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Apple
Gene Munster, Brian Baker
Apple’s AI Integration Will Boost Device Sales and Margins
Apple made good on expectations, announcing generative AI integration across its software and applications. Accessing these features will require 85% of Apple users to upgrade some or all of their devices over the next few years. This means revenue growth in FY25 and FY26 will likely be +10%, ahead of the current 6% and 4% expectations, which should be a positive for AAPL.
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Apple
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Artificial Intelligence
Gene Munster, Brian Baker
A Clearer Picture of Apple’s China Business Emerges
The most recent data coming out of China gives us a better picture of what is going on in Apple's China business. iPhone sales in Mainland China were likely down 5% y/y in Mar-24, better than Apple's reported 8% decline in Greater China. When Cook said iPhone grew in China in Mar-24, he was likely talking about units, not revenue. In other words, this means China's non-iPhone segment was down 12%, notably lower than the global average of Apple's non-iPhone revenue which was up 4% y/y.
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Apple
Gene Munster, Brian Baker
iPad “Let Loose” Event Reveals Pace of Silicon Development Has Quickened
Three of the four iPads got long awaited updates including thinner design, bigger screens, faster chips, and more memory. These changes will jump start the segment's growth in June and September after being down for 9 of the past 10 quarters. Looking into 2025, I expect the iPad to be on a steady decline of around 2% as the segment is impacted by the reality of infrequent upgrades. The big surprise announcement was the pace that Apple is introducing new chips, a sign that the company will use hardware as a competitive advantage once they get more into the AI race.
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Apple
Gene Munster, Brian Baker
Apple’s Set to Re-accelerate: All Eyes on AI
Shares of $AAPL traded up 6% following March results as investors were relieved that the company maintained Street revenue guidance along with an increased share buyback. The next seven months will likely show Apple's business accelerating every quarter from down 4% y/y in Mar-24 to up 6% in Dec-24. More importantly, the company reiterated their optimism that they will bring generative AI to most of their products, likely starting in the Fall. Bottom line: Apple's business is intact, revenue growth is improving, and the company is pursuing generative AI to further boost sales.
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Apple
Gene Munster, Brian Baker
Apple Readies for Its Jump Into Generative AI
Joz, Apple's Head of Marketing, posted on X saying this year’s WWDC will be “Absolutely Incredible!” as in "AI". This will mark the first glimpse into the company's generative AI strategy and be a monumental day given it will usher in the biggest change in Apple's operating system design since the mid-80's point-and-tap/click interface. This will be a new communication interface driven by generative AI.
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Apple
Gene Munster, Brian Baker
DOJ Takes Aim at Apple, Largely Focused on Services
In 2020 Apple was more or less victorious over Epic games in defending the App Store. Now the DOJ is taking aim at Apple, largely focused on the iPhone’s role at promoting the sale of software and services and locking users into upgrading. The substance of the debate on shares of AAPL will focus on two topics: 1) What will the impact be to Apple’s Services segment? 2) How long will this take to sort out? While I believe this will take three years to sort out, I expect little will actually change, just like we saw 25 years ago with the DOJ going after Microsoft.
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Apple
Gene Munster, Brian Baker
As Apple’s Focus on AI Intensifies, Margins Could Be Pressured
The news of Apple launching its own model and talking with Google and OpenAI to license a foundation model speaks to the degree that the company's growth North Star has changed over the past month. First, it was Project Titan getting canceled, now it’s considering doing something rare at Apple, license another company's tech stack. I believe Apple now gets it. AGI has the potential to have a profound impact on their business, and they need to add AI to the company's core competency of hardware, software, and services. To get there, I expect more investment, and a slight decline in margins in the near-term, and expanding margins long-term.
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Apple
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Google
Gene Munster
Deepwater Frontier Tech Survey 2024
Deepwater’s first annual Frontier Tech Survey measures the American public’s viewpoint on emerging technologies, including AI, Electrification & Automation, the Creator Economy, and Health-Tech. Key Takeaways: AI – General usage and awareness remains low; opinions are mixed when it comes…
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Apple
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Artificial Intelligence
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Augmented Reality
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Autonomous Vehicles
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Frontier Tech
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Google
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Health
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Meta
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Microsoft
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Netflix
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Neurable
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Neurotech
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Nvidia
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Redwood Materials
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Spatial Computing
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Tech Addiction
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Tesla
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TikTok
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Virtual Reality
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Wearables
Andrew Murphy
48 Hours With Vision Pro: Our Thesis on Spatial Computing
Go deeper: For even more on Vision Pro, here’s my discussion with Gene on YouTube. Disclaimer
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Apple
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Spatial Computing
Gene Munster, Brian Baker
China Clouds Shroud Apple’s Progress
Apple's December quarter and guidance highlighted the impact China's macro slowdown had on Apple's business. That reality diluted investor optimism around the long-term progress the company is making when it comes to growing its active base, launching Vision Pro, and entering generative AI likely this spring.
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Apple
Gene Munster, Brian Baker
Developers Will Ensure Vision Pro Goes Beyond Gaming
It's official, the world of spatial computing has begun with the launch of Vision Pro. The reviews have been consistent: groundbreaking tech with limited use cases. On launch day, the platform has over 600 apps available, already more than the 574 apps built over the past three years for Meta Quest. Importantly, Vision Pro's developer momentum is pointed in the right direction with about 60% of those apps outside of gaming, compared to about 30% on the Quest platform. Apple's goal is to motivate developers to ensure Vision Pro goes beyond gaming to make the device mainstream.
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Apple
,
Meta
Deepwater’s 2024 Predictions
Over the last seven years, we’ve made a habit of offering a few predictions for the year ahead. Here’s what we’re anticipating for 2024: IWO will outperform the S&P500. The iShares Russell 2000 Growth ETF (IWO) will outperform the SPDR…
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Apple
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Google
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Meta
,
Tesla
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