iPhone in China: Strength and Supposition
05 AUGUST 2022 - A positive prediction for iPhone in China. A piece from Apple 3.0 has Mizuho analyst Anthony Huang indicating that the strength seen for iPhone in June in the Middle Kingdom will keep on keeping on through the rest of the year.
Huang is among the analysts crediting Apple’s communicator for almost all good news for smartphones in China this summer. Citing numbers from the China Academy for Information and Communications Technology, his note says:
We believe the bulk of the y/y rebound [in June] was from iPhones while Samsung no longer commands a significant share of [China’] mobile phone market. iPhone 13 sell-through demand appeared resilient per our industry survey, as the phones continued to be in the dominant position in the high-end segment without much competition from Android camp. Superior execution along Apple supply chain and good logistics management has also prevented inventory overbuild and destocking risks.
Huang’s note also notes the lackluster performance of domestic smartphone brands. While he does expect new offerings from those through the rest of the year, orders in the supply chain don’t show them expecting much in the way of demand. The most he expects from the Chinese brands is a “moderate seasonal uptrend…” Apple, meanwhile, is expected to go as it’s been going - and it’s been going well since the last lockdowns ended in May.
What Does It Mean?!?
If you’ll permit me - I’d like to revisit an idea we hit here last week. It was then that Bloomberg ran a report saying that Apple was running a four-day sale for iPhone in China. While sales on iPhones aren’t unheard of, Apple running such a sale itself is very, very, very uncommon. Bloomberg’s assumption was that Apple was sitting on inventory that it wanted to move ahead of new product coming this fall. Now, a piece from 9 to 5 Mac seems to have decided the same thing.
Pointing to the cratering of China’s smartphone market, as well as numbers from Canalys, the headline from 9 to 5 Mac says, “Chinese smartphone shipments set to fall to 10-year low, explaining Apple discounts.” Except no it doesn’t. Not definitively. I mean, it might. Personally though, I doubt it for a few reasons:
Once the lockdowns ended, iPhone sales exploded - no discount required. There was a shopping-centric holiday in the second half of June, but when people spent they’re money, they spent it - full-price - on iPhone
The discount on Apple products referenced by 9 to 5 Mac was for four-days. If Apple really wanted to clear out inventory, wouldn’t it simply drop the price - not just drop it for a limited time?
Mizuho’s Huang credits Apple’s acumen, not a lowering of prices for preventing “inventory overbuild and destocking risks”
Finally - there’s something people keep forgetting about the four-day sale. In its report on the discount, Bloomberg said to take advantage, shoppers had to use “one of a select number of payment platforms, such as (…) Alipay.” I asked last week whether the four-day sale with the special payment requirements could be some sort of promotion for the payment methods required, not a fire sale on Apple’s part?
It makes sense that the initial thought would be Apple’s trying to burn through inventory. If you take a sec though, it doesn’t actually look like they’re trying to burn through inventory.
Not to me, anyway. But I could be wrong.
Reports: Apple and Foxconn Ramping iPhone Production in India
05 AUGUST 2022 - There’s word in the world that Apple is looking to up its iPhone game on the subcontinent. MacRumors cites a report from The Economic Times saying:
Foxconn, Apple's largest supplier, is looking to further expand its presence in India with the opening of a new production facility within an existing factory in the country to produce the iPhone…
One wonders what iPhone they’ll be building. To this point, one might have assumed iPhone 13 or earlier, though TF International analyst Ming-Chi Kuo may have thrown a spanner in that assumption. While lots of you were sleeping Thursday night/Friday morning, the analyst hit Twitter with a three-post thread. Quoting the first:
My latest survey indicates Foxconn's iPhone production site in India will ship the new 6.1" iPhone 14 almost simultaneously with China for the first time in 2H22 (India being one quarter or more behind in the past).
“In the short term,” says the second Tweet:
…India’s iPhone capacities/shipments still have a considerable gap with China, but it's an important milestone for Apple in building a non-Chinese iPhone production site.
