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Daily Update for August 7, 2013
It's the TUAW Daily Update, your source for Apple news in a convenient audio format. You'll get all the top Apple stories of the day in three to five minutes for a quick review of what's happening in the Apple world. You can listen to today's Apple stories by clicking the inline player (requires Flash) or the non-Flash link below. To subscribe to the podcast for daily listening through iTunes, click here. No Flash? Click here to listen. Subscribe via RSS
Mac sales up as iMac supply improves
Mac sales were down for the holiday 2012 quarter due to supply constraints on the new iMac models, but NPD Group data is showing that sales are up 14 percent year over year for January and February. According to Piper Jaffray analyst Gene Munster, that growth is due to improved availability of the all-in-one iMacs that began shipping in November 2012. Munster believes that total global Mac sales for the March quarter will be down 5 percent year over year, but provided some positive spin in saying that there's room for "some slight upside." Munster noted that iMac sales are less impacted by cannibalization by sales of iPads, so the "vast majority of the y/y unit decline in December was likely supply." Those supply issues were apparently caused by problems with a new screen lamination processed used in the ultra-thin late 2012 iMacs.
AT&T hints at best-ever iPhone sales in holiday 2012 quarter
Today AT&T announced that it sold 10 million smartphones during the fourth quarter of 2012, beating the 2011 record of 9.4 million units. Based on knowledge of what percentage of those sales numbers have been iPhones in previous quarters, Piper Jaffray analyst Gene Munster is forecasting that AT&T sold 8.1 million iPhones during the last quarter. That's in line with AT&T's comments that it sold a record number of iPhones in the quarter. During the 2011 holiday quarter, the carrier sold 7.6 million iPhones. With that quantity of iPhones being sold by AT&T alone, Munster believes that Apple will announce sales of 45 million devices in the quarter during its earnings call on January 23. Munster is also forecasting that 50 million new iTunes accounts were added during the month of December 2012 alone. He's basing this on Apple's recent update on the App Store, in which the company disclosed that there are currently "over 500 million active iTunes accounts." That's up from the 435 million announced at the iPhone 5 launch last fall. [via AppleInsider]
Apple store vs Microsoft store on Black Friday
Philip Elmer-Dewitt pointed out an interesting "survey" conducted by Piper Jaffray analyst Gene Munster this past Black Friday that compared sales at the Apple store in the Mall of America to sales of the Microsoft store directly across the hall. Given the wild popularity of Apple products, the following stats might not surprise many people: The Microsoft store had 47 percent less foot-traffic than the Apple store. Shoppers bought 17.2 items per hour at the Apple store versus 3.5 items per hour at the Microsoft store -- with all but two of the MS purchased being Xbox games. Shoppers at the Apple store bought an average of 11 iPads per hour versus zero Surface tablets per hour at the Microsoft store. By all accounts, these stats to seem to show a bad picture for Microsoft's holiday prospects -- and its Surface tablet. However, it's important to point out that, though this is an interesting anecdotal story, it's not very scientific for a few reasons. First, it only looked at one of each store in one mall in the country. Second, while Munster's crew spent eight hours counting heads and sales in the Apple store, they only spent two hours counting heads and sales in the Microsoft store – hardly a balanced survey. Still, given the popularity of Apple's products, the greater number of products in its consumer product line, and the lackluster consumer response to the Surface, it's not a stretch to imagine that the results of this survey could be playing out at more Apple and Microsoft stores across the country.
iPhone 5 supply still stretched
To those of us who are waiting ... patiently, I might add ... for our iPhone 5s to ship from Apple, it's obvious that the supply of the newest iPhone is constrained. John Paczkowski at AllThingsD reports that many Apple Stores are reporting low inventory of the iPhone 5, and that the online store is still showing a three- to four-week delivery time. While the supply constraint is just an inconvenience to those of us who had to order the phone after the first day, Wall Street analysts are now lowering their forecasted sales of iPhones as a result. Yesterday, Piper Jaffray's Gene Munster lopped 2.2 million iPhones off of his sales forecast for September of 2012, moving from 27.2 million units down to 25 million. The news isn't all bad, though. Munster thinks the supply situation should be balanced with demand by the all-important holiday season, so he's keeping with his 49 million unit estimate for the October - December quarter. Another analyst, Peter Misek from Jefferies, was quoted by AllThingsD as saying "Remember, there are 170 million post paid subscribers coming off contract. That's overwhelming all supply ramps. The demand here is unprecedented."
