U.S. Government Calls for Comment on Web-Apps and Sideloading
03 MAY 2022 - Apple’s lobbying spend hit a new quarterly record in the first quarter of this year. That’s according to a Bloomberg report, highlighted a couple of weeks ago by The Mac Observer. Was the money worth it? Funny thing about lobbying, we don’t really know, do we? Spending may eventually influence people voting on legislation, even if it doesn’t affect folks writing the laws being voted on.
$2.5 million, by the way. Apple spent $2.5 million on lobbying efforts in the March-quarter. That’s nearly 35% more than the $1.86 million Apple spent in the December-quarter, but less than the nearly $3 million Google spent in the March-quarter.
I’m not being funny nor cynical nor sarcastic when I say I don’t know the technical difference between lobbying and bribery. I mean, I know that bribery is illegal. And I know that if you bribe someone, you expect to get a stated goal in return. With lobbying, it seems, you just get to spend money and hope for the best.
Okay, I might be being a tiny bit cynical. It’s just funny to me - darkly comedic - that even while Apple spends more money on lobbying efforts than it’s ever spent before, it keeps getting hit. According to a piece from MacRumors over the weekend, “The National Telecommunications and Information Administration (NTIA) has launched an investigation into competition in mobile app ecosystems. On behalf of the United States Department of Commerce,” the piece says:
…the NTIA is now requesting comments about competition in mobile app ecosystems. The investigation was triggered by an executive order on Promoting Competition in the American Economy from July last year, with the aim of making recommendations for improving competition, reducing barriers to entry, and maximizing user benefit.
MacRumors goes on to say:
The formal request for comment lists in detail how iOS is likely to come under scrutiny as part of the investigation, with questions related to benefits of developing a standalone app for a platform compared to cross-platform web apps, how web apps should operate on mobile platforms, the availability of other methods of app distribution, and app sideloading. Particular attention is given to iOS's “unique barriers” that prevent users and developers from taking advantage of web apps, apps from alternative app stores, or sideloaded apps.
The NTIA is accepting comments from now until 11:59 PM EDT on 23 May 2022. Wherever you land on the issue, I do hope that you will leave a comment. You know… unless you’re cool with lobbyists from Apple, Google, Epic, and Spotify deciding the future of the App Store for App Store users.
EC Charges Apple with Anticompetitive Behavior Around NFC Access in iPhone
03 MAY 2022 - The European Commission has formally charged Apple with another accusation of anticompetitive behavior. On Monday, Engadget had EC Executive VP Margrethe Vestager confirming that her wing of the EU “has formally charged the iPhone maker” with restricting access to Near Field Communication (NFC) technology in the iPhone and boxing out competitors in the mobile payment space. “In a statement,” says the report:
…Vestager said that the Commission had “indications that Apple restricted third-party access to key technology necessary to develop rival mobile wallet solutions on Apple's devices,” adding that the company “may have restricted competition, to the benefit of its own solution.”
Of course, Apple has a solution: Join Apple Pay. In a statement apparently responding to news of the charge, Engadget had Apple saying:
Apple Pay is only one of many options available to European consumers for making payments, and has ensured equal access to NFC while setting industry-leading standards for privacy and security… We will continue to engage with the Commission to ensure European consumers have access to the payment option of their choice in a safe and secure environment.
It seems what the EC has lodged is a “Statement of Objections” to the way Apple currently does business - specifically how points objected to violate EU antitrust regulations. Engadget says Apple “will now be invited to reply to the issues raised and request a meeting with officials…”
Worth noting: The EC’s investigation and charges seem to have come compliments of PayPal and its ilk. 9 to 5 Mac highlights a Bloomberg report on the matter. That site cites “sources familiar with the matter,” who say:
…that PayPal helped “spur a formal antitrust complaint” against Apple and Apple Pay with the European Commission. PayPal, which offers an NFC-based “tap-to-pay” feature for Android users, is not allowed to offer the same option on the iPhone.
That said, the piece says:
Bloomberg says that PayPal was only “one of multiple companies” that made formal complaints about the situation to the European Commission.
Dutch Regulators Firing Up Another Round of Fines Against Apple
03 MAY 2022 - Get ready to reset the tote-board for Apple in the Netherlands. You likely remember the story from the first quarter of the year - the one that had Dutch regulators requiring changes to how the Apple’s App Store handles dating Apps in Holland. The primary concern was that Apple had to let such apps employ third-party payment options, not just Apple’s in-app payment mechanism. Apple agreed, but said that developers would be required to build a separate version of their apps if they went the third party route - a requirement the company later backed off of. The whole time, the Netherland’s Authority for Consumers and Markets (ACM) was fining Apple €5 million a week up to €50 million - the maximum allowed for the alleged violation. Simultaneously, Apple and the ACM were going back-and-forth on plans and proposals.
Toward the end of March, as Apple fines hit the magical €50 million mark, the ACM said Apple had submitted “new proposals,” that it would “assess the substance of these proposals,” and that it would consider the proposals along with “various market participants.” It did and those were rejected… but - to be honest - we all seemed to kind of forget that without the dollar amount climbing week after week. So here comes the ACM to jog everyone’s memory - Apple included.