He wraps with Tweet number three, saying:
It implies that Apple is trying to reduce the geopolitical impacts on supply and sees the Indian market as the next key growth driver.
That snuggles in nicely with the MacRumors/Economic Times piece. It says the new iPhone facility inside the existing Foxconn factory “is part of Apple's goal to further diversify its supply chain.” Yes, it’s still almost-all-Foxconn almost-all-the-time. It’s not all China, though.
Apple Says It Botched Handling of Sexual Misconduct Claims
05 AUGUST 2022 - The Financial Times ran an absolutely brutal piece on Apple on Thursday. After talking to “More than a dozen employees past and present,” the story is one of “Apple’s HR team [putting] the company’s reputation ahead of worker welfare.” It’s about “women calling out Apple’s handling of misconduct claims.”
All of that’s in the first couple of lines of the story. I did read a lot more of it, and - assuming it’s true, it’s terrible. And there’s no reason to think it’s not true. Especially because, buried about a third of the way into the story, the piece says:
In response to the FT’s findings, Apple said in a statement it works hard to thoroughly investigate all misconduct allegations, and that it strives to create “an environment where employees feel comfortable reporting any issues”.
The company acknowledged it had not always met those ambitions. “There are some accounts raised that do not reflect our intentions or our policies and we should have handled them differently, including certain exchanges reported in this story,” Apple said. “As a result, we will make changes to our training and processes.”
Microsoft Teams Updated to Run Natively on Apple Silicon
05 AUGUST 2022 - If you use Microsoft Teams on an Apple Silicon powered Mac, you’ve been living a lie! Not really. You’ve been living a translation! But those days are coming to an end at some point. Engadget had Mr. Softy announcing that Microsoft Teams had finally been optimized for Macs without Intel inside. Of course Microsoft didn’t say “finally.” That was all Engadget. According to the report:
The updated app comes nearly two years after Apple revealed its first Silicon-powered M1 devices. So far, Teams has run using Rosetta 2 translation, resulting in performance issues like slow startup times, lag and more.
Addressing the update, Microsoft said:
For Mac users, this means a significant boost in performance, ensuring efficient use of device resources and an optimized Teams experience even when using multiple high-resolution monitors during calls or meetings.
That’ll be great. Someday. For reasons not fully explained, Engadget says Mr. Softy plans to release the update “in increments over the coming months.”
Animated Feature “Luck” Lands on Apple TV+
05 AUGUTS 2022 - Part two of this week’s animation doubleheader hits Apple TV+ today. We talked earlier this week about the Pixar versus Pixar showdown headed to streaming services. That started with Pixar’s Lightyear hitting Disney+ midweek. Now Luck, a film shepherded by former Pixar creative John Lasseter, has landed on Apple TV+.
Funny thing: After that story earlier this week, I caught a post on Twitter from screenwriter Zach Stentz. He’s turned on by another animated feature on another streaming service. He says The Sea Beast on Netflix “is first rate.” He’s hoping “it ends up in the awards conversation” by the time that season rolls around.
Could be a whole, big cartoon weekend, round these parts.
Apple Extends Free Friday Night Baseball Through September, Adds New Countries
05 AUGUST 2022 - And finally today, it sounds like a full season of free Friday Night Baseball on Apple TV. MacRumors says not only has Apple announced the schedule for Friday night games for September, the company has also expanded the number of countries that can get in on the action. Added to the list are Colombia, the Dominican Republic, Germany, and Italy. They join Australia, Brazil, Canada, Japan, Mexico, South Korea, the UK, and the US in taking in America’s pastime.
Still available without a subscription, MacRumors says “‘Friday Night Baseball’ debuted on Apple TV in April and will continue through the 2022 regular season, which ends October 5.” That sounds like a full season of free Friday Night Baseball on Apple TV.
