Avalon weekly article)

The Apple Event: Major Takeaways & Full Notes (Above Avalon daily updates)

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Above Avalon Episode 154: Which iPhone Is That?

Naming iPhones is more art than science. In episode 154, Neil shares his thoughts on Apple’s iPhone naming strategy. The episode includes an oral history of iPhone nomenclature followed by a discussion of where Apple can bring iPhone naming in the future. Neil also goes over why the art of naming iPhones even matters when looking at the big picture. Receive Neil’s analysis and perspective on Apple throughout the week by becoming an Above Avalon member and receiving exclusive daily updates. To become a member, visit AboveAvalon.com/membership.   

Links:

Naming iPhones (Above Avalon weekly article)

Thoughts Heading into Apple's Big September Event (Above Avalon daily update)

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Above Avalon Episode 153: The Bundler of Bundles

In episode 153, Neil discusses the strategy behind Apple TV+. Additional topics include the Apple TV app, five fundamental issues plaguing the paid video streaming market, Netflix’s business model, and what success in paid video streaming looks like for Apple. Receive Neil’s analysis and perspective on Apple throughout the week by becoming an Above Avalon member and receiving exclusive daily updates. To become a member, visit AboveAvalon.com/membership.   

Links:

The Apple TV+ Strategy (Above Avalon weekly article)

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Above Avalon Episode 152: Let's Talk Wearables

Apple is the undisputed leader in wearables, and they are pulling away from the competition. In Episode 152, Neil discusses how Apple’s wearables business can be thought of as a train gaining momentum. Competitors face declining odds of being able to stop the train. Additional topics include Apple’s wearables performance in 3Q19, wearables as a percent of overall Apple gadget unit sales, Apple wearables revenue, the factors behind Apple’s wearables success, and why wearables represent a paradigm shift in computing. Receive Neil’s analysis and perspective on Apple throughout the week by becoming an Above Avalon member and receiving exclusive daily updates. To become a member, visit AboveAvalon.com/membership.   

Links:

Apple Deserves More Credit for Wearables (Above Avalon weekly article)

Above Avalon Episode 151: Apple’s Financial Tug-of-War (podcast episode)

Above Avalon Episode 97: Apple Wearables Are a Thing (podcast episode)

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Above Avalon Episode 151: Apple's Financial Tug-of-War

A different kind of Above Avalon podcast episode - dedicated to discussing why earnings are so intriguing to Neil. After going over the two ways to utilize quarterly earnings, Neil goes over some of his expectations for Apple’s 3Q19 and how Apple is currently facing a financial tug-of-war. Receive Neil’s analysis and perspective on Apple throughout the week by becoming an Above Avalon member and receiving exclusive daily updates. To become a member, visit AboveAvalon.com/membership.   

Links:

Apple 3Q19 Earnings Expectation Meters (weekly article)

Above Avalon Episode 136: The Unit Sales Crutch (podcast episode)

Above Avalon Episode 149: Letting Go of the Rope (podcast episode)

Above Avalon Episode 147: A Faster Bumper Car podcast episode)

Apple 3Q19 Earnings Preview - First Half / Second Half (daily updates)

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Above Avalon Episode 150: A Larger Apple Machine

The recent Jony Ive and Jeff Williams news has been met with mixed reactions. In episode 150, we discuss why the leadership changes neither signify a company moving away from design or hardware nor suggest that management is facing some kind of growth crisis. Upon closer examination, the Jony Ive and Jeff Williams news are byproducts of Apple evolving into a much larger design company. Additional topics include the various growth narratives facing Apple, the growing Apple installed base, and the Apple machine. Receive my analysis and perspective on Apple throughout the week by becoming an Above Avalon member and receiving exclusive daily updates. To become a member, visit AboveAvalon.com/membership.   