A piece from MacRumors had the Netherland’s ACM indicating Monday that:
…while Apple eliminating its requirement for Dutch dating apps to create a separate app binary in order to accept alternative payments was an improvement, the company has yet to fully comply with Dutch and European regulations. The statement did not outline the specific conditions that Apple has yet to comply with.
I guess we can get to the crime later though. Let’s jump back to the punishment! According to the report:
The ACM already fined Apple a total of €50 million between January and March for failing to comply with the order, and the competition regulator said it is now preparing a new order with additional penalties that will be published in the coming weeks.
Checking Your AirTag Battery About One Year Later
03 MAY 2022 - When Apple released AirTag about a year ago, the company said the item tracker’s battery would last for about a year. About a year later, you may be wondering whether you need to change that battery.
Sounds like maybe? According to a piece from Apple Insider:
It's impossible to predict with any certainty how long a battery will last, because it depends chiefly on how much it's used. And if the battery in your AirTag does get so low that you need to replace it, your iPhone will notify you.
But maybe you’re going away for a while and don’t want to have to worry. Or maybe “worry” is your default setting and you just want to doublecheck. Easy to do:
Go to the Find My app on the associated iPhone
Select Items at the bottom of the screen
Tap the AirTag in question
Now, if you look in Devices and don’t see it there, don’t freak out. I know I did, but - again - you’re selecting Items at the bottom of the screen, not Devices. Once you find the AirTag in Find My, you’ll see a little battery indicator, just like the one on iPhone. You can make your battery replacement decision based on how full that teeny-tiny indicator looks.
It’s actually kind of crazy that Apple put the battery usage at about a year. The Apple Insider piece has the Cupertino-company saying in a support doc:
Battery life based on an everyday use of four play sound events and one Precision Finding event per day… Battery life varies with usage, environmental conditions, replacement battery manufacturer, and many other factors; actual results will vary.
Who’s pinging their AirTag five times a day? I may have the first day… Anyway - that’s the battery haps with AirTag one year later.
Apple Watch Series 7 Hits Apple Refurbished Store
Image via Apple’s Refurbished Store
03 MAY 2022 - I’m a fan of Apple’s Refurbished Store. I have owned a couple of MacBooks bought through it, and I’m expecting delivery of a refurbished M1 Mac mini today. That said, it would never occur to me to go there for Apple Watch. Not sure why, it’s just not how I think of refurbished Apple products. Maybe next time. A little over six-months into their run, a piece from iDownloadBlog says Apple Watch Series 7 has landed on the renew/reuse site.
As with all of Apple’s refurbished kit, the watches are throughly cleaned, inspected, and tested, meeting the same standards as a brand new device. You’re ordering with a band, so you get one of those. Refurbished watches also come with a one-year limited warranty, as well as 14-days to send it back if you’re not satisfied. All of that at a discount. “You won’t be saving hundreds,” says iDownloadBlog, but a discount none the less. The refurbished 41mm Series 7 starts at $339 - $60 less than the normal $399 starting price. Moving up to the 45mm option raises the starting price to $359.00 - a savings $70 off the standard starting price of $429.00.
There are currently a few colors from which to choose. The Series 7s are currently all aluminum and all GPS only. That’s the thing about the refurbished store, though - things come and go. If you’ve got your heart set on GPS + Cellular or a different case or color, keep checking.
Apple Music Lands on Roku Devices
03 MAY 2022 - I’m not sure who this one is a win for. Then again, maybe it’s just a thing. TechCrunch says Apple Music has turned up on Roku devices. The arrival comes three-years after Apple’s streaming music offering landed on Amazon’s Fire TV devices. As of now, the piece says users should be able to download the Apple Music app “on any Roku device, including its streaming players, Roku TV models and its audio products like the Roku Streambar Pro, among others.”
Folks wondering what took so long may look to the business side. TechCrunch says users can sign up for a one-month free trial for Apple Music through Roku. If they choose to continue, they can do so through Roku for the Apple/iOS price of $9.99-per-month. TechCrunch says that could have been the holdup. “Typically,” the piece says:
...Roku takes a 20% revenue share on channels on its platform, which monetize through subscriptions or in-app purchases. The companies did not publicize their revenue share agreement, however, so it’s not clear if Apple has negotiated a special deal or if it’s decided to abide by Roku’s general terms in order to address Roku’s sizable market of 61.3 million active accounts as of Q1 2022.
Like at least some of those 61 million users don’t have iPhones? As I say, I’m not sure who this one is a win for. Then again, maybe it’s just a thing.
Financial Analysts: It’s Not Apple, It’s the World
02 MAY 2022 - Not a lot of needles moved in the wake of Apple’s record March-quarter earnings, though the ones that did move moved down. Well, most of them.
Apple 3.0 gathered a lot of notes from financial folk. It does not appear that anyone is worried about Apple’s performance. While it’ll do as good or better than whatever competitors it has, trouble in the supply chain, inflation, and Russia’s invasion of Ukraine are all happening on the same planet Apple’s on.
