What the M1 Apple Silicon Platform (Generally) Is (and Isn’t), From a Home Gamer’s Perspective

In semi-particular order…

A Redefinition of Low-Power PC-Paradigm Computing

The reviews from tech journalists, the social media tech set, and users are in – and reaction is about as positive as I can remember for any previous Mac launch.

Heck, The Verge (a generally “tough-but-fair” reviewer when it comes to Apple) gave the carryover-design, non-touchscreen, two-TB3/USB4-port-only MacBook Air a 9.5/10, where recent, more “technologically-advanced” iPhones (5G, LiDAR on Pro, U1, non-potato-cam, etc.) get a 9/10.

So it’s not just because of the much-better-received second-generation scissor-switch design (alas, poor butterfly keyboard, we hardly knew thee). It’s “so much more” – mostly due to a single, incredibly savvy change-of-chip from space-heater Intel to an unnervingly-cool, winter-unfriendly, 5nm-process, energy-efficient 16B-transistor M1 SoC. That Rosetta 2s its way through Intel Mac apps with generally impressive ease.

That also somehow boasts single-core performance better than any Intel Mac ever shipped, and exhibits (albeit in brief sprints for the fan-free Air) multi-core CPU potential that’s a little bit better than…the state-of-the-art (albeit 14nm) Core i9 CTO option on the $2800+ (US) MBP16. Among other surprising feats of speed.

Suddenly, the humblest of Macs…fine, in overall PC context, semi-premium $1000+ fairly-mobile and moderate-priced $700+ small-form-factor PC computing…just got a lot faster. And just as suddenly, the competition is left with some serious catching up to do – yes, even on price. Because Apple has made a powerful statement on value.

Compare a base model Mac mini to the Lenovo SFF PC I tweeted about two weeks ago, and you can kind of see how Apple’s timing and choice of target market (the broadest demographic of the Mac installed base, by far) couldn’t have been better:

A New Definition of the Limits of Low-Power PC Computing

Sure, in most use cases (and post-ARM64-software optimization, pretty much all use cases), the M1 Macs change what’s possible all the way from energy consumption to prosumer-and-up workflows that would cause a Core i5 MacBook (or worse, a Core i3) to recoil in terror.

And then there’s the small side benefit of Apple offering very performant, superior-battery-life machines for a somewhat important subset of the Mac installed base – y’know, millions of third-party iOS, iPadOS, watchOS and/or macOS developers running Xcode, without which there is no “developer ecosystem”.

But there are limits to being a pioneer in Strange New Smartphone-Inspired PC Architecture™, as it were. Intentional, but still limiting all the same.

Yes, the M1 is kinda, sorta an “A14X Plus”. That’s because Apple challenged itself to create the most performant SoC it possibly could within an enclosure (capped at ~10W sustained thermal envelope) purposely designed to eliminate active cooling (though M1 certainly benefits from a little “fresh air”).

Apple’s enhanced thermal constraint, along with the unified memory architecture, necessitated extreme restrictions on how much logic board space, GPU power, and sheer thermal/power overhead could be applied to the M1’s design.

As it turned out, we should have seen this coming around two years ago.

The intrepid team at iFixit was one of the first to make the discovery with the 7nm-process A12X:

Credit: iFixit (link above)

Computer, rotate and zoom in on the A12X itself!

Credit: Yep, still iFixit!

SoC on the left, two DRAM modules parked right next to it. The exact same basic layout as the just-launched M1.

M1 schematic. Credit: Apple November 2020 Special Event, ~7:40 mark

Given that DRAM isn’t process-shrinking anywhere near the rate of Application Processors like A14 Bionic, M1 and inevitable AMD/Qualcomm competition, it’s at least understandable – if frustrating – that this super-compact design would have a relatively modest RAM cap for the time being. There’s room to expand the boundaries of the M1 “Silicon City”, but that’s for future, higher-power-budget variants.

Long story short, the M1 can take you very far (comfortably meeting Johny Srouji’s “best-in-class” mandate for each M1 Mac vs. its relevant competitive set, I’d say), but it’s literally the absolute least that an M-chip can do, by design. So if you want features like:

• a 32/64GB-and-up RAM ceiling,

• 6+ performance CPU cores,

• a stronger GPU,

• more than 2TB SSD,

• 4+ Thunderbolt 3 / USB4 ports,

• a bigger display,

• being able to simultaneously run more displays,

or something else the M1 platform just can’t provide, then you might want to wait for the corresponding M-chip MBP16, iMac, or maybe i/Mac Pro 🥴 versions to launch, if at all possible. And maybe “Pro” versions of the Mac mini and 13″ MacBook already-called-a-Pro, who knows.

An Engine Swap That Was “Obvious in Hindsight”

First of all, everyone knows we’re still in the middle of a terrible COVID-19 pandemic, right? November 2020 being the worst month yet on a worldwide, newly-reported-cases-per-day basis?

