Apple’s Spring Loaded: What the analysts are saying

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:

29 Comments

  1. Jonny T said:
    Hope one of them has the balls to say Apple knocked it right out the flippen’ park. Which they have. Best one since 1998 in my book.

    7
    April 20, 2021
    • David Emery said:
      From a technical perspective, I think the M-1 introduction was more important, as that set the stage for the next decade. I didn’t watch the presentation, but it sounds like it was tightly run, without some of the inconsistencies of previous announcements.

      4
      April 20, 2021
      • Gregg Thurman said:
        From a technical perspective, I think the M-1 introduction was more important, as that set the stage for the next decade

        Yes. This year’s WWDC will (IMHO) be about AR, and more, not previously possible on anything short of an M1.

        When available I’ll join the back order queue to replace my Mac Mini and 11 yo Cinema Display with an M1 Mac.

        3
        April 20, 2021
        • Gregg Thurman said:
          with an M1 Mac.

          “with an M1 iMac”

          2
          April 20, 2021
  2. John Butt said:
    My opinion is that the iMac with M1 is a major because if you stop thinking of the iMac as a computer and think of it as a screen, then Apple have created a new computing solution, your computer may have two screens, a portable one (MacBook Air) and a larger screen fixed one (iMac). The software manages which computer you are using and avoids the messy process of linking your MacBook Air to your screen.
    That is exactly the setup we will deploy ASAP to replace our LG 4K screens.
    That results in selling two computers per user, Think about that!

    6
    April 20, 2021
    • David Emery said:
      I’m not fully buying this argument with a 25″ iMac. If it was a 27″ or 30″ iMac, I’d be more inclined to view this as a good high-end “2 computer pair”. Sure 25″ is better than 13″, but I’m not convinced it’s sufficiently better for those who can afford 2 Macs for their desktop.

      1
      April 20, 2021
  3. Kirk DeBernardi said:
    Spring IS loaded…and billions of flowers bloom.

    Bring. It. On.

     — the da Vinci of tech.

    4
    April 20, 2021
    • Romeo A Esparrago Jr said:
      Like bluebonnets in the open fields off I-10, Texas.

      15
      April 20, 2021
      • David Drinkwater said:
        Love this, but not so close to Dallas.

        3
        April 20, 2021
  4. John Konopka said:
    Apple tends to innovate in steps in plain site. It looks puzzling till it all comes together. It may be that we’ll see some new AR feature next year that relies on the M1.

    Apart from that, the M1 still drives performance in the many apps highlighted in the video.

    12.9” iPad: M1 + Liquid XR display + 5G + 8GB RAM = I’ll order one the moment I can

    6
    April 20, 2021
    • Fred Stein said:
      OMG Yes:

      Apple and TSMC are teaming on advances in display technology. This improves UX in sunlight, i.e. all iOS devices which we use ‘in the wild’. Improved UX means more upgrades across all iOS for several years.

      7
      April 20, 2021
    • David Drinkwater said:
      This is actually a very compelling point.

      The *real* gains of the new hardware may not be obvious until WWDC.

      After that there may be some dropped jaw (or slack-haw) “oh my God, they were setting us up for *this*”!?!

      5
      April 20, 2021
  5. Romeo A Esparrago Jr said:
    Imma getting a 4-pk AirTags to replace my running-out-of-batteries Tiles to start with.
    Then a pair of backwards compatible Remotes for my two 5th Gen AppleTVs.
    Love those candy iMacs! Great for the WAH crowd looking for matching color new computers that will look great in their homes.

    12
    April 20, 2021
  6. David Emery said:
    iMac port configuration is surprising. The low end has (only) 2 TBolt4/USB-C. The mid and high end add 1 GigE and 2 USB-3 ports.

    On the one hand, this gives me hope for a similar 5 port configuration for the 15-16″ MB Pro. On the other hand, I think Apple made a mistake for the low end by not including at least 1 USB-3 port.

    Persistent storage (“hard drive”) sizes are surprisingly small too. 256 and 512. I would have expected at least 1TB for the high end machine.

    (The Gartenberg tweet is bizarre…)

    2
    April 20, 2021
    • John Konopka said:
      You can configure the base model with up to 1TB of SSD and the higher end ones with up to 2TB of SSD. It may be better to get a 1TB model and add an external large drive ( 4TB?) rather than loading up the main machine.