Piper Sandler analyst Harsh Kumar thinks Apple’s substitute for financial guidance “may be considered a disappointment for all the wrong reasons.” Those include stopping sales in Russia, foreign exchange headwinds, the “$4 billion to $8 billion headwind from COVID shutdowns in China,” and the same silicon shortage being faced by every company out there. According to Kumar, Apple’s “fundamentals seem to be headed in the right direction, but the short-term transitory impacts are distorting June quarter results.”
He’s still clapping for Tinker Bell, but - the sound of one man clapping, right? Piper Sandler has an “Overweight” rating on Apple shares. Kumar bumped his price target on the shares down from $200 to $195.
Thinking along a similar line is JP Morgan analyst Samik Chatterjee. Apple Insider highlighted his note. Quoting the site:
Despite the great execution in the March quarter, Chatterjee believes that the upcoming June quarter could demonstrate that the company isn't immune to difficulties in the macro environment. He believes there will be limiting factors on the execution-led upside in the June quarter.
Not that he’s not still into it. Continued “robust” iPhone demand - in this economy - is among the factors that keep him pleased. He’s got a positive rating on Apple shares and a price target of some sort. Friday’s Apple Insider piece says he moved his target from $200 to $205, though that seems wrong for several reasons. First, he’s talking about problems ahead, which sounds like a prelude to dropping targets, not raising them. Additionally, Back on 7 April, Apple Insider had a note from Chatterjee putting his price target at $210. Meanwhile TipRanks has Chatterjee’s Apple price target at $200 as of Friday… so… it is safe to say he has a price target on Apple shares. That target is, more than likely, $200.
Back now to Apple 3.0, which mentions two more lowered targets, without saying why. The excerpt the site ran from Morgan Stanley analyst Katy Huberty talked about not only what was great for last quarter, but also what’s great about the current quarter. Quoting her note:
June quarter demand commentary struck us as notably more positive than other consumer reports this earnings season, with underlying demand trends suggesting Y/Y revenue growth in the June quarter could be in- line to slightly stronger than the March quarter (of 9% Y/Y).
Huberty has an “Overweight” rating on Apple shares. Still, she knows what year it is. She’s lowered her 12-month price target on Apple shares from $210 to $195.
Offering no note of explanation, Apple 3.0 says Deutsche Bank analyst Sidney Ho lowered his 12-month price target on Apple shares. Used to be $210. It’s now an even $200.
I said earlier that most moving targets had moved down. Credit Suisse analyst Sami Badri inched his target up one dollar. Quoting his note:
Apple’s broader ecosystem is supported by Services & a growing installed base, while the company works through supply constraints. That said, increasing macro uncertainty and inflationary pressures will likely result in lower product demand during C2022
He’s got a “Neutral” rating on Apple shares. And yet - Apple 3.0 says he upped his 12-month price target the tiniest bit - from $168 to $169.
Industry Analysts: Apple Only Smartphone Maker with Growth in March-Quarter
Image via Apple
02 MAY 2022 - Financial analysts looking past the rough quarter ahead may be taking the very recent past into account. Remember how iPhone set a March-quarter record despite supply constraints? It seems to have done even better than that.
After Apple’s quarterly earnings report last week, a piece from MacRumors says the industry analysts Canalys, IDC, and Strategy Analytics all published their estimates on smartphone shipments for the March quarter. “They all differ in exact numbers and estimates,” according to the piece, “but across all three reports, Apple was the only maker to have experienced growth in the last quarter.” Looking at the individual firms:
Strategy Analytics put Apple in second-place globally, with growth that was almost not like growth. iPhone grew 0.6% in the firm’s estimation, though - again - from first place Samsung, down 2.7%, to fourth place vivo, down a vertigo-inducing 31.2% - Apple was the only one to see any growth at all
IDC had iPhone growing more and Samsung losing less. iPhone was up 2.2% in that firm’s estimation, while Samsung was only down 1.2%. vivo was also IDC’s biggest loser, with a 27.2% drop
Looking better for iPhone and worse for Sammy were numbers from Canalys. That firm had first place Samsung’s smartphone shipments dropping 8% while iPhone grew 4%. Once again, vivo was the biggest loser, with a year-on-year drop of 30%.
Counterpoint Research: March-Quarter Mac Sales Grew Amid Flat or Shrinking Competition
Image via Apple
02 MAY 2022 - It looks like performance for the Mac compared to its competitors was nearly as impressive as iPhone’s last quarter. 9 to 5 Mac cites new numbers from Counterpoint Research, saying:
Mac shipments grew 8% in the first quarter of 2022, while the top two PC brands saw their own shipments suffer double-digit falls.
