The Wall Street Journal asks: How will Apple guide?

From Tim Higgins’ “Apple Expected to Post Record Profit, With Strong iPhone, Device Demand” posted early Tuesday on WSJ.com:

Apple Inc. on Tuesday is expected to post a record spring-quarter profit, as customers continue to embrace new iPhones and other devices and investors look for signs the company’s pandemic-induced success will continue…

A top concern for investors when Mr. Cook addresses Wall Street analysts during a public conference call after the markets close Tuesday will be his outlook for the current quarter and details about how prepared the company is to handle the microprocessor shortage roiling the tech and auto industries.

During the pandemic, Apple stopped giving detailed quarterly guidance about sales expectations. Still, investors and analysts will be closely monitoring Mr. Cook’s language to gauge his confidence as the company heads toward the expected September launch of its latest iPhone. The company has delayed plans to pull workers back into the office until at least October from September amid growing cases of Covid-19.

My take: What Horace Dediu said…

There will not be guidance while there is a pandemic.

14 Comments

  1. Apple management treads Occam’s Razor with any prognosis about the impact of microchip shortages. Tim might say they made prior arrangements with suppliers, designed the M1 prior to this chip shortage and it’s all going swell for Cupertino.
    That would infuriate those bureaucrats who conflate almost antique auto semiconductors & 5nm wafers. The chip shortage is impacting car & other consumer product sales (likely iPad) but Apple’s forward planning/chip design team cannot be blamed.

    5
    July 27, 2021
  2. Mark Visnic said:
    I expect Horace is correct. Maybe the market won’t retch this time but, what the market should do and what it often does are two different things.

    5
    July 27, 2021
  3. Brian Loftus said:
    The only guidance I expect from Apple is the timeline for the iPhone launch. Not an exact date but a return but whether they will return to a normal launch window.

    2
    July 27, 2021
  4. Miguel Ancira said:
    Always a negative undertone with the WSJ when it comes to Apple. That is why I cancelled my subscriptilon.

    2
    July 27, 2021
  5. Fred Stein said:
    The WSJ has so many writers write articles about Apple, who rehash commonly held views – no news, no data, no insight. WSJ readers deserve better coverage of the largest market cap public company.

    Fortunately Philip and fellow commenters give us lots of great content.

    4
    July 27, 2021
    • Gregg Thurman said:
      A top concern for investors when Mr. Cook addresses Wall Street analysts during a public conference call after the markets close Tuesday will be his outlook for the current quarter and details about how prepared the company is to handle the microprocessor shortage roiling the tech and auto industries.

      Did somebody with more than a 3rd grade education write that sentence?

      2
      July 27, 2021
  6. Bart Yee said:
    “how prepared the company is to handle the microprocessor shortage roiling the tech and auto industries(?)”

    Uh, M1 and A14 and now in production A15 are all designed and prototyped in-house, and built on dedicated fab lines by TSMC in multiple fabs, plus production capacity is already bought and paid for. Apple graphics chips have now been integrated into SoC packages with the CPU. Some of the power controllers are outsourced and that may be a bottleneck. OLED display drive chips are supplied by Samsung Display with the OLED screens, assuring coordinated supply. Qualcomm via TSMC is supplying under contract all the 5G modems till 2024.

    IMO, the only potential microprocessor chip shortage could be the Intel chips currently used in some Macs and those are being phased out over this next year or two tops.

    So I think Tim can reassure analysts that Apple has secured most if not all of its chip supply chain, barring acts of war, long and major damaging storms or power grid failures.

    5
    July 27, 2021
    • Gregg Thurman said:
      those are being phased out over this next year or two tops.

      In less than two years TSMC will have fabs in Arizona.

      What chip shortage? The shortage is in chips nobody wants to manufacture anymore, and the automotive industry designed into their “advanced” computer systems because they were cheap (at the time).

      An Apple Car with A, or M, series chips will run circles around Detroit offerings.

      2
      July 27, 2021
      • David Emery said:
        I think “Apple branded modems” will actually be more significant for at least phones if not all devices. Like the M processors, an Apple modem can refactor the hardware/software (e.g. using things like ‘software defined waveforms’) to achieve better results with lower power.

        And that’s the problem I see, by the way, with Intel’s big ambitions: https://www.cnet.com/tech/computing/intel-details-comeback-plan-to-leapfrog-chipmaking-rivals-by-2025/ Intel has no control over software, and therefore cannot accomplish the same system-level refactoring that Apple has pulled off so brilliantly with the M-series. That’s part of the technology that most Wall St ANALysts have no clue about, because it’s not represented in balance sheets.

        0
        July 27, 2021
        • Gregg Thurman said:
          I think “Apple branded modems” will actually be more significant for at least phones if not all devices.

          I’m in complete agreement, with an emphasis on 5G Mac, especially MacBooks. Better performance than Intel’s iCore, better than WiFi performance from mostly anywhere, all with best (regardless of class) battery performance.

          A road warrior without a MacBook is handicapped.

          3
          July 27, 2021
      • David Emery said:
        By the way, automotive chips are NOT THE SAME as consumer chips. They have to survive much more stringent environmental conditions. It’s true that usually chips that are environment-hardened implement previous architectures, but that’s as much due to manufacturing as it is to any decision based on ‘price.’

        What I don’t know is the margin on manufacturing those chips, particularly whether ‘yield’ is an issue. It wouldn’t surprise me to learn that setting up a environment-hardened line takes a lot of effort to get chips that pass the required stringent testing.

        3
        July 27, 2021
      • Gregg, Rivian R1S EV looks like a ride a firm hankering to be acquired by Apple might create. Acquisitions are a key growth strategy for Apple. They bought Beats by Dr. Dre. Rivian has a large order for Amazon vans on the books. Rivian dot com gets you there.

        0
        July 27, 2021
        • Gregg Thurman said:
          Wasn’t Rivian featured in AppleTV’s “A Long Way Up”? If so, it spent a lot making the trip possible (charging stations in remote/isolated locations).

          0
          July 27, 2021
          • Oval Headlight openings resemble the kickstand on the ancient Apple Cinema display I use for Post It note brainstorming. “Preforated vegan leather seats” hardly sold me like Ricardo Montalbán did ‘Fine Corinthian leather.’ 300 mile 4×4 range & 0-60 in 3 sec is intriguing.

            1
            July 27, 2021

Leave a Reply