And Apple still launched an impressive array of products, from Watch Series 6 and SE to iPad Air A14 and some mildly important iPhone 12 SKUs (which were delayed from “a few” to “several” weeks).

So yeah, perhaps some of Peanut Gallery Tech Twitter/Journopunditocracy can appreciate the overall context of 2020 here before complaining about the lack of shiny new things.

That aside, why did anyone expect Apple to start the Apple Silicon transition with radical redesigns anyway? It’s never been done in any past transition (Moto 68040 >> PowerPC, PowerPC >> Intel), in part because reengineering the hardware for a totally new chip architecture is probably tough enough as it is.

Aside from the other very good reasons others have given (for instance, Rene Ritchie points out that it’s much easier to work with existing design and thermal tolerances)…

and the fact that MacBook Pro (Late 2016) and MacBook Air (October 2018) designs aren’t that old (the keyboards are pretty new, in fact 🤣)…

…it’s really not a particularly good idea to “obsolete” the rest of the Mac lineup right out of the gate with major redesigns, especially when the remainder of the Apple Silicon Transition could take until sometime in 2022.

Apple’s Own Spin on “Modular”

I know, I know. Apple’s under constant existential threat from Android or WinTel or WinAMD or maybe even some more “open” flavor of RISC computing. Whether or not that’s looking particularly true anytime in the foreseeable or longer-term future, a theme you generally see with this line of argument is the spectre of “modularity” (y’know, Snapdragon 765 or 8cx this, Ryzen 5000-series that, etc.), a crashing wave of commoditization overwhelming whatever “high-margin moat” Apple has allegedly, tenuously trenched via integrated products.

Oddly, though, Apple’s making its next, bet-the-Mac big push on personal computing with

  • an M1 in a Mac mini
  • an M1 in a MacBook Air
  • an M1 in a MacBook Pro

Isn’t that…modular too?!

Why yes, yes it is! And if you think about it, it’s much more aggressively modular than anything we’ve ever seen in personal computing (a single SoC for three distinct form factors, including a desktop). And it’ll probably happen again with another subset of the Mac lineup.

It’s radically different from anything we’ve ever seen in any Mac, and yet this “one-size-fits-all” approach is really quite sensible (and exhibited in iPhones since the 6/6 Plus).

Also interesting is the complete lack of compromise (where RAM isn’t a major consideration, which it’s not supposed to be on “low-end” systems given classic usage patterns).

Sure, M1’s thermal bandwidth allows it to work just a little bit better on the top-end, and for longer when it has access to active cooling and/or unlimited power, but for the first 10-15 minutes of a person’s computing day, the overall speed experience will be probably be almost exactly the same.

It saves on costs to target a single SoC for three different Mac form factors, of course, but when the entry-level Mac SoC is this fast, consumers really won’t care much. It’ll just take a little getting used to from the customization fans among us, because for Apple, the concept of choosing a faster CPU for a given Mac trim level may now be a thing of the past.

Legitimate gripes about LPDDR4X RAM expandability and (impressively fast) SSD storage upgrade prices aside, this move to M-chip modularity is very likely to save Mac users money over time ($200 or more for the MacBook enthusiasts), because Apple’s goal is to never make you want for CPU performance on a brand-new system ever again.

The Beginning of the Inevitably Uncomfortable Intel/Apple Silicon Feature Divide

It’s bound to happen, and unfortunately, Mac users having bought a system within the past two to three years or so might be feeling a bit “left out” as they approach Year 5-7 of their particular Mac’s lifecycle, if not sooner.

To be clear, Apple will not, cannot possibly break its commitment to support Intel Macs “for years to come”. Big Sur support looks back up to 7 years (2013 MacBook Air, MacBook Pro, and Mac Pro), and I don’t see that support lifecycle changing very much when whatever macOS version in 2024 or 2025 launches. As many non-thrill seekers know, Apple also tends to fully support security updates looking back up to two macOS releases, so macOS software security support could easily extend up to and slightly beyond 2026 for any new Mac with a “model year” of 2019 or later.

But there’s security support, and then there’s feature support. And there’s already one giant difference between an M1 and most (all?) Intel chips: neural processing power. The A14 Bionic and M1 Neural Engines are both capable of 11 trillion operations per second. In the case of M1 MacBook Pro, it’s claimed to be 11x faster at ML vs. the 2020 MBP13 running an 8th-gen 1.7GHz Core i7 CPU.

Of course, neural-network-type tasks will be faster with 11th, 12th, 13th? gen Intel Core chips…assuming any of them are available in quantity and in time for the final Intel Macs yet to launch. But Intel’s and Apple’s approaches in the short term are just too different. Intel seems to be leveraging its existing CPU/GPU-centric platform to enhance neural-computing performance; Apple’s gone full-bonkers Moar Cores™ with a discrete NPU, the same strategy as major RISC chip players.