While Apple was not the only computer maker to see growth last quarter, it did see the most. According to the firm:
First place Lenovo saw shipments drop 10%
Second place HP saw shipments drop 16%
Third place Dell saw shipments rise 1%
Fourth place Apple saw shipments rise 8%
And in fifth place, an inglorious group of “Others” saw shipments rise 3%
To hear Apple CEO Tim Cook & Co. tell it, it’s interest in Apple Silicon driving Mac sales to new heights. As for what’s hampering the personal computer segment as a whole, Counterpoint points to four points. 9 to 5 Mac lists those as:
“Global inflation is reducing the spending power of consumers and businesses alike”
Russia’s invasion of Ukraine “has created a great deal of uncertainty and concern about the social, political, and economic future”
“Continued component shortages and logistics challenges – especially with oceanic shipping”
COVID-19 lockdowns in China screwed up supply even more than before
Latest AirTag Update Makes “Unwanted Tracking” Sound Easier to Track
02 MAY 2022 - Mystery solved around the latest AirTag firmware update. Last week we heard word of AirTag firmware 1A301. We didn’t know what it did. We didn’t know when we would get it. We only knew that it was out there. Well, we know now what Apple was/is up to. In a support doc, Apple says AirTag Firmware Update 1.0.301 tunes the “unwanted tracking sound to more easily locate an unknown AirTag.”
The company also gives users instructions on how to see what version of the firmware their AirTag is running. To do so:
Open the Find My app.
Tap the Items tab.
Select your AirTag in the list of items.
Tap the name of your AirTag, and the serial number and firmware version will appear.
If you want to force the update, you still can’t. Apple simply says to make sure you’re running iOS 14.5 or later on an associated iPhone, make sure your AirTag is within Bluetooth range of the iPhone now and again… and that should do it. Eventually.
Countdown to Mother’s Day
Image by Wokandapix from Pixabay
Score Mother’s Day Discounts with Apple Pay
02 MAY 2022 - Sound the alarm: Mother’s Day is next Sunday 8 May. Two things for it from Apple - three if you count the Mother's Day Gift Guide, which looks a lot like the Father’s Day Gift Guide, the Christmas Gift Guide, and the Arbor Day Gift Guide… We’ll look instead at two other things that aren’t Apple selling Apple.
iDownloadBlog has word of a few promos and discounts for Apple Pay users. According to the piece:
Using Apple Pay and the code APPLEPAY will get you $15 off an order of $40 or more through 1-800 Flowers
Using Apple Pay and the code APPLEPAY will get you 20% off of fragrances, body care, and other items at Apoktheke
And finally, using Apple Pay and the code APPLEPAY2022 will get you 25% off personalized gifts, decor, and more from Zazzle
The deals are active now. They’ll run through 11:59 PM EDT on Sunday 8 May - AKA Mother’s Day 2022.
It’s Not Called “It’s Mother’s Day, Charlie Brown”
If Mother’s Day is less about buying gifts and more about spending time together (in front of the television), Apple’s got you covered there as well - or will by the weekend. Apple TV+ issued a press release last Friday, announcing a trailer for a new Peanut’s special, “To Mom (And Dad), With Love.” According to the release:
“To Mom (And Dad), With Love” is a sweet Mother’s Day celebration of friendship and family featuring the beloved Peanuts gang. While the other kids are excited to celebrate the special day, for Peppermint Patty it’s just a reminder that she didn’t grow up with a mom. With her good friend Marcie by her side, she soon realizes that real families come in all shapes and sizes, and that Mother’s Day is an opportunity to thank that special person in your life who means the most to you.
Also, Snoopy and Woodstock do something.
You can catch the trailer for the new Peanuts special below. “To Mom (And Dad), With Love” hits Apple TV+ on Friday 6 May. That is just ahead of Mother’s Day, which - not to freak you out - is Sunday 8 May.
Television Academy Honors Honors Apple TV+ Documentary “The Year Earth Changed”
Image via Apple
02 MAY 2022 - Add another accolade to Apple’s television roster. The company issued a press release late last week, saying the Apple TV+ original documentary “The Year Earth Changed” had been honored by the Television Academy Honors. It sounds like a place for good programming that still managed to miss out on awards. According to the press release:
The Television Academy Honors celebrates a diverse range of programming that explores and confronts significant issues facing our society in a compelling and impactful way and acknowledges showrunners and producers who tackle complex social challenges to advance change.
See? Sounds like good stuff that totally deserves to be honored, but totally misses out on trophies.
If this one missed your radar, the press release says “‘The Year Earth Changed’ takes a fresh approach to the global lockdown and the uplifting stories of the natural world that have come out of it.” It’s available to view now on Apple TV+.
Apple TV+ Series “Pachinko” and “Slow Horses” Renewed for Second Seasons
02 MAY 2022 - News of second rounds for a couple of Apple TV+ series. The Cupertino-streamer issued a press release Friday announcing a season-two order for “Pachinko.” If you’ve not seen it, the release says:
Epic in scope and intimate in tone, “Pachinko” tells an unforgettable story of war and peace, love and loss, triumph and reckoning. The new season will continue the riveting story that spans generations and is told across three languages — Korean, Japanese, and English.
“Pachinko” chronicles the hopes and dreams of a Korean immigrant family across four generations as they leave their homeland in an indomitable quest to survive and thrive. Starting in South Korea in the early 1900s, the story is told through the eyes of a remarkable matriarch, Sunja, who triumphs against all odds.
Word of the renewal came on the same day as the season-one finale. That does, of course, mean the entire first season is available to stream now on Apple TV+. No word on when the second season will debut.
