Toni Sacconaghi doubts Musk's attack on Apple has legs (video)

From "Apple's iPhone growth predicated on its ability to get users to upgrade, says Bernstein's Sacconaghi" which aired Tuesday on CNBC:

Toni Sacconaghi, Bernstein analyst, joins 'TechCheck' to discuss his thoughts on Apple's lost supply, if smartphones are getting longer life cycles and whether Elon Musk's attack on Apple's app store business model has any legs.

My take: Elon Musk makes Toni Sacconaghi sound pretty reasonable.

14 Comments

Lalit Jagtap said:

Yes, the Apples growth is driven by not only iPhone but other products and services too. Like iWatch, AirPod Pros and Apple News too.

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November 30, 2022
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Neal Guttenberg said:

2 things right off the bat for me. First, Sacconaghi ignores switchers as part of the reason why Apple could grow the installed base. Do we really know how big the switcher market has been for Apple? Second, he says that most people, as well as Musk, would be satisfied with 15% as the fee on App Store stuff. Musk has said that he feels that fee is 10 times too high so based on what he has said in the past, he feels 3% is the right fee. But, as Sacconaghi points out, joining gives access to 1.5 billion devices. But if he doesn’t like the fee, he could just go based on a web based solution. We could also say that we feel that 8 bucks a month is too much money to be verified by twitter, especially when it has a good deal of unsavory content and individuals.

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November 30, 2022
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- John Konopka said:
  
  Why does Apple have ~1.5B active devices? Because for years they worked to develop a very high quality product line, and a network of stores where you can get service. As Cramer pointed out in the other video Philip posted, Apple is all about the customer. It is not an accident that they have this many users. They earned the right to charge an access fee.
  
  Musk said he might make his own phone to replace iPhones. That is as laughable as everything else he has said.
  
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  November 30, 2022
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Jeff F said:

Elon Musk is a con man. If you read about SpaceX, you’ll learn that Musk has to be “managed” by the adults who are behind the success of that enterprise.

As far as Tesla cars go, I wouldn’t own one if it was given to me. FSD, or AutoPilot, is an out-and-out fraud.

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November 30, 2022
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Joseph Bland said:

@ Jeff:

“Musk has to be “managed” by the adults…”

Thanks! Perfect metaphor for the hubris-laden powerful who are jacking whole countries around. And for what? More power!

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November 30, 2022
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Joseph Bland said:

Two questions Mr. Sacconaghi puts on the table; “are delayed sales perishable?” and “is demand real?”. He raises the “questions”, but leaves them floating in the air like an obnoxious smell. This is so typical of the mealy-mouthed “analysts” dissing Apple. It’s all innuendo, and no solid facts.

The insinuation that Apple smartphones are “bloated” and thus due for a reduction in sales “much like…PC’s” is such a softball lobbed at a known Apple doubter it’s just laughable in its obviousness. To which Mr. Sacconaghi immediately responds by saying that the last two years of massive iPhone sales is just based on “upgrades” and not on actual growth in installed base. And his evidence? Smartphone growth has stalled overall. Ergo, iPhone growth has stalled as well.

Let it never be said that Mr. Sacconaghi was loathe to use a false analogy in his negative attacks on Apple!

Turning to the Musk attacks on Apple, he – of course – defends Musk, lumping him in with others who suck off the Apple teat and demand “fairness” in the price Apple charges for same. His conclusion: Apple’s charging 30% for the first year is a “fairly high level”, even though the rate is halved to 15% in the following years and he thinks that at a 15% rate “everyone would be happy”.

Again, the epitome of mealy-mouthism.

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November 30, 2022
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- Mark Visnic said:
  
  @Joseph For all of Toni’s studied delivery as a thoughtful analyst, his work product doesn’t follow suit. He seems to forget that on a unit share basis the iPhone can grow in a mature global smartphone market by taking share against the still dominant android unit share numbers (the same goes for the Mac vis-a-vis the mature PC market.
  
  I’m not sure if he overthinks his poor conclusions or if his analysis is straight-forward weak. For example, his argument that iPhone sales are stagnating and doesn’t reflect share gains because the installed base hasn’t grown doesn’t square with Apple’s representations about the installed base. Notwithstanding demand that was pulled forward in 2020 and 2021, the unit sales reflect share gains insofar as unit sales aren’t down as they were after 2014 when the introduction of the larger form factor iPhone resulted in robust growth from pulled forward demand followed by moderately declining unit sales for the next 12-18 months.
  
  Apple logically can grow iPhone and Mac unit share despite mature TAMs. It isn’t rocket science to recognize that.
  
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  November 30, 2022
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Rodney Avilla said:

MacRumors reported today that Musk met with Tim Cook today at the space ship. Hopefully we will get some info from the meeting.

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November 30, 2022
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- Mark Visnic said:
  
  Musk tweeted a thank you to Tim for that reported meeting. Detente?
  
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Mark Visnic said:

I just watched the TS video. He correctly notes that the smartphone market is mature and doesn’t invite much overall market growth but, he fumbles the ball when he says, consequently, without new smartphone users to attract, that growth depends purely on the upgrades of a stagnant (implied) installed base. There clearly is another way to grow that he utterly fails to acknowledge: Attracting android user switching. We saw it this year with the declines in low-end (android) smartphones and robust sales of high-end phones. Apple has a lot of room to grow in a mature market by taking share. How can he miss that? He can’t miss that.

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November 30, 2022
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Jeff F said:

Musk just tweeted: “Good conversation. Among other things, we resolved the misunderstanding about Twitter potentially being removed from the App Store. Tim was clear that Apple never considered doing so.”

Yeah, maybe because Elon made it up for the attention whore that he is – how this guy isn’t put in the same box as PT Barnum is beyond me.

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November 30, 2022
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- John Konopka said:
  
  Another comment on this from Kevin Drum:
  
  https://jabberwocking (dot) com/surprise-apple-never-planned-to-kick-twitter-out-of-the-app-store/
  
  Basic idea is that Tim Cook is an experienced adult who has had to deal with the Chinese among other world leaders. Musk is a petulant child by comparison.
  
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  November 30, 2022
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David Emery said:

If Twitter drops most or all of its content moderation policies, will it still conform to Apple App Store requirements? (I hope not, as a matter of ‘App Store value’. I personally have always despised Twitter…)

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November 30, 2022
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- Joseph Bland said:
  
  Doesn’t surprise me to see this “detente”. Folks choose. It’s not Apple’s job to impact that right by banning Twitter. But choosing to advertise there? Completely different issue.
  
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  December 1, 2022
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