For now, the Neural Engine’s main benefits seem more related to specialized image/video processing tasks (Face ID which is “old hat” to Apple by now, Pixelmator’s ML Super Resolution), or machine learning academia. Other features it enables, from Siri Suggestions to object detection, are well within the capabilities of “lower-end” neural processing power (read: 11T ops/sec are slight overkill for these tasks)

But that’s definitely changing over time, given the quadrillions of operations being left on the table every single day (and a certain ex-Google AI Chief champing at the bit to move the AI/ML industry forward). With an on-device engine that fast, why not “teach it” to accelerate all kinds of anticipatory tasks in typical users’ lives, including finally making Siri…um…better, or even available on-device, no cloud required just for timers and alarms?

It’s also possible that allowing Mac developers and Mac-based researchers access to the Neural Engine will unlock use cases Apple hasn’t thought of…or can Sherlock/acquihire in the future. 😁

Those benefits…will not really accrue to Intel users’ benefit over time, since their AI/ML performance is vastly inferior to the M1’s NPU. And aside from inevitable Neural Engine improvements each M-chip generation, the feature upgrade gap could only get worse if the Apple Silicon platform continues to add new hardware functionality including:

• hardware 8K encode/decode

• Mac *touchscreen* support

• further image/digital signal processing improvements/other ways to make videoconferencing as battery-efficient as possible

• possibly moving up to a full-system 256-bit encryption base via a more powerful Secure Enclave

• supporting higher AirPlay screen mirroring resolutions than 1080p, and in HDR

• any number of things people much smarter/more well-versed in macOS than me could think of

Apple’s hellbent on making Macs as compelling as possible, now that it’s finally able to assert full control over the entire Mac widget for the first time ever. It’ll be interesting to see how macOS updates 3-5 years from now offer differing amounts of functionality uplift depending on chip platform.

Foreshadowing Apple Silicon’s Next SoC Family Member?

M1 absolutely does, I think. Next up: A bonus post with some quick, actually-somewhat-educated guesswork on the next M-chip to power the next Apple Silicon Macs.

What I’m Watching for as Apple’s First Silicon Macs Launch

From a home-gamer, albeit longtime-Mac-user, perspective.

I’m going to presume up-front (right or wrong) that Apple will have an “OK-to-good” hardware transition as a baseline. After all, Apple pulled off a generally-quite-successful transition to PowerPC, and Steve Jobs wasn’t even there at the time.

This isn’t like AirPower – this is much more like iPhone, in that Apple can’t afford to fail. At its most basic level, Mac is THE Apple Development Platform, and the 5nm technology platform that A14 Bionic is based on is a terrific place to start.

So, how to reasonably assess Apple Silicon Macs right out of the gate?

Performance, Power Efficiency

Just how “best-in-class” will each Apple Silicon Mac be?

We probably shouldn’t expect a MacBook Air to perform like an iMac Pro. Then again, we have every right to expect the closest thing to a MacBook Air running Apple Silicon SoCs to significantly outperform the current MacBook Air. Should we expect a 20-30% uplift in performance on the CPU side? Or even more? Will Apple deploy iPad-style performance cores, or can it also go bigger.LITTLE? Something more dramatic on the GPU side, since Apple GPUs (A11 and up) have been specifically billed as discrete-class GPUs?

Wait – shouldn’t we be expecting “revolutionary” Macs now that Apple has finally gone truly vertically-integrated? Sure…just not yet (see: Intel transition).

There’s a SKU or two more than ready for a full redesign – iMac in particular, with a design that dates back to 2012. So while the MacBooks we’ll probably (?) see tomorrow might look familiar, you’ll likely see a much fresher design from one or more Macs before the end of 2022.

Will we see dramatically improved battery life?

For now, that may boil down to two “simple”, though currently completely-unknown, quantities: (1) SoC power consumption, and (2) battery capacity in the case of laptops.

SoC power consumption is the single “easiest” metric for Apple to relentlessly optimize versus a “comparable” Intel chip. Speaking of, here’s some numbers to potentially refer to down the road (and I won’t keep you in suspense – these are TDP, or Thermal Design Power wattage figures from Intel chips you generally see in Macs today)

>> Ultramobile – MacBook (4.5W typical, up to 7W)

>> Mobile – Macbook Air (9-10W)

>> Mainstream Performance – MacBook Pro 13 (28W)

>> Mobile Pro – MacBook Pro 16 (35-45W)

>> Desktop – Mac mini (65W), iMac (65W for iMac 4K, 95W for iMac 5K)

>> “Big Iron” – iMac Pro (140W and up), Mac Pro Gen 3 (200W and up)

NOTE: These TDP figures appear to roughly correspond to “manufacturer’s suggested maximum power consumption”, or a measure of power used somewhere around maximum CPU load, all cores on.

Apple will obviously aim to improve on overall power consumption in all scenarios from idle-state to max-load and overall Mac laptop runtime must increase (or they’ll face the righteous wrath of consumers). However, Apple also has the option to convert a portion of SoC power savings into somewhat less battery capacity (saves on weight, charge time, and theoretically environmental impact).