If you’ve still not given the games a go, the piece says:
The weekly doubleheaders, and additional content like live pregame and postgame shows, can be watched in the Apple TV app across the iPhone, iPad, iPod touch, Mac, Apple TV 4K and Apple TV HD boxes, select Xbox and PlayStation consoles, select smart TVs from brands like Samsung and LG, on the web at tv.apple.com, and on select other platforms.
Basically, throw a fastball and you’ll hit something on which you can watch the games. If you don’t care who’s playing where, enjoy your Friday night games. If you’re a more discerning viewer, the schedule is as follows:
Friday, September 2
Miami Marlins at Atlanta Braves
7 p.m. ET
Philadelphia Phillies at San Francisco Giants
10 p.m. ET
Friday, September 9
Cleveland Guardians at Minnesota Twins
8 p.m. ET
Atlanta Braves at Seattle Mariners
9:30 p.m. ET
Friday, September 16
Baltimore Orioles at Toronto Blue Jays
7 p.m. ET
Los Angeles Dodgers at San Francisco Giants
10 p.m. ET
Friday, September 23
Boston Red Sox at New York Yankees
7 p.m. ET
St. Louis Cardinals at Los Angeles Dodgers
10 p.m. ET
Morgan Stanley Tracks 1% Growth for App Store in July
04 AUGUST 2022 - Good news …ish… for Apple investors. Seeking Alpha has Morgan Staley analyst Erik Woodring saying that App Store growth slowed to 1% last month versus the same month a year ago. You may wonder why that’s good news. Well it’s not really, until you remember Evercore analyst Amit Daryanani saying earlier this week that July marked the first zero-growth month for the App Store since its launch 14-years ago.
In your face… whoever’s wrong…
Neither one seems freaked by the slow-or-no-growth prospect, though Woodring seems both more optimistic and more pessimistic - like he’s setting himself up for disappointment. Evercore’s Daryanani seems pretty settled on a serious slowing of App Store growth until either something happens to goose sales in China or Apple glides into easier compares after the December-quarter. Similarly, though with a twist, Woodring’s latest note says:
With App Store [year-over-year] comps flat from July to August, but ~6 points tougher in September, we believe an acceleration in growth largely hinges on the strength of consumer spending (…) and demand for digital services in China as spending patterns normalize post lockdowns…
So, he doesn’t seem as settled on slow-to-no-growth as Daryanani. That said, Seeking Alpha does have Woodring noting that App Store growth “is skewed to the downside” this quarter. Still, he has higher hopes than one might expect. Quoting Seeking Alpha:
If the quarter ended with just 1% year-over-year growth in the App Store, that could impact Apple's all-important services revenue, which Morgan Stanley estimates will grow 10% year-over-year in the coming quarter.
This may be where he’s setting himself up for disappointment. On the June-quarter earnings call, it was Woodring himself who asked a question about Services growth in the current quarter - specifically, will the category maintain double-digit growth? CFO Maestri didn’t say “no.” What he did say was that growth for services last quarter was 12%. Apple’s going to see a 6% impact from foreign exchange year-on-year. Then there’s the whole Russia thing. Somehow Woodring hears that answer and still expects double-digit growth.
People are funny.
Woodring has a positive rating on Apple shares. Morgan Stanley’s price target on the shares is $180.
AppleCare+ Loss and Theft Coverage Hits France, Italy, and Spain
04 AUGUST 2022 - A piece from The Mac Observer says folks in France, Italy, and Spain now have access to AppleCare+ plus for iPhone. I added that second “plus.” It’s for the addition of theft or loss coverage, which had not been available for those countries. According to the site, the additional coverage:
…offers iPhone replacements for up to two incidents of theft or loss per 12-month period. Apple requires a €129 service fee per insurance claim. Apple will replace the iPhone after the customer pays the €129 service fee.
The lost or stolen replacement is in addition to the usual coverage. Otherwise, it wouldn’t be AppleCare+. More like… AppleCareDifferent. That includes “two incidents of accidental damage per 12-month period,” according to TMO, as well as “24/7 priority access to technical support,” according to Apple.