Links:

Jony Ive, Jeff Williams, and a Larger Apple (weekly article)

Jony Ive Is Leaving Apple, but His Departure Started Long Ago (WSJ)

Above Avalon Episode 149: Letting Go of the Rope (podcast episode)

Thoughts on the Jony Ive News (daily update)

Don’t Ignore Marc Newson, Jeff Williams’ Significance, The WSJ’s Hit Piece Against Jony Ive (daily update)

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Above Avalon Episode 149: Letting Go of the Rope

Despite there being no discernible change to the grand vision behind Apple’s product development, there does appear to be a noteworthy change in strategy. Episode 149 is dedicated to discussing how Apple’s product strategy has changed from a pull system to a push system. Additional topics include product-related implications raised by Apple’s revised strategy, the Grand Unified Theory of Apple Products, and why I’m hesitant about some aspects of the change. Receive my analysis and perspective on Apple throughout the week by becoming an Above Avalon member and receiving exclusive daily updates. To become a member, visit AboveAvalon.com/membership.   

Links:

Apple’s Product Strategy Is Changing (weekly article)

Product Vision: How Apple Thinks About the World (quarterly report)

Addressing the Hole in the Grand Unified Theory of Apple Products (daily update)

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Above Avalon Episode 148: Apple's Billion Users

Apple has reached a level of ecosystem strength that still hasn’t been fully digested by the marketplace. In episode 148, we discuss Apple’s ecosystem ahead of the company’s developers conference. Additional topics include how I estimated the total number of Apple users, various revenue per user figures for different parts of Apple’s user base, the difference between Apple in 2019 and the 1990s, and how wearables represent one of Apple’s key growth opportunities. Receive my analysis and perspective on Apple throughout the week by becoming an Above Avalon member and receiving exclusive daily updates. To become a member, visit AboveAvalon.com/membership.   

Links:

Apple’s Billion Users (weekly article)

The Grand Unified Theory of Apple Products (weekly article)

Estimating iPhone, iPad, and Mac Installed Bases (daily update)

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Above Avalon Episode 147: A Faster Bumper Car

In episode 147, we take a look at the changing competitive landscape facing the giants (Amazon, Apple, Facebook, Google, and Microsoft). Comparing the situation to bumper cars, we discuss why Google and Facebook have the slower cars that are no longer able to hide within the traffic. Additional topics include deep dives into three competitive battles in particular: Apple vs. Google, Apple vs. Facebook, and Amazon vs. Facebook vs. Google. Receive my analysis and perspective on Apple throughout the week by becoming an Above Avalon member and receiving exclusive daily updates. To become a member, visit AboveAvalon.com/membership.   

Links:

Tech's Tectonic Plates Are Starting to Shift (weekly article)

Facebook F8, Microsoft Build, Google I/O, Overall Takeaways (daily update)

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Above Avalon Episode 146: Tackling Apple's Excess Cash

In what has become an annual trend, Apple uses FY2Q earnings to also update its share buyback authorization and quarterly cash dividend. In episode 146, we preview the changes Apple will likely announce to its capital return program. The discussion begins by going over how Apple has adjusted its buyback pace following U.S. tax reform and why the company will eventually have to cut back on buyback. We then go over my expectations for what Apple’s board will approve in terms of increases to the buyback authorization and quarterly cash dividend. Additional topics include the debate surrounding Apple capital return and why the company has so few viable options for spending excess cash. Receive my analysis and perspective on Apple throughout the week by becoming an Above Avalon member and receiving exclusive daily updates. To become a member, visit AboveAvalon.com/membership.   

Links:

Apple’s $400 Billion Buyback Program (weekly article)

Above Avalon Episode 124: Doubling the Buyback (podcast)

Apple 2Q19 Earnings Preview

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Above Avalon Episode 145: It's All About Curation

At Apple’s recent event at Steve Jobs Theater, the company unveiled its revamped content distribution arm. Episode 145 is dedicated to discussing Apple’s new content distribution services: Apple News+, Apple Arcade, and Apple TV+. Instead of just announcing services for consuming more content, Apple unveiled a strategy for curating content for its user base of a billion people, something that I am calling “Curation for Casual.” The discussion also goes over how curation explains Apple’s move into original content. Additional topics include a few surprises unveiled at Apple’s Services event, the history behind Apple’s video distribution strategy, the changing content consumption landscape, and Apple’s content distribution arm eventually being considered a core technology powering Apple devices. Receive my analysis and perspective on Apple throughout the week by becoming an Above Avalon member and receiving exclusive daily updates. To become a member, visit AboveAvalon.com/membership.   