How can we objectively compare the CPU/GPU performance of a CISC-based (Intel) Mac and a RISC-based (Apple Silicon) Mac, especially if common cross-platform apps may not be optimized for Apple Silicon right away?

That one might require a little time, then the glorious Photoshop Bakeoffs of old can begin anew!

But there are other good methods to get a general idea of Apple Silicon’s potential on Mac. As it so happens, the estimable John Poole of Primate Labs plans for native Apple Silicon Mac support in the upcoming Geekbench 5.3 release.

Form Factor, Feature Set

When will we see new Apple Silicon Mac designs?

I’m not expecting that much in terms of hardware design changes yet. But “quality of life” improvements such as Face ID, the massive (untapped) potential of Apple’s increasingly-powerful Neural Engine, the impending replacement of PotatoFaceTime™ cameras with something closer to an iPhone 11/12 system, better baked-in platform security, etc. should do fine in the meantime. Eventually, rounded, to-the-edge displays, stylus support, built-in 5G/ultra-wideband, and fun new form factors may follow.

Sidenote: I fear that only Mac Pro will be the only Apple Silicon Mac with user-accessible RAM, but to be brutally honest, most Mac users just don’t care anymore. Sadly, as an iMac user, I still do.

Pricing

• How on Earth will Apple price these Macs?

You can make the case for ANY scenario:

Much higher performance vs. the rest of the Intel/AMD/Qualcomm-ARM competitive class? Apple could fairly demand a price premium, consumer blowback aside.

Apple can also take an iPhone 12 Pro-type approach and bake Apple Silicon’s “added value” into existing Mac price points at no extra charge.

Apple could even take the “crowd-pleaser” option and provide great performance for $100-200 or so less than expected, sort of how iPad Air A14 and iPhone 12 mini provide best-in-class computing power for well under $1,000.

Ultimately, pricing should boil down to actual Apple Silicon Mac cost of goods sold (R&D, BOM, marketing expense, and so on). Why? Apple went “upmarket” with iPhone X, XS and the Pro-series…and gross margins have never budged. That’s because Apple, counter to narrative, simply takes development costs in stride – meaning that iPhone 12 Pro costs $999 and up for consumers because it’s just plain expensive to produce. For now, I expect Apple to “maintain” Mac gross margins at whatever the current levels are. Certainly helps that Apple Services “subsidize” hardware.

On Tuesday – the biggest change to Mac since the introduction of the Mac, as Apple decides to pursue its own silicon destiny. It’ll be exciting!

I Wanna Be Mad About iPhone 12’s Rumored Pricing, But…

Hi everyone! I’m surprised I’m blogging anything at all, too. Twitter’s just…easier. Even without an Edit button.

Anyway, about the title. Rumorology on the iPhone 12 lineup has changed quite a bit over the past several months. Back then, there was a sense that 5G would be a cost driver for iPhone (what 5G smartphone SKU hasn’t been more expensive than its LTE predecessor, right?), but the Pro/non-Pro distinction would be kind of the same as before.

In other words, pay a perfectly understandable ~$50US more for 5G, nice new form factor for all iPhones, but the non-Pros will have obvious signs of cost-cutting vs. the Pros (dual camera, no mmWave 5G, no LiDAR, possibly lower-spec OLED)

Here’s Jon Prosser’s tweet on pricing back in April:

Now, the “rumor consensus” (never fully accountable, but increasingly accurate and often-entertaining) is shifting towards a $799 iPhone 12 (non-pro 6.1), which would be the most expensive mainstream flagship iPhone to date.

But there’s some extra value for the (rumored) upcharge:

• ALL iPhone 12s will offer OLED with the same basic brightness/contrast specs as the Super Retina XDR (Apple-speak for 2,000,000:1 contrast ratio and 800 nits typical/1200 nits max brightness)

• ALL iPhone 12s will upgrade to a new glass screen

• mmWave 5G across the board in the US

Which, if you think about it, does make a kind of sense, if you accept the rumors that iPhone 12 is moving to a unified design across the lineup, versus the XR/XS and 11/11 Pro distinctions of yesteryear.

Yes, as a consumer I’m bothered by the iPhone XR’s technical successor improving in price one year ($749 >> $699), only to “regress” a year after ($699 >> $799). But Apple’s also bringing back not-so-phablet iPhone sizing with the iPhone 12 5.4, and quite possibly at the same $699 as the iPhone 11. (Note: iPhones 4 through 7 base-priced at $649 without carrier promo/subsidy in the US)

And as an investor/home-gamer Apple fundamentals tracker, I’m all but certain based on past history that Apple will see essentially zero gross margin uplift from the higher-priced iPhone lineup (see: iPhone X, XS, 11 Pro)…

…which seemingly violates The Law of Upmarket™

…which perhaps isn’t always applicable to consumer tech

…which really does spoil all of us when you consider tech pricing and accessibility 20, 10, even 5 years ago (say hi, Raspberry Pi Gen 4!)

