Above Avalon Episode 149: Letting Go of the Rope

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Above Avalon Episode 148: Apple's Billion Users

June 01, 2019 by Neil Cybart

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)

Above Avalon membership page (info, sign-up forms, and FAQ)

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Above Avalon Episode 147: A Faster Bumper Car

May 18, 2019 by Neil Cybart

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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Apple 2Q19 Earnings Preview

Above Avalon Episode 146: Tackling Apple's Excess Cash

April 27, 2019 by Neil Cybart

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)

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Above Avalon Episode 145: It's All About Curation

April 13, 2019 by Neil Cybart

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

March 23, 2019 by Neil Cybart

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

March 16, 2019 by Neil Cybart

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

February 23, 2019 by Neil Cybart

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

February 16, 2019 by Neil Cybart

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

January 26, 2019 by Neil Cybart

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 19, 2019 by Neil Cybart

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

December 22, 2018 by Neil Cybart

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

December 08, 2018 by Neil Cybart

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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Above Avalon Episode 136: The Unit Sales Crutch

November 17, 2018 by Neil Cybart

The most surprising part of Apple’s 4Q18 results wasn’t found with the numbers or even guidance. Instead, by announcing unit sales data would no longer be provided starting in 1Q19, management dropped a bomb on Wall Street. Episode 136 is focused on discussing Apple’s decision to move beyond unit sales. We go over how unit sales became a crutch for financial analysts. The discussion then turns to management’s new blueprint for how it wants Wall Street to judge Apple. Additional topics include Apple revenue and gross margin trends, Wall Street narratives, and Apple as a toolmaker. 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 Outgrew Unit Sales (weekly article)

Above Avalon Episode 123: Apple’s New Wall Street Story (podcast)

An iPhone Slump? / A Possible iPhone Explanation (daily update)

Apple 4Q18 Earnings Review (daily update)

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

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Above Avalon Episode 135: The Gray Market Factor

October 27, 2018 by Neil Cybart

In episode 135, we look at how the gray market for refurbished and previously-owned iPhones is impacting Apple’s iPhone pricing strategy. The discussion begins with a closer look at iPhone ASP (average selling price) trends and my thoughts on how the gray market is impacting iPhone ASP. We then go over the three key ingredients needed to sustain a functioning gray market for iPhone. Additional topics include: iPhone durability, the iPhone Upgrade Program, iPhone residual values and depreciation, and future iPhone ASP trends. 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:

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

Size of iPhone Gray Market (daily update)

3Q18 iPhone Unit Sales Mix (daily update)

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Above Avalon Episode 134: Let's Talk Netflix

October 13, 2018 by Neil Cybart

The Netflix machine seems unstoppable. Strong paid subscriber growth and rising content budgets have given Netflix a commanding lead in the paid video streaming market. However, change is in the air. Episode 134 is dedicated to discussing Netflix’s business model and why calls suggesting Netflix has won the paid video streaming war are grossly premature. Additional topics include Netflix’s keys to success, upcoming paid video streaming competitors, lessons from the music streaming industry, and things to watch out for in paid video streaming over the coming years. 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:

Netflix Isn’t Invincible (weekly article)

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Above Avalon Episode 133: The Big Picture from Steve Jobs Theater

September 22, 2018 by Neil Cybart

Last week, Apple Watch was the star of Apple’s second major product event at Steve Jobs Theater. Episode 133 is focused on looking at the big picture following Apple’s event. The discussion begins by going over Tim Cook’s comments regarding Apple’s mission statement and then quickly puts the iPhone and Apple Watch updates into context. We then turn to my Grand Unified Theory of Apple Products. Additional topics include my user base estimates for Apple’s various product categories, my rationale for why Apple Watch and Apple Glasses will one day have a larger user base than iPhone will, and the power associated with new form factors that are capable of handling new tasks. 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:

Connecting the Apple Dots (weekly article)

Episode 44: The Grand Unified Theory of Apple Products (podcast)

Apple Glasses Are Inevitable (weekly article)

Apple Event Review (daily update)

User base estimates for Apple’s various product categories (daily updates)

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Neil Cybart (host/producer)

Above Avalon Episode 132: Titan vs. Tesla

September 08, 2018 by Neil Cybart

In episode 132, we take a closer look at Apple's Project Titan. The discussion begins by going over the signs pointing to Apple expanding Titan initiatives in recent months. We then turn to Apple's goal with Titan and the automobile's changing value proposition. Tesla enters the discussion as we look at why the company isn't a realistic acquisition target for Apple. Additional topics include Tesla's struggles, poaching, Doug Field's move from Tesla to Titan, and the most interesting things to watch for in the auto space. 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:

Poaching Tesla (weekly article)

Map of various Project Titan buildings and land (daily update)

D oug Field Joins Project Titan (daily update)

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Above Avalon Episode 131: Growth Drivers

August 18, 2018 by Neil Cybart

Apple's latest growth story is driven by three drivers: iPhone, Services, and Wearables. In episode 131, we discuss these three growth drivers to see how they are not created equal. After going over the factors fueling Apple's growth drivers, we spend time discussing how Apple's growth story may change in the near term. The episode concludes with a big picture overview of why Apple's long-term growth story won't just be about Services. 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 Growth Story (weekly article)

Episode 126: Let's Talk Apple Services (podcast)

iPhone Installed and User Base Estimates (daily update)

Apple Watch Installed and User Base Estimates (daily update)

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Above Avalon Episode 130: What's a Computer?

July 28, 2018 by Neil Cybart

Episode 130 is dedicated to discussing how Apple has become comfortable in accepting, and even embracing, the awkwardness that exists between the iPad and Mac. The discussion begins with a closer look at the fascinating juxtaposition between Apple's recent Mac campaign and its iPad ads from earlier this year. We go over what the ads tell us about Apple's thought process regarding the iPad and Mac. Things then turn to how the iPad vs. Mac juxtaposition hasn't been static over the years. After briefly recapping the post-PC era debate, the episode concludes with my thoughts on where Apple will bring the iPad and Mac platforms and why the company faces a large screen paradox. 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:

The iPad vs. Mac Juxtaposition (weekly article)

Behind the Mac - Mac ad (YouTube)

What's a computer - iPad Pro ad (YouTube)

Homework - iPad ad (YouTube)

Apple 3Q18 Earnings Preview (daily updates)

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