Shifting focus to a modern-day UK, a piece from The Mac Observer says the British secret service series “Slow Horses” has also been picked up for a second season, and it looks like filming has already begun. The first season of that series also ended on Friday. TMO says the season finale is capped with a trailer for next season.
No hard release date on this one, though James Hawes, the series’ director, says season two will hit sometime this year. You can catch the full first season now, on Apple TV+.
Star Wars-Centric “Behind the Mac” Hits YouTube May the Fourth
Image via YouTube
02 MAY 2022 - And finally today, If you’re an Apple nerd, a film nerd, or a Star Wars nerd, there’s a film hitting YouTube you may want to see. MacRumors has word of a teaser for the next “Behind the Mac.” The piece says this one features “the sound effects division of Lucasfilm…” Lucasfilm has been the driving force behind a lot of movies - almost none of which matter this week, since this week is Star Wars week. Or really, Wednesday is Star Wars day. Taking a look and listen to how noise makes the move from our world to the land of the Jedi, the Skywalker-centric “Behind the Mac” lands on Apple’s YouTube channel on Wednesday - May the fourth be with you… between now and then, you can catch the teaser below.
Another Record Quarter for Apple (But?)
29 APRIL 2022 - Good news behind and choppy seas ahead. That might be one way to describe Apple’s 2Q FY2022 earnings. The Company posted record March-quarter revenue of $97.3 billion on earnings per share of a buck-52. The $97 billion in revenue was up 9 percent from the same quarter a year earlier. That included March quarter revenue records for iPhone, Mac, and Wearables/Home and Accessories, as well as an all-time revenue record for the company’s Services segment. It also marked record March-quarter revenue for the Americas, Europe, and Greater China, according to Apple CFO Luca Maestri.
Bless the folks at CNBC for laying Apple’s reported numbers alongside Wall Street’s great expectations. Great in terms of size, not accuracy. As it often does, Apple beat the Street with most of its March-quarter numbers. According to CNBC:
Record March-quarter iPhone revenue of $50.6 billion beat the Street’s expectation of $47.9 billion
Record March-quarter Mac revenue of $10.4 billion beat Wall Street expectations of $9.25 billion
iPad revenue set no records - falling nearly two-percent year-on-year. That said, the $7.65 billion delivered on Apple’s tablet beat the Street’s expectation of $7.1 billion
While Wearables, Home and Accessories revenue of $8.8 billion did set a March-quarter record, it just missed Wall Street’s estimate of $9 billion
Services revenue crushed it, setting an all-time revenue record $19.8 billion. That barley squeaked by the Street’s expectation of $19.7 billion.
Gross margin came in at 43.7%, beating Wall Street’s expectation of 43.1%
And finally, March-quarter revenue of $97.3 billion beat consensus estimate of $93.9 billion
In Apple’s press release on the numbers, Apple CEO Tim Cook said:
This quarter’s record results are a testament to Apple’s relentless focus on innovation and our ability to create the best products and services in the world… We are delighted to see the strong customer response to our new products, as well as the progress we’re making to become carbon neutral across our supply chain and our products by 2030. We are committed, as ever, to being a force for good in the world — both in what we create and what we leave behind.
Of course, he said a lot more than that on the call. Let us get to that, shall we?
The Softer Side of Apple
After a short preamble trumpeting the many records set last quarter, Cook stopped to address two of the world’s biggest stories: Russia’s invasion of Ukraine, and the ongoing COVID pandemic.
Worth noting - he did not mention “Russia’s invasion.” Rather, he acknowledged “the humanitarian tragedy unfolding in Ukraine.” The CEO says Apple is supporting its team in the region, donating to humanitarian efforts, and donating gear “to support refugees arriving here in the United States.”
As for the pandemic, Cook says he and his are stoked to welcome workers back to the office in Europe and the U.S. - this as the company keeps and eye on “COVID-related disruptions in China.” In the meantime, Apple will keep doing what it does, “driving the innovations that can enrich people's lives.”
The Latest MacBook Pros - Image via Apple
Big Mac Attack
And there’s our transition into business, with the CEO highlighting the Mac and its transition to Apple Silicon - shout out to M1 Ultra. Interest/excitement around Apple Silicon helped push Mac revenue last quarter up 15% versus the same quarter a year earlier despite not having as many Macs to sell as people wanted to buy. CFO Maestri says the last seven-quarters have been the best seven-quarter ever for Mac. In the March-quarter, Apple saw a record number of upgraders - and yet half of last quarter’s Mac buyers were getting a Mac for the first time.
Imagine how well it would have done if they’d had enough of them?
The iPhone 13 Line - Image via Apple
iPhone
Moving on from the Mac, Apple’s CEO trumpeted the two new green iPhones, as well as iPhone SE. Cook says people who like smaller form factors love it, as do people buying iPhone for the first time. That said, it was apparently the iPhone 13 family that pushed iPhone revenue up 5% year-on-year, despite a tough compare. iPhone set records in both developed and emerging markets, according to CFO Maestri. Here in the states, the latest from 451 Research has customers satisfaction with the iPhone 13 line sitting at a practically unfathomable 99%. Such satisfaction led the iPhone active installed base to a new all-time high across all geographies, according to the CFO.
iPad - Image via Apple
iPad
What can you say about iPad? They’re great when people can get them, which they’e having a hard time doing. CEO Cook says demand is there. Of course, supply is lagging - something Apple said would happen on the last earnings call. Revenue was down two-percent versus the same quarter a year ago, due to continued supply constraints. Like the rest of Apple’s hardware, iPad’s installed base hit a new all-time record in the March-quarter. And - just like the Mac, half the people buying iPad last quarter were walking away with their first iPad.