I realize a Raspberry Pi base-prices at $35US. But paying the same-as-iPhone-11 $699 for a new-design iPhone 12 5G, with modern-enough OLED screen tech, that’s a little smaller than the iPhone 11 Pro?

I just can’t get too upset if that SKU and pricing pans out. Even if Apple doesn’t include a power adapter.

I’ve more or less moved to Apple News

(And here’s where you can go to visit the channel (requires iOS device in or set to US, UK or Australia for now), and hopefully add the ‘Tree to your roster of favorite channels: https://t.co/IWseKSCmDV )

The transition’s more or less complete, and I’m now able to post in “native” News format. I certainly wouldn’t have minded updating both this blog and the Apple News channel at the same time, but that apparently is impossible in the WordPress Free context – and I don’t have any current plans to “hire” a web host + get WordPress Regular + Apple News plug-in.

Well, not yet anyway. One thing at a time for this humble blogger.

For those dozen or so loyal readers, some of whom may not have an iOS device or be in an area where it’s practical to access Apple News, I apologize, but it’s difficult for me to “port” my Apple News posts back to WordPress. Basically it only kinda works on text. Hyperlinks and images have to be imported manually. The TL;DR blog syndrome I suffer from 😰 doesn’t help any.

And, believe it or not, when the post content or gravitational pull of the moon or the day is right, I bring in way more Apple News readers than I ever did WordPress readers.

So even though I feel WordPress is a better blogging platform overall, it’s really a no-brainer for me, in terms of getting readership anyway, to continue focusing on the News channel for the time being. No seriously, if you only knew how many daily visitors I can now get on a good day, you might straight-up laugh in disbelief. Granted, it’s still not much, but it’s better than the 100-ish visitors I used to get on a very good day in WordPress-land, and that’s when I was posting more regularly.

Hey, if it makes you feel better, I’m getting just about zero “advertising revenue” from this “iOS-only” experiment. Yeah, I kinda wish Apple News was compatible with the desktop Web too. Alas.

The blog isn’t going anywhere, but, just wanted to let you know where the new stuff’s moved to. As always, thanks for reading.

 

_____ Than Feared: iPhone 6s/Plus Are Mostly on Their Own for $AAPL’s Transitional FQ2 2016 (+FQ3 Quick Look)

(REMINDER: Please refer to the About + Disclaimer section. You won’t ever find actionable investing/trading advice here, just a humble home gamer in his corner of the Web trying to understand Apple and tech a bit better. As you know, no one has any clue what AAPL stock will do from day to day, quarter to quarter, year to year, even if earnings “seem good enough”.)

Also – TL;DR warning, more than usual. Don’t try reading this in one sitting. I know, the late posting doesn’t make things any easier.

A Relatively Glum Apple Quarter, Which, Like Many Before It, is Already in Wall Street’s Rear-View Mirror

As it so happens, the AAPL bears and skeptics were most correct about Apple’s FQ1 and its FQ2 guidance (yup, I’m more than fine admitting when I’m wrong) – though the stock itself had already bottomed out by that time of the late January earnings release.

Apple’s resistant, but not immune, to intense ForEx pressures and global macroeconomic uncertainty. Apple bulls (myself included) have had to recalibrate quite a bit, given the twin outliers of

(1) an incredible demand for iPhone 6/Plus (Apple’s very first BigPhone/HugePhone lineup), which may bear a passing resemblance to my “sales nova” hypothesis, and

(2) broad-based economic “nervousness” (since I don’t see any “world is in recession!” headlines in the news) putting a damper on global spending.

The question now is, has Wall Street crossed the line of overcorrection, or is the current consensus of around -3% revenue growth for the entire fiscal year actually giving Apple the benefit of the doubt? Continue reading

Part 2/2: With iPad Pro 9.7 and iPhone SE, Apple Gets “9-10% of the Way There”*

*(For the year; in annual revenue terms; maybe. More on this later.)

Part 2 of 2 covers iPhone SE, and “adds it all up.”

Part 1 of 2, in all its TL;DR “glory”, is here.

How Apple Got to 900+ Million Sold: iPhone, 7 B.I.P. (Before iPhone Phablet) – Present

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Prior to Apple’s September 2014, “extremely late” move to up-size iPhone (for the second time), it sold quite a few smartphones that were (1) iPod nanos by comparison and (2) really quite popular, despite blogger/pundit complaints spanning no 3G, no LTE, accursed sealed-in battery, insufficient SoC RAM and no expandable memory, to say nothing of the closed OS.

Continue reading

Ye Olde AAPL Tree Blog is Moving, Sorta!

You may have noticed me kvetching (am I using that right?) about the conversion from Apple News RSS (which…took a while to get on in the first place, because I’m a nobody) to the new-to-most Apple News Format (which…hopefully takes less than a month since I’m already on RSS, but then again, I remain a nobody).

