David Emery on Jason Snell: Four scenarios that could spell Apple's doom - 'THIS is spot-on. Either due to the unexpected loss of Cook or to a bad choice later on, Apple could well be ruined by a bad CEO choice.'
on Neil Cybart: The three phases of Apple's gross margins - 'Neil force-fits his bias. Apple’s Pro models sell well because they are worth it. This is due to Apple’s long-term investments: 1) More robust iPhone last longer. The $200 uplift only costs $4/month over 4 years. Higher resale value also reduces the uplift. 2) Investments in silicon mean Apple increases value faster than inflation, while reducing BOM costs. Nearly every product category increases margin with up-sell. This applies to cars, plane tickets, restaurants, etc. Apple excels at this.'
on Jason Snell: Four scenarios that could spell Apple's doom - 'It surprises me that Jason Snell failed to mention the one chief cause for a company’s demise or irrelevance: lack of sustained viable leadership. Company after company that declined did so with the failure to fill the CEO position with outstanding leadership and vision. I worry over Tim Cook’s replacement more than I fear over the other four factors Jason Snell enumerated.'
on Neil Cybart: The three phases of Apple's gross margins - 'Jerry, I think Neil is mostly correct. This year’s iPhone 14 and 14 plus did not offer the improvements normally seen by newest models, namely across the board use of newest A16 chips (production delays and possibly Apple “withholding” chips and features for margin and differentiation purposes. If Apple had actually dropped prices by $50-100 AND discounted the older iPhone 13 by a bit more, sales may have been spurred but margins may have suffered. Plus in pursuing that route, a lower Apple base model price becomes a new norm and expectation, undermining its own pricing power. Given the margin erosion already in the wind from foreign exchange headwinds, Apple took their chances with maintaining prices in the US, Canada and China while raising in the rest of the world to maintain margins elsewhere. Q1 results gives us pause as to how well that price elasticity will work out long run but if gross margins improve, overall revenues may remain flat to slightly down if unit sales drop within 2-4% YoY.'
on Jason Snell: Four scenarios that could spell Apple's doom - 'Scenario #1 Does Android is best competition To Apple iPhone? Any other comparable product where privacy of data is on everyone mind. Scenario #2 Democratic govt in USA and Europe have many high priority issues Scenario #3 What if India China war due to some invasion in northeast similar to Russia inversion of Ukraine. Scenario #4 Something big is cooking at Apple due to almost $7bn spent on R&D in 2022.'
on Which is it, Apple? AR or AI? - 'Apple always knew AI was table stakes. The neural engine Apple added to the A11 Bionic in 2017 has been underutilized by developers to date. The machine learning behind several features is subtle. I expect more focus on it this coming WWDC.'
on Mizuho: PayPal is haunted by the Apple Pay bugaboo - 'Adam, I was super surprised when I wasn’t able to use Apple Cash as an alternate payment method for tap-to-pay purchases. Giving it a 16 digit number and having it be used like a debit card in Apple Pay can’t be that hard. Apple needs to fix this ASAP.'
on Evercore: Top five takeaways from Apple's 10-Q - '“Could easily double the dividend if they wanted to.” That would make me very happy!'
on Mizuho: PayPal is haunted by the Apple Pay bugaboo - 'I do work for a charity and was able to add ApplePay easy peasy. However, it only works on iOS and Apple browsers.'
on Evercore: Top five takeaways from Apple's 10-Q - 'One thing this implies about the buyback. While it is huge it is not big enough to stem the tide of selling that was going on in November and December. And Apple was not in a rush to use it for that purpose either. Maybe they will surprise us with this quarters purchases. This has happened before where they don’t buy back as much stock in the quarter when the share price is being pushed down for various reasons. Still the ratio of buyback spent to dividend spend was about 4.5 to 1. As the approach cash neutral and political noise about buybacks increase they may want to adjust that ratio. Could easily double the dividend if they wanted to.'
on Lawsuits: Rather than defend privacy, Apple invades it - 'Siri: Are you looking for “How to make your big break in Hollywood?”'
on Evercore: Top five takeaways from Apple's 10-Q - 'Anyone find the average price of their share repurchases this quarter?'
on Evercore: Top five takeaways from Apple's 10-Q - 'FX has inched higher since the beginning of the year. I’m inclined to think this upward move will reverse itself late in the quarter. Be that as it may I think the dollar is going to hold an approximate 100 relative value through the end of the year., down ~15% from its 2022 highs.'
on Evercore: Top five takeaways from Apple's 10-Q - 'There are four (4) US Mints located in: Philadelphia; West Point; Denver; and San Francisco. Yet Apple probably prints more money evidenced by point # 3: “Apple’s net cash balance increased from $49B to $54B, which is somewhat unusual as the balance has been working lower towards Apple’s net cash neutral goal.” Hard to achieve “cash neutral” when FCF is around $100 Billion per year and apparently still growing! A great problem to have!!'
on Megatechs pitch in with Turkey-Syria earthquake aid - 'Even Art Deco standards of the 1930s would have helped. No reinforcing in bare concrete is not going to stand a much smaller earthquake.'