The piece says the three new countries join a handful that already had theft and loss protection. Those include Australia, Germany, Japan, the UK, and the US.
DigiDay: Apple Hiring Up for Advertising
04 AUGUST 2022 - Apple may be ramping up its advertising efforts again. Last week the company said it was adding two new ad slots to its App Store offerings. Now, a piece from 9 to 5 Mac says the company’s also adding a bunch of people. The site has a piece from Digiday saying:
…their sources say that hiring in the Ad Platforms division has risen significantly since the beginning of 2022. This is also reflected in the exec org chart. A report from May said that Apple Services group now has a dedicated exec, Todd Teresi, to focus on advertising-related initiatives.
They’re hiring people to build better automation, it seems. The job listings cited by Digiday says Apple is building “the most privacy-forward, sophisticated demand side platform possible.” According to 9 to 5 Mac:
A demand-side platform allows advertisers to set up automations that scale up campaigns based on performance indicator factors, aided by machine learning.
A well oiled machine like that keeps the advertiser dough rolling in, according to 9 to 5 Mac. Hence more people to build a better sales-bot.
Of course if it does well for the App Store, the piece figures it’s somewhere between possible and likely that Apple will take its advertising business to other services, including Spotlight, Maps, and - who knows - maybe TV. 9 to 5 Mac talks about ad-supported content as a possibility. Personally, I doubt that for Apple TV+. However, Apple has a streaming music video service about which we all forget. And there’s the company’s continued push into live sports.
Chatterjee’s Revenge
News of Apple’s ad push would likely excite a number of Apple analysts and potentially vindicate one. Back in June, JP Morgan analyst Samik Chatterjee suggested that advertising plays by Apple could generate as much as $6B by 2025. $1.7B of that could come from
…[building] an audience network of third-party applications which allow Apple to manage the logistics of ad targeting and delivering to these applications, matching demand from digital advertising customers with supply of an audience…
The other $4B-and-change would come from Apple’s search ads. Right now, he thinks that amount is limited by Apple’s emphasis on “consumer experience,” translated in past reports as its “focus on privacy and design.”
Apple’s Higher-End USB-C Mac Adapters Face Long Waits in the States
04 AUGUST 2022 - It so weird what retailers run out of in #TheseTimesInWhichWeLive. A piece from MacRumors says:
Apple's 96W and 140W USB-C power adapters for the 14-inch and 16-inch MacBook Pro continue to face significant shipping delays when purchased separately.
I guess if you want the convenience of an extra, you face the inconvenience of waiting. In the US, the piece says waits for the adapters currently sit at 6-8 weeks. That could mean as late as the first week of October if you act now and order today.
Amusingly, MacRumors says Apple said on the June-quarter earnings calls that:
…it continued to experience supply constraints during the June quarter, but the company does expect the shortages to improve during the September quarter.
I’m pretty sure that conversation was focused on phones and computers though, not chargers and such. If you absolutely need something in the way of a charger sooner rather than later, the piece says, “Apple’s 67W and lower USB-C power adapters are more readily available at this time.”
Bloomberg: iPadOS Release Pushed by One-Month
04 AUGUST 2022 - the story that was everywhere Wednesday is so hard to call a story. Bloomberg ran a piece saying that Apple plans to delay the launch of iPadOS 16! Apple has said iPadOS 16 will be released in the fall. Now though - sadly - it’s not going to be released… until the fall. According to Bloomberg, the company:
…expects to delay its next major iPad software update by about a month, taking the unusual step of not releasing it at the same time as the new iPhone software, according to people with knowledge of the matter.
The delay is said to be thanks to Apple’s “ambitious effort to overhaul the iPad’s multitasking capabilities.” There seems little point in trying to decided whether this story is correct or incorrect. I’d rather go ahead and point out the obvious: Apple has given no release date for any of its operating systems so… you know… can’t call ‘em late. Well, again, they did say “this fall.” So, they’ve got a three month window that doesn’t even open for another month-and-a-half.