I’m a bit excited to get started blogging on Apple News, given the newness of the platform and the small chance my posts find a broader audience. (As for the prospects of me making back any significant portion of my $99, um, “news developer fee”/earmarked tax write-off 😛 in iAd revenue…well, I should probably cut back on the coffee budget, anyway.)

For those few but much-appreciated regular readers of mine, a quick Q&A on the changes.

Are you “going premium”?

HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA

let me catch my breath

HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA

[POST-WWDC 2016 UPDATE – Well, Apple News now has subscription options added in as of iOS 10. So, leave me to my momentary delusions of getting even $20 in subscription revenue per year, TOTAL, for the moment.]

You’re telling me you might post more than once or twice a quarter? YOU.

Quite possibly. Maybe once a month! 😉 Actually got inspired to write up 2-3 posts in the span of about a week. So, depends on how things go.

Where will I be able to find your newest blog stuff?

On the “AAPL Tree” channel, same as currently, except it’ll be hosted directly from Apple as I understand it vs. the current RSS approach (unless I find my own Apple News-compatible host as a mirror).

Here’s the direct iOS-only link to my channel:

https://apple.news/TuY-CX_-jRziryK895rDu6g

What if I’m not in the US, UK or Australia? 

I have readers outside the US, UK and Australia? Kidding, I know I have a few, to add to that other few in the Apple News-supported regions, all of two countries. And I appreciate you all.

I’ll probably re-post most articles to WordPress within a few days after publication to Apple News (which, according to Apple, is a matter of seconds once you’re cleared to post in Apple News Format without restriction, vs. the 30-60 minutes or sometimes never via RSS). For stuff like Apple earnings, I’ll try to post to WordPress with a shorter delay. Apple News Format, unfortunately, is not nearly as “copypasta-friendly” as WordPress, though as you’ll see from my Hyper Light Drifter review (should it ever appear), Apple News Format does help make blog posts look better on a basic level without much effort.

If I feel so inclined, how might I support your work, should you be cleared to post in Apple News Format?

Well, shares, recommendations, and retweets are the lifeblood of my ego – er, this blog – it’s all related, isn’t it? 😉

If you’d be so kind to support me, indirectly, financially, well, I know I don’t have a fraction of the necessary audience for, say, Patreon, but rumor (read: Apple’s own public-facing stuff) has it Apple parcels out ad revenue to news content creators…and I have yet to see a single ad on the News app. But if you DO happen to see one near a post of mine – and you have the bandwidth/time to spare – I dunno, try clicking it now and then to see what happens.

Closing in on three years and a bit over 250 posts, I’m interested in seeing how my next “phase” in blogging goes. Thanks for reading, and I hope you can catch my newest posts on the News app in “native” format soon!

 

Part 1/2: With iPad Pro 9.7 and iPhone SE, Apple Gets “9-10% of the Way There”*

Part 1 of 2 covers iPad Pro 9.7.

* (For the year; in annual revenue terms; maybe. More on this later.)

To radically oversimplify what happened during Apple’s March 21 event,

• Apple brought the prior “full-size” iPad “upmarket” with iPad Pro 9.7,

• while bringing an impressive swath of upmarket features to the iPhone 5S “shell” in the form of iPhone SE, while also lowering the “most affordable iPhone” price floor to $399 (US) from the prior $449 that’s been in place since…probably the days of iPhone 3GS becoming Apple’s first “free on 2-year contract” phone (remember those?) circa October 2011, nearly 4.5 years ago.

But what do iPad Pro 9.7 and iPhone SE mean in terms of impacting Apple’s revenues? Do these products even make much of a difference?

After all, Apple’s FQ1 (FQ = Fiscal Quarter) 2016 results and conference call (citing, among other factors, strong global macroeconomic headwinds) have a lot of people – including your humble correspondent – wondering if Apple can grow revenues at all from FY (Fiscal Year) 2015. (Case in point: All those analyst revisions seeing Apple annual revenues down about 2.7% YOY on Yahoo! Finance as of March 29, 2016 – it wasn’t always that way.)

I’ve been thinking about the revenue impact question here and there since the March event rumors started popping up, and while this blog never does treatises, I do have something of an outline, home-game-humble like always, for your “consideration”. So let’s look at how iPad and iPhone SE might, within a year of launch, get Apple around 1/10th of the way to its current, $230B-ish level of annual revenues. Continue reading

A Lousy First Half, Eh? $AAPL FQ1 2016 Earnings “Estimate” + FQ2 Quick Look

Today, I’m takin’ it to 11.

Eleven consecutive home game AAPL quarterly earnings previews/estimates/whatevers, that is. Why? There must be some reason I keep this up. Clearly it’s not the fame. 😛

Anyway, for those of you who suffered through the “background” $77B revenue mix post (a thought exercise, but which included some genuine “estimates” on the non-iPhone revenue lines), this will (should) be shorter, and will include my for-entertainment-purposes only horseshoe toss (read: “estimate”) on FQ1 2016 results, plus a dash of comment on the upcoming Impossible Compare FQ2 2016. For both fiscal quarters, it’s still all about iPhone, with a side of Apple Watch and iPad Pro, until we see otherwise. So let’s get right to it.