Links:

Why Apple Is Getting Into Original Content (weekly article)

Above Avalon Episode 140: Let’s Talk Content (podcast)

Opening Film - March 2019 Apple Event (YouTube)

Apple’s “Curation for Casual” Strategy, Content Distribution as a Core Technology, Apple’s Cross-Platform Strategy for Content (daily update)

Curation as a Business Model (daily update)

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Above Avalon Episode 144: Checking Up on iPad

In recent years, the iPad line has undergone transformational changes. In episode 144, we look at Apple’s broader iPad strategy to add context to the newest updates involving the iPad mini and iPad Air. The episode kicks off with my thoughts on the new devices. The discussion then turns to the three sales phases that have come to define the iPad business over the years. Additional topics include Peak iPad mini, how Apple is following an iPhone / Mac hybrid approach when it comes to iPad updates, whether the iPad line is too complex or complicated, and observations on the current iPad line. Receive my analysis and perspective on Apple throughout the week by becoming an Above Avalon member and receiving exclusive daily updates. To become a member, visit AboveAvalon.com/membership.   

Links:

Thoughts on Apple’s Revised iPad Line (weekly article)

Peak iPad Mini (weekly article)

Above Avalon Episode 120: An iPhone Turning Point (podcast)

The iPhone’s Turning Point - iPad mini vs. larger iPad sales chart (weekly article)

Thoughts Heading into Apple’s Show Time Event (daily update)

Above Avalon membership (sign-up forms, full list of member privileges and benefits, and FAQ)

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Above Avalon Episode 143: Look at the Capex

For the first time in 16 years, Apple expects its capital expenditures (capex) to decline during the current fiscal year. Episode 143 is dedicated to discussing capex and how the financial metric provides a different look at how Apple is unique in comparison to its largest peers. Additional topics include defining capex, the theories behind Apple’s declining capex, the dramatic capex shift occurring among the Wall Street giants, and how capex shines light on a company’s cash-generating machine. Receive my analysis and perspective on Apple throughout the week by becoming an Above Avalon member and receiving exclusive daily updates. To become a member, visit AboveAvalon.com/membership.   

Links:

Apple’s Declining Capex (weekly article)

Above Avalon Episode 122: An Apple R&D Bonanza (podcast)

Apple’s Free Cash Flow Advantage / Revisiting Apple’s Wall Street Narrative (daily update)

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Above Avalon Episode 142: Rethinking the Smart Home

In one word, the smart home has been disappointing. Episode 142 is focused on why the way we think about digital homes is in need of a major reset. After going over my thoughts on the current state of the smart home, we take a closer look at Apple’s vision for the home and why the company is likely looking to revamp its broader home strategy. Additional topics include how Amazon and Google have used voice to hijack the smart home in order to push alternative visions and Apple hiring Sam Jadallah to lead its various home initiatives. We also discuss how Apple can revamp its home strategy and why the smart home path is going to be bumpy going forward. Receive my analysis and perspective on Apple throughout the week by becoming an Above Avalon member and receiving exclusive daily updates. To become a member, visit AboveAvalon.com/membership.   

Links:

Revamping Apple’s Home Strategy (weekly article)

Above Avalon Episode 113: It’s a Smart Speaker Mirage (podcast)

Above Avalon Episode 140: Let’s Talk Content (podcast)

The End of the Connected Home (Medium)

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Above Avalon Episode 141: Viral AirPods

There’s a remarkable story found with AirPods. Nearly two years after launch, AirPods began to go viral at the end of November 2018. In December, search interest was up 500%. This is unprecedented for an Apple product. In episode 141, we take a deep dive into the AirPods phenomenon and how the product became part of culture. Additional topics include AirPods unit sales, the size of the AirPods user base, the keys to success in wearables, and thinking of wearables as battles for real estate on our wrists, ears, eyes, and body. Receive my analysis and perspective on Apple throughout the week by becoming an Above Avalon member and receiving exclusive daily updates. To become a member, visit AboveAvalon.com/membership.   

