Above Avalon

Some of Apple’s recent decisions regarding content distribution have sparked a debate. Is Apple embracing a new kind of strategy that elevates services at the expense of hardware? Episode 140 is dedicated to going over Apple’s content distribution strategy and how the company is looking to leverage its user base in an effort to establish one of the more formidable content distribution arms in exis...

January is a great time to embrace the unknown rather than come up with predictions for the next 12 months. Episode 139 is dedicated to going over my fifth installment of Apple questions as the new year kicks off. We discuss 56 questions facing Apple in 2019. Topics include everything from big picture themes to detailed questions about Apple’s product strategy. Additional topics include Apple’s fi...

There will come a time when the iPhone business is in big trouble. However, that day has not arrived quite yet. Episode 138 is focused on how the sheer level of pessimism facing iPhone hit an inflection point in 2018. Things have simply become too negative. The discussion begins with the iPhone’s impact on Apple financials. We then dissect iPhone hysteria to see how pessimism has changed and cente...

Given the magnitude of its buyback program, excess cash position, and free cash flow generation, no other public company is in as good of a position as Apple to benefit from stock market turmoil. Episode 137 is focused on how Apple can leverage its buyback program to take advantage of stock market dislocations. The discussion begins with my thoughts on the recent weakness in AAPL shares. We then l...

The most surprising part of Apple’s 4Q18 results wasn’t found with the numbers or even guidance. Instead, by announcing unit sales data would no longer be provided starting in 1Q19, management dropped a bomb on Wall Street. Episode 136 is focused on discussing Apple’s decision to move beyond unit sales. We go over how unit sales became a crutch for financial analysts. The discussion then turns to...

In episode 135, we look at how the gray market for refurbished and previously-owned iPhones is impacting Apple’s iPhone pricing strategy. The discussion begins with a closer look at iPhone ASP (average selling price) trends and my thoughts on how the gray market is impacting iPhone ASP. We then go over the three key ingredients needed to sustain a functioning gray market for iPhone. Additional top...

The Netflix machine seems unstoppable. Strong paid subscriber growth and rising content budgets have given Netflix a commanding lead in the paid video streaming market. However, change is in the air. Episode 134 is dedicated to discussing Netflix’s business model and why calls suggesting Netflix has won the paid video streaming war are grossly premature. Additional topics include Netflix’s keys to...

Last week, Apple Watch was the star of Apple’s second major product event at Steve Jobs Theater. Episode 133 is focused on looking at the big picture following Apple’s event. The discussion begins by going over Tim Cook’s comments regarding Apple’s mission statement and then quickly puts the iPhone and Apple Watch updates into context. We then turn to my Grand Unified Theory of Apple Products. Add...

In episode 132, we take a closer look at Apple's Project Titan. The discussion begins by going over the signs pointing to Apple expanding Titan initiatives in recent months. We then turn to Apple's goal with Titan and the automobile's changing value proposition. Tesla enters the discussion as we look at why the company isn't a realistic acquisition target for Apple. Additional topics include Tesla...

Apple's latest growth story is driven by three drivers: iPhone, Services, and Wearables. In episode 131, we discuss these three growth drivers to see how they are not created equal. After going over the factors fueling Apple's growth drivers, we spend time discussing how Apple's growth story may change in the near term. The episode concludes with a big picture overview of why Apple's long-term gro...

Episode 130 is dedicated to discussing how Apple has become comfortable in accepting, and even embracing, the awkwardness that exists between the iPad and Mac. The discussion begins with a closer look at the fascinating juxtaposition between Apple's recent Mac campaign and its iPad ads from earlier this year. We go over what the ads tell us about Apple's thought process regarding the iPad and Mac....

A select group of corporate giants have been gaining influence and investor dollars on Wall Street. Episode 129 is dedicated to discussing today's corporate giants (Apple, Amazon, Alphabet, Microsoft, and Facebook) including the key differences and similarities between the five. The second half of the episode goes over why I think odds are good that today's giants won't be tomorrow's giants. The e...