(REMINDER: Please refer to the About + Disclaimer section. You won’t ever find actionable investing/trading advice here, just a humble home gamer in his corner of the Web trying to understand Apple and tech a bit better. As you know, no one has any clue what AAPL stock will do from day to day, quarter to quarter, year to year, even if earnings “seem good enough”.)

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Post Digest: Why Analysts Are Bearish on iPhone in FQ1 2016, NOT Just FQ2 2016, and Why Unit Growth Concerns May (Again) Be Overblown

The iPhone section of my FQ1 2016 Apple earnings preview may be of greatest interest to those interested in AAPL earnings season. So I’m posting it separately, since it essentially stands alone, plus is a much shorter read.


iPhoneThe Worst Best Thing to Ever Happen to Apple (No Seriously, Check the Stock Quote)

Last 8 quarters of unit growth:

7%, 17%, 13%, 16%, 46%, 40%, 35%, 22%***

***Remember, FQ4 2015’s numbers were heavily skewed by the “Missing iPhones” phenomenon, where perhaps 6M iPhones (maybe more, maybe less) were counted towards FQ1 2016, for a total of perhaps $4B in “deferred revenue” (maybe more, maybe less) on account of Apple selling iPhone with only two days to go in FQ4 2015, versus the “usual” nine days in the prior three FQ4s. I mentioned this near the end of my FQ4 2015 AAPL home game earnings preview, if you want more detail on how I arrived at those assumptions (link is here – it’s towards the end of the linked post). If you added 5 million iPhones back to FQ4, the YOY unit growth rate would’ve been closer to 35%.

It’s true that gloomy/skeptical/bearish/whatever analysts/pundits/blogger/whoevers 😀 are already looking towards FQ2 2016. And you know what, I can’t blame them. FQ2 2015 saw (1) the first full quarter of iPhone 6/Plus availability (2) in China (3) on a modest-sized China celco with about 800 million subscribers (4) amidst a mega-gigantic connection shift from 3G to 4G smartphones (5) during a time interval spanning Chinese New Year. So, insofar as FQ2 2016 represents a “tough compare” to the extent that China had a truly outlier iPhone quarter, I understand. It is a tough compare.

But, um, last I checked, there’s still a lot of the following type of sentiment out there, which seems a little too dour:

And if Wall Street thinks iPhone units might grow 1-2% or so from FY 2015 to FY 2016, they’re really thinking all of fiscal 2015 was a “tough compare” (which they do). And, by necessary implication, the growth floor completely falls out from under the Greater China revenue geography:

Despite China Mobile having some…fairly decent 4G adds for the holiday quarter (spoiler alert: December 2015 4G adds set an all-time record):

“Well, you see, it’s all gonna come crashing down soon enough. Besides, iPhone 6S, 6S Plus, and cheaper iPhone 6 and 6 Plus are passé in China. Because…it’s just this feeling I have.

Did I mention iPhone is so very expensive in China?”

All right, enough “trolling”. We can address the Samsung/Xiaomi Theory of Smartphone Momentum later.

Here’s what you get when you force-fit iPhone with a fairly reasonable, ForEx-affected ASP guess to a $77B revenue mix. You may disagree strongly, and that’s fine. (YOY iPhone/iPad/Mac growth percentages in terms of units):

REVENUES revs units “ASP”
iPhone $50.872B 76.5M 665
iPad $8.669B 18.25M 475
Mac $6.952B 5.675M 1225
Services $5.28B
Other Products ~$5.23B (Watch rev horseshoe toss: $2.78B, 5.05M units) Watch ASP Wild Guess: 550
YOY iPhone 2.73%
YOY iPad -14.8%
Total revs $77.00B YOY Mac 2.83%
YOY Services 10.02%
YOY Other Products 94.4%

(-8.89% ex-Watch)

Might ASP be higher than $665? Sure, but Tim Cook also mentioned a 700 basis point revenue headwind on a constant currency basis when comparing to FQ1 2015. That’s powerfully negative. I’m not sure how much of that 700 points could be mitigated by Apple’s ongoing, industrial-strength currency hedging program (it does appear currency hedging is “considered” in the guidance), but it’s probably not most of it. There’s also the very distinct possibility that iPhone 6 and 6 Plus remain vibrant and popular as they become the n-1 and n-2 (i.e., one-year-old/two-year-old) iPhones. They’re far superior mid-premium tier offerings compared to the iPhone 5S. Higher “mid-range” iPhone mix could mean a second dampening effect on ASP.

Might ASP be considerably lower than $665? Well…who here thought iPhone ASP would be $670 for FQ4 2015, a quarter that had exactly two days of iPhone 6S/Plus sales? An ASP that was higher than FQ2 (~$659) and FQ3 2015 (~$660) amidst horrific ForEx headwinds? I rest my case. Also, lower ASP means a likelihood of higher iPhone units. Additionally, consider Apple’s September 2015 accounting change, which removes between $5-10 of revenue deferral for each iPhone (read: increases ASP).