Image via Apple
WHA?
The category Wearables, Home and Accessories saw revenue rise 12% year-on-year. That’s Apple Watch Series 7, Apple Watch SE, HomePod mini, and AirPods doing their respective things, and helping the category to March-quarter revenue records in both developed and emerging markets. Shoutout from the CFO to the Wearables segment of the segment. That part has doubled in size in the last three years, putting it on par with Fortune 100 companies. And it is growing by leaps and bounds. According to Maestri, two-thirds of people buying Apple Watch last quarter were new to the product.
Services
As mentioned earlier, Services set an all-time quarterly record for Apple. The $19.8 billion in revenue was up 17% from the same quarter a year earlier. That’s Apple TV+, Fitness+, and more. CFO Maestri says Services realized “March quarter records in every geographic segment and services category.” That included “all-time records for the App Store, Music, Cloud Services and Apple Care and March quarter records for video, advertising and payment services.”
Transacting accounts, paid accounts, and accounts with paid subscriptions all hit all-time highs last quarter in every area Apple tracks. Spotlight on Paid Subscriptions: Apple now has more than 825 million of those, up more than 165 million over the last year.
Apple Tower Theatre Los Angeles - Image: Ken Ray
And the Rest…
Apple’s CEO bragged on a couple of new stores opened over the last couple of months - one in the UAE and Apple’s third and largest store in South Korea. He also heralded the return of “Today at Apple” sessions at actual Apple stores here in the states. Cook also offered thanks to folks “working in Apple stores, customer care centers, channel partner stores and [in] Apple Care teams for bringing customers the best of Apple.” There was also a swing back to the softer side, with Cook highlighting Apple’s work toward a cleaner environment, a greener supply chain, a more inclusive workforce, and programs to help further skills, education, and opportunities for people who work for Apple, as well as people outside the company.
Addressing Apple in government and the enterprise, the company’s CFO highlighted a program piloted by Alaska Airlines, replacing traditional check-in kiosks with iPads. He also shouted out that Australian police force that’s kitted its cop cars with CarPlay. And he offered a quick plug for Apple Business Essentials.
Looking Ahead
As expected, Apple did not offer revenue guidance, “given the continued uncertainty around the world in the near-term,” according to the CFO. But, there’s always room for color.
A number of factors are likely to negatively impact the June-quarter, in the company’s estimation. Among them:
COVID shutdowns plus the ongoing chip shortage are making it hard to make supply and demand come together. That’s going to put a drag on the company somewhere between $4 billion and $8 billion - “substantially larger” than what Apple saw last quarter, according to Mr. Maestri.
COVID-related disruptions are also having some impact on customer demand in China.
Foreign exchange headwinds will likely hamper Apple’s growth
Killing sales in Russia will likely hamper Apple’s growth
Services will grow double-digits, though that growth will be slower than it was last quarter, due to the aforementioned issues.
Interesting to note: As far as return of capital, Evercore analyst Amit Daryanani and others got most of what they wanted. Daryanani had expected a dividend increase of 6-7% and at least $90B in additional buyback authorization. The $90B he got, though the dividend was only raised 5%. “Apple’s board of directors has declared a cash dividend of $0.23 per share of the Company’s common stock,” according to Apple, “payable on May 12, 2022 to shareholders of record as of the close of business on May 9, 2022.”
Are you there caller? I’m glad you waited…
Morgan Stanley analyst Katy Huberty had a macro question. She wanted the Apple executives’ thoughts on consumer spending, given the current market volatility, inflation concerns, and so on. How is that affecting or how will that affect consumers’ ability to buy what Apple’s selling? CEO Cook says it is something Apple’s keeping an eye on, though the bigger concern for the company right now is trying to meet demand with supply.
Evercore analyst Amit Daryanani had a couple of questions about the $4 billion to $8 billion headwind. Will that be sales deferred or sales destroyed? And can you say which products will be hardest hit?
Earlier in the call, CEO Cook had pointed out that the 4-to-8 range had to do with how long factories in China - particularly in the Shanghai corridor - will take to ramp back up to full production. Nearly all of those factories have restarted, which is cause for optimism as far as he’s concerned. To Daryanani’s question, most product categories will be affected. As to whether sales are deferred or destroyed - some and some. If a person needs a piece of hardware quickly, that sale could be lost. What that ratio will be - Apple has thoughts on it, but those are not thoughts the company was willing to share.
Citigroup analyst “Gentleman” Jim Suva wondered wether all of the disruption in the supply chain has Apple rethinking the supply chain. Like, when there are enough components to stockpile, will Apple stockpile? Or stick with just-in-time inventory?