      The port issue is curious. Clearly, those of us who need lots of ports and card readers will need a dock of some sort. I’m guessing that Apple has good statistics on how many people actually use the ports. Maybe lots of people don’t use them? At least not on the base machine.

      This reminds me of the old arguments about needing more card slots in Macs. Turned out that it was a small, but vocal, group that needed lots of slots. I believe they used to make an external chassis that would support extra cards for them. Just like now you can get a dock to extend the number of ports and add a card reader.

      4
      April 21, 2021
  7. Chris Ferebee said:
    I want that 32″ M2 iMac so bad, and I wish they would sell it in purple, which seems highly unlikely.

    And I’m immediately ordering a 12.9” iPad and an Apple TV 4K, and also an AirTag to hide somewhere in my speed-pedelec that was only saved by its ABUS lock the other day.

    That was a top-notch lineup.

    8
    April 20, 2021
  8. Bob Goldstein said:
    I have been waiting to replace my 2013 27″ iMac so I have to wait a bit longer for a larger screen. I haven’t seen a photo of the back. Is there a slot for a memory card. If not how do I get my photos from my cameras into the computer?
    Why is there only the option for 512 gigs of HD storage? My iMac has three terabytes
    I didn’t see anything compelling in the new 4K Apple TV. I have no trouble with the remote, and the picture quality is great already. If the new Apple TV supports Spatial Listening like the iMac then I would consider buying the new Apple TV and the Airpod Max
    I want to replace my 5 year old iPad but I don’t need a Pro so I have to wait on that.
    I have to check out the AirTags. I may want those.
    Yes it’s so obvious that the M1 is just the beginning and it is a game changer

    1
    April 20, 2021
    • Bart Yee said:
      @Bob For stand alone cameras, either you have a cable to port adapter to direct download or some kind of reader dongle will have to suffice. Don’t know if Apple will produce any of that for new iMac. For iPhone photos, my guess is either local AirDrop or WiFi transfer.

      The engagement and lock-in of the convenience of all Apple products ecosystem is on display (pun intended).

      4
      April 20, 2021
      • Bob Goldstein said:
        Thanks Bart, I have a few cameras that I use. Maybe when I get my new iPhone I can transition to that but I enjoy using my cameras

        3
        April 20, 2021
  9. Gregg Thurman said:
    Think Annette, Darla and Tommy of The Mickey Mouse Club singing “Give me an “M”, 1, 2. 3…”

    5
    April 20, 2021
  10. Bart Yee said:
    One thing we didn’t see is an updated iPad mini w/>than A12 chip and better display w/o bezels but it’s only 2 yrs old. Certainly today where Apple was concentrating on was the mid to upper end iPads and iMac.

    Now the base iPad 10.2” (8th gen, 2020), iPad Mini 7.9” (5th gen, 2019) and now Apple TV 4K 2021 all run w/2018-19 A12 Bionic, amortizing the 7nm chip costs even further.

    The iPad Air 4th gen 2020 10.9”, uses the latest A14 CPU. The iPad Pro 4th gen 2020 (both sizes) introduced in Sept. 2020 has the new LIDAR scanner and maxed out A12X chip. Now the new 5th Gen 2020 iPad Pro M1 is shown a scant 7 months later.

    Apple keeps upping the performance ante in iPads and hardware and Android tablets will be lagging behind even more in processing power and power efficiency.

    4
    April 20, 2021
  11. Bart Yee said:
    Apparently the new Apple TV remote will be bundled with the existing Apple TV HD box at same price as a value option and also as a stand alone accessory. Good news for those who dislike the current remote.

    4
    April 20, 2021
    • Romeo A Esparrago Jr said:
      Thx, Bart!
      Can’t wait to try it on my Gen5 AppleTVs.

      4
      April 21, 2021
  12. Bart Yee said:
    A few more details I got from the new product pages:

    AirTags works w/ iPhones and iPads and requires iOS/iPadOS 14.5 or later. Precision Finding ™ requires iPhone 11 or 12 series. AirTags have a CR2032 user replaceable battery, has a one year battery life, & an IP67 (1 meter depth, 30 min.) water resistance rating.

    4
    April 21, 2021
    • Romeo A Esparrago Jr said:
      Thanx, Bart!
      The water resistance will be good news for those who lose things in Canadian lakes.

      4
      April 21, 2021
  13. My commercial photography catalog remains on a fast 4TB SSD. I’m planning to access that drive on the road from the new iPad Pro instead of just the iMAC or a MBP.

    3
    April 21, 2021

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