Go back to sleep.
Report: Apple Drops Mask Requirements for Most Corporate Locations
03 AUGUST 2022 - It’s masks off at Apple corporate. You know. Unless you want to keep them on. The Verge has had a look at an internal Apple email from the company’s COVID-19 response team. “In light of current circumstances,” says the email, “wearing a face mask will no longer be required in most locations.” They hedge that a bit though, suggesting people keep checking internal communications for “specific requirements” for specific sites. Folks also need to be aware of recommendations and requirements from local health authorities. The email went on to say:
We recognize that everyone’s personal circumstances are different. Don’t hesitate to continue wearing a face mask if you feel more comfortable doing so. Also, please respect every individual’s decision to wear a mask or not.
The Verge points out that Apple’s masks-off move:
…comes amid a surge in the highly transmissible BA.5 variant of COVID-19. Earlier this week, the Bay Area transit system BART brought back its mask mandate.
Kind of makes one wonder about the “current circumstances” cited in the COVID team’s email.
Quick aside: I went to a market about a quarter-mile from my home the other day. Outside was a sign that said something to the effect of, “the wearing of masks not required but strongly recommended.” Inside, not one member of the store’s staff was wearing a mask. I guess they have “current circumstances” too.
Apple and Samsung Grow in Europe’s Shrinking Smartphone Market
03 AUGUST 2022 - A bad quarter for smartphones in Europe was not so bad for Apple and Samsung. That’s according to new numbers from Counterpoint Research. The two firms managed to grow both unit sales and market share year-on-year, though each slipped quarter-on-quarter. That was likely due in part to macroeconomic uncertainty, though Counterpoint seems to put most of the sequential slip on both companies stopping sales in Russia after Russia started attacking Ukraine.
According to Counterpoint’s count, first-place Samsung sold 13-million smartphones in Europe last quarter. That represented a 9% increase from the 12-million it sold the same quarter a year earlier. Sammy’s European marketshare moved from 27% to 32% over the same timeframe.
Second-place Apple’s growth was not as dramatic. Then again, it doesn’t have as wide a price range as Samsung. iPhone sales moved from 9.2-million units in the year-ago quarter to 9.6-million last quarter - up 3% year-on-year. iPhone’s European marketshare moved from 21% to 24% over the same timeframe.
The only other firm to see growth was fifth-place realme. Sales grew 21%, but they’re so small that any growth looks huge. That came compliments of the company selling 1.3-million units last quarter versus 1-million a year earlier.
Counterpoint Research Associate Director Jan Stryjak was quoted in the release, saying:
…it was a mixed bag of results in Q2 2022, and year-on-year comparisons mask complex market dynamics. Much has changed in Europe compared to last year and even last quarter, both from an industry and macro perspective.
As for what’s ahead, Stryjak said:
…the situation in Europe unfortunately remains bleak. Many countries in Europe are slipping closer to recession, and domestic political tensions in numerous countries beyond Russia and Ukraine are rising, for example in France, Germany and the UK. We remain hopeful, though, that the bottom has been reached and the trajectory should turn upwards soon, but the recovery will likely be long and slow.
MacRumors: Apple Watch Edition Supply Runs Low Ahead of Next Release
Apple Watch Edition Series 7 - Image via Apple
03 AUGUST 2022 - Ahead of the next round of Apple Watch units, one segment seems to be running low. MacRumors says “Apple Watch Edition models are beginning to sell out just weeks before the Apple Watch Series 8 lineup is expected to be announced.”
Seems to be hit or miss. Checking Apple’s site, the first one I tapped at random could be mine tomorrow if I wanted to spend a-thousand-bucks. Beginner’s luck, perhaps. MacRumors says a lot of the titanium-cased models are listed as “currently unavailable” in Canada, the UK, the US, and “select other countries.” The piece says the 41mm models are in shortest supply, though “a few 45mm models are out of stock too.”