Links:

AirPods Have Gone Viral (weekly article)

Inside Edition video (YouTube)

AirPod “Airings” (Twitter)

Estimating AirPods Sales (daily update)

Calculating the Mix of Apple Devices in Use (daily update)

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Above Avalon Episode 140: Let's Talk Content

Some of Apple’s recent decisions regarding content distribution have sparked a debate. Is Apple embracing a new kind of strategy that elevates services at the expense of hardware? Episode 140 is dedicated to going over Apple’s content distribution strategy and how the company is looking to leverage its user base in an effort to establish one of the more formidable content distribution arms in existence. Additional topics include Apple’s history as a content distributor, how streaming is changing content consumption, misconceptions surrounding Apple’s content distribution strategy, the sudden collapse in stationary speaker buzz, Apple’s goals for its content distribution arm, and the various challenges facing the company. Receive my analysis and perspective on Apple throughout the week by becoming an Above Avalon member and receiving exclusive daily updates. To become a member, visit AboveAvalon.com/membership.   

Links:

Apple’s Content Distribution Strategy (weekly article)

Calculating the Mix of Apple Devices in Use (daily update)

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Above Avalon Episode 139: Thinking About Apple in 2019

January is a great time to embrace the unknown rather than come up with predictions for the next 12 months. Episode 139 is dedicated to going over my fifth installment of Apple questions as the new year kicks off. We discuss 56 questions facing Apple in 2019. Topics include everything from big picture themes to detailed questions about Apple’s product strategy. Additional topics include Apple’s financial picture, management changes, emerging markets headwinds, R&D, and capital expenditures. Receive my analysis and perspective on Apple throughout the week by becoming an Above Avalon member and receiving exclusive daily updates. To become a member, visit AboveAvalon.com/membership.   

Links:

Apple Questions in 2019 (weekly article)

AirPods and Apple Watch Sales Estimates (daily update for Above Avalon members)

Apple’s Leadership Structure Under Tim Cook and Jony Ive (quarterly report for Above Avalon members)

Thoughts on Apple Cutting 1Q19 Guidance (daily update)

Additional Thoughts on Apple Cutting 1Q19 Guidance (daily update)

Apple Expands AirPlay 2 Support to Smart TVs (daily update)

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Above Avalon Episode 138: iPhone Pessimism Gone Too Far

There will come a time when the iPhone business is in big trouble. However, that day has not arrived quite yet. Episode 138 is focused on how the sheer level of pessimism facing iPhone hit an inflection point in 2018. Things have simply become too negative. The discussion begins with the iPhone’s impact on Apple financials. We then dissect iPhone hysteria to see how pessimism has changed and centered on a new type of narrative. Additional topics include demand for $999+ iPhones, the gray market, genuine risks and concerns facing iPhone, how the iPhone business is changing, and why wearables have to be part of the iPhone discussion. Receive my analysis and perspective on Apple throughout the week by becoming an Above Avalon member and receiving exclusive daily updates. To become a member, visit AboveAvalon.com/membership.   

Links:

iPhone Hysteria (weekly article)

Above Avalon Episode 136: The Unit Sales Crutch (podcast)

Apple Outgrew Unit Sales (weekly article)

Above Avalon Episode 135: The Gray Market Factor (podcast)

The Gray Market’s Impact on iPhone Pricing (weekly article)

Apple and Dividends: A Deep Dive into Apple’s Cash Dividend Strategy (quarterly report for Above Avalon members)

Apple Earnings Model Access (for Above Avalon members)

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Above Avalon Episode 137: A Cheaper Buyback

Given the magnitude of its buyback program, excess cash position, and free cash flow generation, no other public company is in as good of a position as Apple to benefit from stock market turmoil. Episode 137 is focused on how Apple can leverage its buyback program to take advantage of stock market dislocations. The discussion begins with my thoughts on the recent weakness in AAPL shares. We then look back at previous AAPL stock downturns to find a few similarities and takeaways. The discussion turns to Apple’s share buyback and the impact a change in stock price has on Apple’s buyback activity. Additional topics include Apple buyback scenarios, valuation, and the irrationality found in comparing a company’s stock price to its underlying health. Receive my analysis and perspective on Apple throughout the week by becoming an Above Avalon member and receiving exclusive daily updates. To become a member, visit AboveAvalon.com/membership.   

Links:

Leveraging Apple’s Share Buyback (weekly article)

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

Above Avalon Episode 41: Apple’s Record Stock Buyback (podcast)

Apple Earnings Model Access (for Above Avalon members)

Apple’s Leadership Structure Under Tim Cook and Jony Ive (quarterly report)

Above Avalon Gifts

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