Excerpts from the notes I’ve seen. More as they come in.
Katy Huberty: Morgan Stanley: What we learned from today’s special event. The highlight of today’s event was Apple’s new M1-powered iMac and iPad Pro models, which feature higher quality displays (including Mini-LED in the 12.9″ iPad Pro), faster CPU and GPU performance, advanced machine learning capabilities, and thinner form factors. The new iPad Pro models also feature optional 5G cellular capabilities, with mmWave technology available only in the US… We believe that demand from enterprises to adopt more mobility friendly, productivity enhancing computing devices to support a hybrid workforce makes Apple well-positioned to grow its share in the PC/tablet market. In our view, Apple’s commitment to launching several new and differentiated Mac/iPad models over the last 6 months shows that Apple is capitalizing on this opportunity. Longer-term, we see a significant opportunity to grow Mac market share from 7% today to levels more comparable to iPhone’s 15% share of annual smartphone shipments… Beyond the Mac and iPad, other products and services Apple launched today include the long-awaited AirTag, an updated Apple TV 4K, a new Podcast subscription service, and new family-oriented features for the Apple Card. Overweight. Target to $158 from $157.
Chris Caso, Raymond James: AirTags Announced – We Think You’re Going to Want to Buy One. Apple’s spring event contained a number of announcement, including new iPad Pros, a new iMac and a next generation Apple TV 4K. But the most significant announcement was the introduction of the long-rumored AirTags, which can be used to track and find household devices (such as keys, wallets, jackets) if lost. We believe this product category will have very broad appeal (who wouldn’t pay $30 to not lose your wallet?), and as such could grow to become a $10 billion opportunity, similar to AirPods, while also strengthening the ecosystem and encouraging upgrades. Outperform. $160
Krish Sankar, Cowen: A Cornucopia of products and services. We view the new products and services introduced at the Spring ’21 product launch event as incremental positives for maintaining a competitive portfolio, improving hardware margins with M1 silicon-based Macs, expanding the accessories portfolio with AirTags and updated Apple TV 4K, and refreshing the Podcast app and business model to capture further growth in recurring revenue streams. Outperform. $153.
Martin Yang, Oppenheimer: What Is An iPad? An Intriguing Time in Personal Computing. When an iPad comes with the same raw power as new MacBooks and iMacs and the best display Apple’s ever had, does it stop being an iPad? We’re entering an intriguing time when Apple brings a widening performance gap to competing products across all categories. However, users are not able to take full advantage of Apple’s unifying hardware architecture yet. Seamless workflow, development environment, and App Stores between MacOS and iOS are still nowhere to be found. Fortunately, those bigger constraints to the full power of Apple Silicon, in our view, are all self-imposed and temporary (before Apple finishes the complete migration). Outperform. $160.
Rod Hall, Goldman Sachs: A strong report is likely but composition of beat key. Post “Spring Loaded” event updates. We expect Apple to report a strong March quarter in scheduled earnings on April 28. In fact, our proprietary lead time data included in this report suggests that our prior above normal Mac and iPad forecasts may still be too low through June and we increase them again. We also note both new iMacs and updated iPad Pro announcements at Apple’s event today consistent with our forecasts, though these are not the reason we are tweaking our numbers. As we approach earnings we believe that how Apple beats numbers this quarter is more important than whether it beats. In our opinion, current high levels of both iPad and Mac demand are unlikely to be sustainable as the world re-opens so another beat driven more by these areas may not be enough to drive the shares further. Sell. $83. (See also: “How does Goldman Sachs’ Apple analyst still have a job?)
Samik Chatterjee, J.P. Morgan: iPad Pro and iMac Launches Positives to WFH Drivers. While some of the launches might stand out as experiments from Apple to figure out consumer demand for new services, as well as new color options mid-cycle for iPhones, the most material launch in our view were the next generation iPad Pro with sizeable feature upgrades and now supported using M1 chips, and the same for the new redesigned iMac. The introduction of the M1 chip in iPad Pro as well as the iMac shows a faster than expected adoption of the M1 chip across the portfolio, and the launch of these devices at this time of the year (including with 5G capabilities on iPads) positions Apple well to leverage the consumer upgrade cycle around WFH devices as consumers increasingly prepare for hybrid work environments. Overweight. $150.
Amit Daryanani, Evercore: Barney in the House + M1 Spreads Further. Apple hosted a virtual event today to announce 5 new additions to the product and services line up. 1) New iPad Pro which will be the first to feature an M1 chip that until now has been restricted to the Macbook lineup. Previous generations of the iPad ran on Apple’s A-Series chips. 2) A new iMac which will also use an M1 chip. The use of the M1 chip enabled Apple to design a very thin, sleek product that reduced overall iMac volume by ~50%. The new iPad and iMac will both be available for delivery in the 2nd half of May, which indicates the silicon shortage is not having much of an impact at least on these new products. 3) Apple finally debuted the AirTag, which is built on Find My technology and will retail for $29. The product is a direct challenge to Tile, which retails for $30. 4) Apple TV 4k is the latest addition to the TV line up and will use an Apple A12 bionic chip. It also features a new remote and some pretty compelling iPhone integration that will help optimize color settings on any TV. 5) Apple’s new podcast app includes an overall redesign and the introduction of podcasts subscriptions. Apple also announced a new purple (Barney) color for the iPhone 12 lineup. Outperform. $175.
Daniel Ives, Wedbush: Recap of Apple Launch. During the event Apple announced its highly anticipated Podcasting subscription service which is clearly both an offensive and defensive move against Spotify. This service will further enable Apple to monetize its podcasting moat and ultimately we expect more exclusive content partnerships to be announced over the coming months to compete with Spotify in this quickly morphing podcasting arms race. The Podcasting service is another move towards building a holistic subscription ecosystem to further enable Cupertino to monetize its unparalleled 1.6 billion iOS devices globally around its $65 billion annual services segment. Outperform. $175.
Gene Munster, Loup Ventures: The Little Things Add Up. At its Spring Loaded event, Apple announced redesigns of the iMac and iPad Pro, along with updates to Apple TV and two new products: AirTags and a podcast subscription service. Taken individually, these announcements do little to move the company’s top line, but, in aggregate, they are material and could add an incremental 3% to overall revenue. Other good news, reading between the lines of price changes suggests demand for Mac and iPad remains favorable and margins will trend flat to higher.
Daniel Newman, Futurum Research Principal Analyst: Apple is really leaning into this M1. It gives them more scalability… I’ve been on [Yahoo Finance] earlier to talk about the chip shortage. Well, creating and streamlining the delivery and building this profile around this ARM-based variant, Apple’s got a great relationship with TSM for their 5 nanometer process. And this is just going to continue to expand the amount of demand and the amount of fulfillment that’s going to run through Apple from TSM.
From the Twitter:
Always bad to discount extra hardware performance but current iPad OS and apps don’t justify it. That said, WWDC is right around the corner. Perhaps new OS and app architecture to take advantage? https://t.co/w8fg7bJyG2
— Michael Gartenberg (@Gartenberg) April 20, 2021