Problems with Your Studio Display? Apple Says Turn It Off, Then Back On
03 AUGUST 2022 - If you’re having problems with your Studio Display, it’s apparently not just you. A report from MacRumors says:
Apple has admitted that customers using the Studio Display may experience audio-related issues, including sound unexpectedly and abruptly cutting out, audio playing at a high speed, distorted audio quality, and choppy playback.
Remember how neat it seemed when we found out the machine had an A-Series processor and ran a version of iOS? Yeah…
The piece says Apple Authorized Service Providers are being told to tell people hearing (or not hearing) issues that they:
…should unplug the Studio Display from power, unplug any accessories or devices connected to the display, wait ten seconds, then reconnect the Studio Display to power.
So basically, an elaborate “turn it off and turn it on again.” Seeing the silver lining, MacRumors says the steps make it sound like an issue tied to software, not hardware. The site seems hopeful that a future update will bring an actual fix.
Apple Maps Now Has Biking Directions for All 50 States
03 AUGUST 2022 - You can now bike the country with Apple Maps. iDownloadBlog says Cupertino’s answer to cartography has added cycling directions for Hawaii. If you’ve not used them, the piece says:
With cycling directions, users on a bicycle will be able to get turn-by-turn navigation from one point to the other. On top of that, the feature also covers bike lanes, bike paths, and, (…) when someone will need to use shared roads.
With the addition of Hawaii, iDownloadBlog says biking directions in Apple Maps now cover all 50 states in the union. Cycling directions are also available internationally, according to the piece, “including in China, Vancouver, Montréal, Toronto, Barcelona, and London.”
“Leaving Soon” Section Leaves Apple Arcade (Along with “Leaving Soon” Games)
03 AUGUST 2022 - From “going” to “gone.” A piece from 9 to 5 Mac says the games marked “Leaving Soon” for Apple Arcade have left. Last month Apple Arcade added a section to its landing page listing 15 games that would be off the service soon. A few days later the company said that the titles would be playable for two-weeks past their disappearance, provided they’d been downloaded already. We are now inside those two weeks.
Interestingly, it wasn’t just the games that went away. 9 to 5 Mac says the “Leaving Soon” section has also left. Seems safe to assume then that no other titles are in imminent danger of removal.
Several Macs and an iPad Pro Go “Vintage”
03 AUGUST 2022 - Back in mid-July we heard word of a number of Mac models hitting Apple’s “vintage” hardware list at the end of the month. The month ended and that list has grown. MacRumors runs down the list, which includes “the first MacBook Pro models with the Touch Bar.” Four MacBook Pros on the list in total - made 2015 and 2016. There’s also a 2015 MacBook Air, two-2015 iMacs, one 2016 MacBook, and a 9.7-inch iPad Pro released in 2016.
If you own any of those, take note. Vintage products are still eligible for repair through Apple or Apple Authorized Service Providers, but only if they have the parts available.
Lightyear and Luck: Pixar Versus Pixar in the Streaming Space
03 AUGUST 2022 - For modern animation fans, the rest of this week could be spent somewhere between the house John Lassiter built and the house he’s helping to build. A piece from CNET says Disney/Pixar’s Lightyear, the movie about the guy who was the basis of the Buzz Lightyear toy in the “Toy Story” series of films, hits Disney+ today. That one’s kind of got an uphill slog for a few reasons - first, it had a run in theaters six-weeks ago. The biggest buzz it might have generated (pardon the use of “buzz” there…) The biggest buzz it might have generated would probably have been then. It also hasn’t resonated with audiences the way other Pixar films have. While reviews and audience reactions haven’t been bad (75 with critics and 84 with audiences on Rotten Tomatoes), they’ve lacked a certain “oomph.” The critics blurb on Rotten Tomatoes says:
Lightyear settles for being a rather conventional origin story instead of reaching for the stars, but this gorgeously animated adventure ably accomplishes its mission of straightforward fun.