Now that ASP’s been addressed, let’s look at the concept of around 2.7% holiday quarter iPhone unit growth.

I have to admit, management did a convincing job of moderating iPhone expectations. Or…did certain analysts overindex on a single sentence? Let’s begin with this understatement-of-the-century line from Tim Cook (hat tip TheStreet’s free!, no-signup! earnings transcript service):

“We believe that iPhone will grow in [FQ1 2016]…”

I should hope so, Tim. And as for China:

Also, if I zoom out and look at China, as I’ve said before, and just to make the point once again, is we see an enormous change in China over the next several years. The latest study I’ve seen from McKenzie indicates if you look back five years, China’s middle class had about 50 million people and it, if you look ahead five years, it will have 10 times that number in it. And I feel like we are reasonably well positioned in China, I’m sure we can do better, but I think we are doing fairly well there.

(Emphases mine.) Do CEOs of companies this large…troll? Is that a thing? Now, to be fair, Tim did drop what I interpret to be a fairly bullish hint (at least as to FY 2016 overall), when responding to the eternally dour Toni Sacconaghi of Sanford C. Bernstein (something having to do with China being a first-stage launch country for iPhone 6S/Plus vs. having to wait until mid-October 2014 for iPhone 6/Plus, advantaging FQ1 2016 at the expense of FQ2 2016):

And where I think we will do quite good in iPhone, I do believe we will grow this quarter as we put in our guidance, that when you start with the number in the low 30s in terms of the percentage of the install base that’s upgraded, that had a phone pre the iPhone 6 and 6 plus, that number is still likely to leave a lot of headroom beyond December.

(Emphasis mine.) That’s a “macro” upbeat signal if I ever saw one, and it’s a clear signal about the install base unit sales opportunity (later in the call, Tim Cook would actually say the percentage of install base yet to upgrade was 69%, to make his point that much clearer).

Since Greater China is Apple’s fastest growing revenue geography, to the point of surpassing Europe for the first and likely final time, here’s Tim Cook answering a China economy/iPhone question from Shannon Cross of Cross Research:

Yes, if you look at China, we grew from an iPhone point of view, Greater China we grew 87%, the market grew 4%. If you take iPhone out of the market number so the market ex- iPhone actually contracted slightly. So we have been able to grow without the market growing. iPhone 6 was the number one selling smartphone in mainland China last quarter and iPhone 6 plus was number three. So, we did fairly well.

The economic question, which I know there’s been a lots of attention on, frankly, if I were to shut off my web and shut off the TV and just look at how many customers are coming in our stores regardless of whether they are buying, how many people are coming online and in addition to looking at our sales trends, I would not know there was — there was any economic issue at all in China.

(Emphases mine.) Sustainable megatrend or nitrous oxide boost from Fast and Furious. Within a country vitally important to Apple’s continued growth. Which do you believe? Or…should you believe?

As it so happens, 76.5M iPhones sold in FQ1 2016 – a number I independently mental-blended – exactly matches the Wall Street analyst consensus collected by Philip Elmer-Dewitt of Fortune Magazine. Two possible explanations spring to mind:

(1) You’d…think the pros accounted for the “Missing iPhones”, right? And that assuming channel inventory remains steady, they’re actually projecting an apples-to-apples iPhone unit decline in the neighborhood of 5% if those 6 or so million iPhones weren’t included?

(2) Or…maybe they’re assuming a major channel inventory drawdown? 13 weeks, 74.5M iPhones sold in FQ1 2015, adjust for possibly non-linear relationship of channel inventory to units sold per week…say, 1.5 weeks worth of drawdown vs. the year-ago quarter?

Well…according to Luca Maestri back in FQ1 2015, there was a YOY unit decline in iPhone channel inventory from FQ1 2014 to FQ1 2015 (-200,000 units), supply/demand balance wasn’t achieved until January 2015, and Apple ended up below the 5-7 week channel inventory target range on a look-forward basis (do note, Maestri does switch between look-forward and look-back from time to time if I remember correctly).

Huh…well, the channel was already starved as it was, I guess. And being conservative on channel inventory doesn’t mean you drain channel inventory to the point of straining your ability to supply product to the over-200,000 iPhone points of sale.

It’s safe to hold pros to a higher standard, so if I may be so bold – choose one concern, not both.

Wrapping up, iPhone estimates for FQ1, to my eyes, don’t reflect a fear-shift or anxiety-shift to FQ2 2016. Quite the contrary – the degree may be a tad lower vs. the upcoming March quarter, but Peak iPhone “concerns” are very much present in the December quarter Wall Street consensus.

Being as objective as I possibly can – I can’t help but think these iPhone concerns are overblown for the to-be-reported quarter, and a bit beyond.