“In this business,” said Cook, “you don’t want to hold a ton of inventory.” That said, he thinks Apple has managed moving through the madness of the past couple of years pretty well. Apple learns something new every day, and applies that learning to its business.
JP Morgan analyst Samik Chatterjee wondered where iPhone SE was strongest. Since Apple’s competitors probably wonder that as well, Apple’s CEO declined to answer. He did, however, sing a song of iPhone 13 strength.
BofA analyst Wamsi Mohan had a question that hasn’t been asked for a while. Despite returning capital to shareholders, Apple is still sitting on a ton of cash. Why not buy something big in the healthcare space or the fitness space or the content space?
CEO Cook says if Apple found the right big thing to buy it would buy that thing. Until then, they’ll keep buying small companies for the intellectual property and talent they bring to the Cupertino table.
More, More, More…
That was not all of the questions, nor all of the analysts. If you want to grok the fullness, the call is up to replay on Apple’s Investor site and will be for the next couple of weeks. It is now available as a podcast and will be for the next couple of weeks. And I have to blow a big Mac OS Ken kiss to Seeking Alpha for their transcript of Thursday’s call.
Demand is there, but choppy seas ahead. How does the Street like Apple’s acumen through June? We’ll check analyst reaction to Thursday’s call next week.
One More Note Ahead of Apple Earnings
Show Evercore Analyst Amit Daryanani the Money!
28 APRIL 2022 - Pencils down, people - time for one more note from the financial front ahead of today’s March-quarter earnings report from Apple. Today’s theme: Returning capital to investors. Apple 3.0 ran part of a note from Evercore analyst Amit Daryanani.
Despite supply constraints and manufacturing shutdowns in China, AD-Rock thinks Apple will deliver another quarter of growth. Now show him the money. According to his note:
Apple typically provides a capital allocation update during the Mar-qtr earnings report and we expect them to increase both the buyback authorization and the quarterly dividend. The dividend will likely increase by 6-7% (+7% in Mar-21) and we expect at least $90B in additional buyback authorization (up $90B in Mar-21).
Growth for iPhone? That’s fine. New products on the horizon? Whatever! “Capital returns remain central to the Apple bull thesis,” according to Daryanani, “so a better than expected authorization could contribute to some post-earnings upside.”
Daryanani has an “Outperform” rating on Apple shares. His price target on the shears is $210.
Waiting on a Call
And now we simply count down the hours. Apple’s 2Q FY2022 earnings report and associated call are set for this afternoon. Earnings for the March-quarter will hit Apple’s site after the closing bell at 1:30 Pacific/4:30 Eastern. The the call between Apple CEO Tim Cook, CFO Luca Maestri, and a slew of financial analysts is set for 2PM/5PM. You can catch the call live on Apple’s Investor site. It’ll also be available to replay there for a couple of weeks. Apple will also make the call available as a podcast soon after, though that’ll also only be available for a couple of weeks. And - of course - we’ll do our best to recap what we can here, after the call.
Cult of Mac: February MacBook Pro Orders Pushed Out to June
Image via Apple
28 APRIL 2022 - Something that is likely to come up a time or two in today’s earnings call is problems in the supply chain. Those seem to be persisting. Just ask people who ordered a MacBook Pro a couple of months ago and won’t be getting said MacBook Pro for another couple of months. A piece from Cult of Mac says, “People who ordered a top-tier MacBook Pro in February are being notified that it won’t be delivered until June.” One of their readers tells the site:
We put our order in on February 6th, and they’re now quoting June 14 to June 28 for fulfillment… Over four months to get a machine is an enormous amount of time.
That person is not wrong. Of course, it’s also not Apple’s fault. The Cult says the problem is all of the “COVID-19 lockdowns in China hampering notebook assembly.” According to the report:
Quanta Computing is the only company that assembles high-end Apple notebooks, and a COVID-19 lockdown near Shanghai forced the temporary closure of some its facilities in mid-March. However, it’s been able to restart limited production, with “Apple’s Mac as the 1st priority,” according to TF International Securities analyst Ming-Chi Kuo.
No offense to Cult of Mac, but is seems unlikely that closures in Mid-March are the only thing pushing orders placed in early February out to late June. Earlier this week we hit a story about worries around iPhone manufacturing. In that story, 9 to 5 Mac argued that:
The biggest issue is not with CPUs and GPUs, but far more mundane chips like display drivers and power management systems. These relatively low-tech chips are used in a huge number of devices, including Apple ones.
One imagines that that is hurting Mac production as well. Maybe somebody will ask about it on today’s call.
Notes from Planet iPhone
Report: “Make in India” Makes Newer iPhones More Attractive
28 APRIL 2022 - Whether to take some of the strain off of China or just to make sales easier elsewhere, two stories today of iPhones made in other places. India’s Business Standard starts us off, with news of Apple shipping one-million “Make in India” iPhones last quarter - a number the site calls “a massive jump of 50 per cent in iPhone shipments from within the country,” versus the same quarter a year earlier. That is according to data from CyberMedia Research (CMR).
