Apple hosted its “Peek Performance” event featuring two upgraded products (iPhone SE with 5G and a new iPad Air) and two new products (Mac Studio and Studio Display). I estimate that the new products will account for 5-10% of Apple’s revenue over the next year.
More importantly, the event is another reminder that Apple is the gold standard at getting it done. Since 2018, they’ve hosted 4 product events per year. Apple has been at its most prolific despite multiple headwinds that have sidetracked the product development efforts of most companies. As long as Apple can keep upgrading the current products, launch new products and services, and enter new product categories, shares of AAPL will continue to rise.
All indications suggest that they’ll continue to do just that.
Big picture takeaways:
- My only criticism is that Apple events have become so polished that they’ve lost the feel of a cult gathering. Virtual events are hard and Apple has set the gold standard; however, a more communal feel would bring back an important cultural element to the brand.
- The performance of Apple Silicon is so good it’s laughable. The M1 value proposition may seem to be directed toward pros but it’s actually directed to all users because faster is better for everyone. The M1 chip is the biggest jump in performance I’ve ever noticed in a computer and Apple is extending its lead with M1 Pro, M1 Max, and now the M1 Ultra.
- Once again, the combination of hardware + software has allowed Apple to do things their competitors can’t match (e.g., M1 Ultra chip performance and the Studio Display camera features). It makes me wonder why more people aren’t using these devices. The upfront price of Apple products is higher than some of their competitors; that said, I believe the total cost of ownership of an Apple product is lower than any competitor.
Product takeaways:
- Upgraded iPhone SE with 5G. What stuck out to me is the 8% price increase, now starting at $429. Despite the price increase, Apple will sell as many of these as they can make for the next couple of quarters. I estimate that iPhone SE accounts for around 15% of total iPhone revenue, or about 8% of total revenue.
- Upgraded iPad Air with 5G. What stuck out was they kept the starting price unchanged at $599. They could have raised the price and that would not have impacted demand given iPad’s are in-demand. For example, the regular iPad is still showing lead times of 30 days or more, which is a slight improvement from around 45 days I have observed over the past three months.
- New products: Mac Studio and Studio Display. This combo is targeted at creative pros and is essentially an upsell for pros who were using the 27inch iMac that started at $1,799 (recently discontinued). Pairing up the Mac Studio with the M1 Ultra chip and the Studio Display starts at $5,500. That’s half the cost of the previous high-powered duo, the Mac Pro plus Pro Display which started at $11,000 combined.
- Apple TV+ adds Live Sports. MLB’s Friday Night Baseball is a great starting point for live sports on Apple TV+. I expect more deals to follow. My money is now on something around the NFL and, eventually, Formula One.