One of the major takeaways from this year's WWDC keynote was found with something not announced on stage. Apple finds itself announcing new technologies that make more sense on form factors that don't yet exist. Episode 128 includes a discussion of this year's WWDC, which demonstrated how Apple is figuring out what comes next. After quickly recapping the major WWDC 2018 announcements, Neil discuss...

Last week, Neil celebrated the third anniversary of launching Above Avalon subscriptions. Episode 127 provides a behind-the-scenes look at Above Avalon and includes a discussion of Neil's business model and the broader paid subscription industry. Neil then goes over some of the highlights and challenges from the first three years of Above Avalon subscriptions. The episode concludes with a closer l...

Apple's services business is remarkably strong yet surprisingly mysterious. A closer look at Apple Services reveals an apparatus, which can easily qualify as a Fortune 100 company, that isn't what it seems from the outside. In episode 126, Neil puts together a few pieces of the Apple Services puzzle. After going over the five categories that comprise Apple Services, Neil goes over his financial es...

In this special edition episode of the Above Avalon podcast, Neil goes over Apple's 2Q18 earnings. The discussion is dedicated to analyzing iPhone results. Along with going over his iPhone X sales estimates, Neil discusses the latest iPhone ASP and iPhone channel inventory adjustment trends. The episode concludes with Neil's theory as to why iPhone supply chain rumors have been off when it comes t...

In Episode 124, Neil discusses how Apple's capital allocation goals will require the company to double the pace of share buyback from current levels. The episode begins by going over the various updates Apple has pushed through to its share buyback and cash dividends. Attention then turns to Apple's excess cash position, which plays a key role in any discussion involving capital return. The episod...

Episode 123 takes a closer look at Apple's capital allocation story on Wall Street. After discussing why narratives are so important on Wall Street, Neil goes over the core tenets of a capital allocation story and how the narrative does a good job of describing Apple's design-led culture. Neil then goes over a number of implications found with Apple possessing a capital allocation narrative on Wal...

After a brief lull, Apple's R&D expenditures are once again exploding higher. In Episode 122, Neil analyzes the latest Apple R&D trends. After discussing three drivers for R&D growth, Neil goes over the two new products likely responsible for the recent surge in R&D expenditures. The episode concludes with Neil's grand theory on Apple R&D. Receive Neil's analysis and perspective on Apple throughou...

In Episode 121, Neil discusses Apple's strategy for controlling sound in our lives. The discussion begins by going over Apple's motivation for controlling sound and the central role music plays in it. The episode then turns to the two parts of Apple's strategy: sound on the go and sound in the home. Neil goes over how iPod, iPhone, AirPods, and now HomePod, play a role in Apple's strategy for cont...

Episode 120 is focused on how Apple's dramatic change in strategy regarding larger iPhones was driven by the realization that iPad mini was the wrong bet. After discussing the early iPad years, Neil goes over the background behind how the iPad mini came to be. Neil then discusses how Apple found itself flat-footed with larger smartphone screens and how a different perspective toward smartphones an...

The unit sales growth era that had defined iPhone for years is over. Episode 119 is dedicated to discussing the iPhone's new era that can best be characterized as status quo. After discussing iPhone sales trends, Neil goes over six headwinds that have come together to create a much less friendly iPhone sales growth environment. The discussion turns to how the dynamic between the two main iPhone sa...

Something is changing when it comes to the way people are thinking about Apple Watch. We are witnessing nothing short of a revolution with Apple Watch. In Episode 118, Neil discusses how Apple Watch has become a bridge between the present and future. The device holds the potential to become more disruptive to the current computing paradigm than even Apple may want to acknowledge. Receive my analys...

January is a great time to embrace the unknown found with a new year. Episode 117 is focused on going over my list of questions for Apple in 2018. We cover more than 60 questions on subjects that range from Apple's major product categories to various managerial and organizational topics. Receive my analysis and perspective on Apple throughout the week via exclusive daily emails. To sign up, visit...

Episode 116 is dedicated to reviewing Apple's performance in 2017. After briefly discussing my methodology for grading Apple, we discuss the various milestones and issues that impacted the company in 2017. My grading process is broken into seven categories (iPad, Apple Watch, iPhone, Mac, Accessories, Services, Financial Strategy). The episode concludes with my overall grade for Apple in 2017 and...