So, not bad, but not great. Similarly, the audience blurb says:
Even if it doesn't quite measure up to Toy Story, Lightyear offers an entertaining -- although somewhat complicated -- origin story for the beloved title character.
All of that said, the barrier to entry is practically gone now. If you’re a Disney+ subscriber (as tens of millions are at this point), Lightyear is ready for blastoff.
Apple Tries Its Luck
A more interesting film to watch, in some ways, will be Luck. The New York Times has run an article on the film, which is really an article on former Pixar exec and current head of Skydance Animation John Lasseter. The New York Times calls Luck, “The most Pixar movie of the summer…” this despite Lasseter being bounced from Pixar five-years ago, after some of his workplace behavior made some staffers feel “disrespected or uncomfortable.” While it would not be completely accurate to say that Lasseter was “cleared” of anything inappropriate, the report says “Skydance hired lawyers to scrutinize the allegations against Mr. Lasseter and privately concluded there was nothing egregious.”
From Apple’s side, all of this matters because the Cupertino-company has inked a deal with Skydance Animation for at least two-features and one animated series over the next couple of years - the first of which hits this week.
Needless to say, Lasseter is complimentary of the folks at Apple. The New York Times piece had him saying in a phone interview that - given Steve Jobs history with Pixar, working with Apple felt like part of him had come home. “I really like what Apple TV+ is doing,” said Lasseter:
It’s about quality, not quantity. And their marketing is just spectacular. It’s the best I’ve ever seen in all the movies I’ve made.
Of course, they’re also writing his checks currently, so… yeah.
As films like Luck go, Lasseter has been tops. The Times calling it the “most Pixar movie of the summer” is no small thing, especially considering Pixar actually made a movie this summer. I can’t help wondering though: Does being the most Pixar movie matter when you’re not Pixar? Pixar has always had Disney - first as a partner in the 1990s, then as owner once Steve Jobs sold the company to Disney in 2006. I keep thinking about Ron Johnson. The former head of Apple Retail has tried a few things since leaving the Cupertino-company, none of which have met with success. Personally, I think he’s brilliant, but things haven’t clicked for him professionally post-Apple. Apple Retail likely would not have become what it became without him, and vice versa.
John Lasseter may have made the most Pixar movie of the summer. Can such a movie make a Pixar-sized dent without Pixar? It’ll try - starting this weekend. Luck hits Apple TV+ this Friday 5 August.
Evercore: For First Time Since 2008, App Store Shows No Growth
02 AUGUST 2022 - On last week’s June-quarter earnings call, Apple CFO Luca Maestri said that revenue for Apple’s Services segment would grow in the September-quarter, though he warned that that growth will slow compared to the June-quarter. And the world is seeing signs of it.
Apple 3.0 ran part of a note Monday from Evercore analyst Amit Daryanani. By his firm’s reckoning, “The App Store did not grow in July, the first month without growth since the Store’s inception.” Time to freak out? Daryanani does not think so. Quoting his note:
The slowdown should be well understood by investors as the App Store grew only 5% in the Jun-qtr and Apple guidance indicated Services growth should decelerate further in the Sept-qtr. The App Store remains the largest component of services revenue, but it has become less important to the overall services growth rate and Apple was able to post 12% Services growth in June-qtr despite App Store growth of just 5%. New opportunities (payments, advertising) are becoming more significant drivers of growth. (emphasis his)
So, kind of like when iPod sales fell off a cliff. Something else was there to more than pick up the slack.
Two things could/should re-start growth for the App Store: “material improvement out of China,” and/or getting through the tough compares that’ll run through the December-quarter. Additionally, Apple’s warning of slowing Services growth should save the company from a hard freakout.
Daryanani has an “Outperform” rating on Apple shares. His price target on the shares is $180.