Prabhu Ram, head of Industry Intelligence at CMR, says making newer iPhones in India is making those phones more appealing. Imported iPhones face huge tariffs, driving up each phone’s price. iPhone’s made and sold in the country avoid that tariff, and apparently get picked up by consumers. According to CMR’s Ram:
With its enduring brand appeal, Apple continues to attract premium buyers. This is a break from the past when older-generation iPhone models gained consumer favour through aggressive and attractive price offers…
“As Apple further diversifies its manufacturing base,” says the analyst, “the newer generation iPhone models will fuel Apple's India growth story.”
Report: Apple Making iPhone 13 in Brazil
On the other side of the globe, it looks like Apple’s making more iPhones in Brazil. Well… Foxconn is, on Apple’s behalf. 9 to 5 Mac says the contract manufacturer “has started assembling the iPhone 13 in Brazil…” That is the Goldilocks iPhone 13 - no minis in the mix and no Pros either.
Not unlike India, 9 to 5 Mac says:
Brazil imposes high taxes on imported products, which includes almost the entire range of Apple devices. For that reason, there are some companies that invest in the local assembly process, as this grants a reduction in taxes to sell those products.
Apple’s iPhone Self Service Repair Program Launches in U.S.
Image via Apple iPhone 13 Repair Manual
28 APRIL 2022 - Good news for you do-it-yourselfers: Apple’s Self Service Repair program has opened for folks in the U.S. Engadget ran a report Wednesday saying that people with:
…an iPhone 12, iPhone 13 or third-generation iPhone SE, (…) can buy key parts (such as batteries, cameras and displays) from a dedicated store and consult official repair manuals as you fix a device yourself. You can even spend $49 to rent a toolkit for a week if you'd rather not buy tools you're unlikely to use often.
“The program will expand to other countries later this year,” according to the piece, “starting with Europe.” It’ll also expand to include Macs later this year, though only those of the M1 variety.
Right-to-Repair-Bears Sort of Stoked (But Only Sort of)
While right-to-repair advocates see the program as a step in the right direction, they would like to see more. MacRumors had iFixit's Elizabeth Chamberlain indicating in a blog post Wednesday that:
…the biggest problem with Apple's program is that parts must be paired with a device. When purchasing parts from Apple's Self Service Repair Store, a customer must enter a device's serial number or IMEI, and any parts ordered need to be paired with the same device after installation.
The way she sees it, that pairing “sets Apple up as the gateway to approve—or deny—any repairs in the future, with parts from any source.” That said, she does like the free peek Apple’s giving everyone under the hood. Apple has posted repair manuals for iPhone 12, iPhone 13, and the latest iPhone SE - and that makes Chamberlain happy. As she will tell you. Quoting her post:
Image via Apple iPhone 13 Repair Manual
We are really happy to see Apple making repair manuals available for everyone for free online. Like, seriously happy. Like, we've-been-asking-for-this-for-twenty-years happy.
She’s also cool with the tool sales and rental from Apple. And seems to see the program as a good start. Quoting Chamberlain one more time:
At least Apple is getting some of their homework done in advance… Manufacturers know the right to repair is coming—we'll get the rest of their assignments in due time.
Less enthused is Nathan Proctor, the right to repair campaign director of the U.S. Public Interest Research Group. While a piece from Apple Insider has Proctor saying that his org is “really pleased to see” the program, they’d like to see some ease to the program. The piece has Proctor saying:
While this is a start, there are still too many hoops to jump through to fix phones. As it's becoming clear that Apple and other manufacturers can give us the Right to Repair, we should require them to… And we should have more options. Not just one set of parts. Not just a few manufacturers. No product should be tossed in the scrap heap, wasting money and adding to our toxic electronic waste problem, because the manufacturer doesn't properly support repair.
But he’s really pleased…
NIH: Underserved Communities Underrepresented in Wearables Medical Study
Apple Watch SE - Image via Apple
28 APRIL 2022 - Smart watches like Apple Watch are the future of personal health.*
Ooo! There’s and asterisk! What does it say? It says:
*Statement applies to people who can afford them.
9 to 5 Mac ran a piece Wednesday on a new study from the National Institutes of Health (NIH). According to the docs who say “nih,” there are “inequalities within the ownership of smartwatches and wearable technology.” The piece has the report saying, “The study finds that those who own smartwatches tend to be young, white, educated, and wealthy.”
For this particular study, what the NIH is trying to do is build “a health database representative of the United States.” When it came to wearables though, the info they got back was mostly from the white and well off. Quoting the study:
[R]espondents who were interested in using an activity monitor made it clear: their lack of use wasn’t because they were unwilling to use devices or contribute the resulting data to research. They cited cost barriers (49%), the need for support in using the devices (19%), and a lack of a clear understanding of the potential value of these devices to their health (16%).
If I were being cynical, I would argue that a health study that’s too expensive, hard to manage, and pretty opaque is representative of the U.S. According to 9 to 5 Mac:
It’s not that people who don’t fit these measures don’t want smartwatches, it’s that the devices are too expensive. Since high costs of wearable technology turns off underrepresented groups, it leaves them excluded from medical research involving these devices.
{whispers} it also leaves them excluded from the benefits of these devices