From Gene Munster’s interview Friday with former Intel engineer Zheng Li.
Cue the video:
The Apple stuff starts at the 8-minute mark.
My take: The six months Intel waited before it started shopping around Apple’s crown jewels must have been in the contract. Still, is it any wonder Apple finally decided to drop Intel and design its own processors?
REMINDER: Munster will be the celebrity guest today (Saturday) on Apple 3.0’s subscribers-only Zoom call, scheduled to begin at 3:30 Eastern, 12:30 Pacific. The event is fully booked, but friends-of-the-blog can watch the video re-run when it posts on Sunday.
Like I said before, I see a paradigm shift in laptops and desktops evolving in the next 5 years. I’ve recommend reading “Inside the Tornado [Marketing Strategies from the Silicon Valley’s Cutting Edge]” several times. It describes how paradigm shifts occur and the different stages they go through until a new technology brings down the previous market leader. One of the stages in a paradigm shift is the “Chasm”.
“The Chasm is where many high tech fortunes have been lost…The Tornado is where many have been made” – Steve Jobs, Apple Computer
On the chopping block are Microsoft, Dell, HP and Lenovo. I predict that by 2030 the computing landscape will look entirely different from today. All those iPhone, iPad, Apple Watch users, consumer and corporate alike, that currently use Wintel PCs are potential M(x) Mac users.
I just DL’d your recommendation (author Geoffrey A. Moore) from Apple iBooks.
I hope to be able to listen to the next conference call with it.
Reality wise, the pragmatist says later. But gosh, u really made me think about getting an M1 Mac Mini now (that’s the I-wish-I-did-Apple-product-reviews-professionally me!). LOL
Now I believe MS could actually achieve reasonable results, particularly in servers, because of their understanding of MS software used in that environment. It’s the nature of tech that the followers can catch up faster than the leaders developed the original technology.
When do we see Google start developing ARM server chips? I’m sure they’re working on it.
As options like an M1X with multiple additional performance cores added, more integrated memory (or modules) and other performance enhancements become reality from lab to production, we will continue to see Apple’s performance envelope expand quickly.
Then the real bottlenecks will be ARM specific and optimized programming to utilize this type of power.
About a year after Apple launched the MBA, I went to the Stanford Shopping Mall, a high-end retail venue, and into the empty Sony store. They had a Windows Notebook “air”, which had slightly higher priced for the same specs as the MBA. This still holds true. Apple’s products are not premium priced. Apple meets or beats quality products from quality brandname vendors.
PS: That Sony storefront is now a Tesla showroom. Microsoft’s storefront long ago left the Stanford Shopping Mall. It too was lonely.
One of the things I monitor is the percent of full-year revenue each quarter represents. With this data, I can apply DEC percentage (average FY2015 – FY2020) to DEC Quarter results and get an approximation of full-year revenue.
DEC quarter revenue of full-year results is now 33.28%.
If I apply that to my DEC quarter revenue estimate ($103.5 Billion) I get a full-year revenue projection of $311.0 in revenue. That’s a 13.96% YoY increase, compared to the average increase of 7.52% for the same period above.
WS consensus revenue for FY2021 is $101.7 Billion. Applying my calculation to that results in full-year revenue of $305.6 Billion in revenue for FY2021. Of course, there a myriad of issues that can impact final results up or down.
The two estimates give us a full-year revenue range of $305 Billion to $311 Billion.
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“Did I understand Gene correctly (during Zoom conference) that he expects Apple revenue to grow about 15% per annum for the next 2 – 3 years?”
We’ll have to wait for the recording but I think that’s about right. He did believe that net income is going up and will force an increase in buybacks & dividends. My point was taken that net cash (presently ~$79 B) only reduced by $2 B/quarter over the last 3 quarters, suggesting a lot more than 2-3 years before a net zero debt to cash ratio is reached. (80/(2×4) = 10 years!)
“I’m not surprised that they dialed back the buybacks during this period.”
Except that’s not what happened. Apple’s been averaging about $17.5 B in buybacks per quarter over the last 2 years. So the amount spent on buybacks hasn’t significantly changed. Even so, the movement towards net zero has slowed. Why? Because against all odds, Apple is making money smack in the middle of the pandemic. And by all the signs, they’re going to make even more in FY 2021. And Mr. Munster agrees.
He was speaking about 2022 where the street is modeling only 5% because 2021 will be a 15% year. The street is always afraid of the tough comparisons.