MacBook refresh giving overall Mac sales a boost
The new MacBook Pro and MacBook Air models that appeared on June 11, 2012 helped overall Mac sales during the remainder of the month, according to NPD sales data reported by John Paczkowski at AllThingsD. During the month of June, Mac sales grew 1 percent year over year. While that doesn't sound like much, sales had fallen 13 percent in April and 23 percent in May. For Apple's complete 3rd quarter ending June 30, 2012, Mac sales are still down 10 percent from a year ago. However, Paczkowski believes that the recovery from the 23 percent decline in May is a positive sign. Piper Jaffray analyst Gene Munster agrees, saying that "the refreshed Macs will enable Apple to sustain a better growth profile in the U.S. through the back-to-school season." Munster is expecting Apple to ship 4.1 million Macs for the quarter as well as 16 million iPads, both of which are in line with the expectations of other Wall Street analysts. However, Munster's bullish on the iPhone, expecting sales of 28-29 million units for the quarter. The rest of the Street is expecting sales in the 25-27 million unit range. Be sure to join TUAW for our 3rd quarter earnings call liveblog on July 24.
Siri's novelty is wearing off ... for some
New York Times technology writer Nick Bilton may be breaking up with Siri, per his post on the NYT Bits blog. Bilton's on-again, off-again love affair with Apple's intelligent assistant seems to be familiar territory for some other iPhone 4S users. He notes that "Many people I have spoken to have switched Siri off and reverted to the iPhone's voice dictation service, which is more reliable because it doesn't use Siri's artificial intelligence software." According to Bilton, Gene Munster -- our favorite securities analyst from Piper Jaffray -- ran a series of 1,600 voice tests with Siri. It could hear requests fairly well, understanding 89 percent of requests made in a quiet room and 83 percent of those made on a noisy city street. But Siri's understanding isn't that great; Munster said that it could only accurately answer a question 68 percent of the time in a quiet room or 62 percent of the time on the street. Munster gave Siri a "D" and says that the beta service needs to sharply improve. Bilton has spurned Siri for another sexy voice, that of Google Voice Search on Android phones. He may not realize he can already use that same technology via the free Google Search app on his iPhone 4S. The public seems to still have a fondness for Siri. A survey by John Barrett of Parks Associates cited in Bilton's article showing that 55 percent of respondents gave Siri a high rating, 21 percent said it was "satisfactory," and only 10 percent completely dissatisfied with it. For me, I've found that the more I use Siri, the better my success with her. Maybe Siri likes me just because I used her as the lead character in a book, but I still find her enchanting, helpful, and sometimes mysterious. Don't worry about that breakup with Nick Bilton, Siri; you'll always have me, even if my love is a bit one-sided...
iPad, iPhone account for 2% of Google's revenue in 2012
A note to clients from Piper Jaffray's Gene Munster suggests that about 2% of Google's annual revenue comes from the iPhone. The note highlights Apple's reasons for extracting Google from of iOS. We suspect that we'll hear about that next week at WWDC, if Apple announces an in-house replacement for Google Maps. Here's what Munster says about Google revenue from iOS: "We estimate Google will generate gross mobile revenue of ~$4.5 billion in 2012 with approximately $500 million coming from display and $4 billion from search. We believe iOS is likely to be the biggest or close to biggest portion of mobile search revenue. Assuming the iOS generates around 40% of total mobile search revenue ($1.6 billion) and Google keeps half after TAC, iOS would generate about 2% of Google's net revenue in 2012. We do not expect any material impact to these assumptions if Google Maps were to no longer be the default mapping application on iOS." Google will likely get more aggressive in offering maps for iOS. At a press briefing yesterday, the company confirmed that enhanced maps will come to iOS as an app. The game is on. It will be fun to watch, and iOS users will get better and better technology as a result of the competition. [via Fortune Tech]
Apple poised to become world's first trillion dollar company by 2014
Piper Jaffray analyst Gene Munster raised his estimates for Apple share prices this morning, with a new 12-month price target of US$910 per share. Not long after that point, Munster expects the price of AAPL to go beyond the thousand dollar mark, which would translate to a market capitalization of over one trillion dollars. That's $1,000,000,000,000, folks. No other company has ever reached a market cap in that range. Munster bases his bullish forecast on continued strong sales of the iPhone. He believes, based on current data, that 70 percent of all owners of two-year-old iPhones will upgrade to a newer model of the iPhone, accounting for 33 percent of all sales in a given quarter through 2015. Munster's not the only Wall Street analyst looking at those lofty figures. Brian White of Topeka Capital Markets said yesterday that he believes Apple shares will reach $1,001 a share, based largely on his thought that Apple will enter the television market sometime in the next year. That market makes up a $100 billion opportunity for the company.
Tim Cook announces "record weekend" of iPad sales
Gene Munster knew that today's analyst conference call was reserved for discussion of Apple's newly announced dividend and stock repurchase plans, but he couldn't help himself -- he tried to sneak in a question about current results, specifically whether Apple would be issuing a press release about this weekend's iPad launch. Tim Cook, naturally, was prepared for this impudence, and promptly released a squadron of nanodrones to shock Munster into submission carefully guarded his answer. "We had a record weekend and we're thrilled," he said, but declined to provide any specific numbers at this time. iPad presales and in-person lines were reported as hefty around the world, but we'll have to wait a little longer to get an exact measure of how successful the Retina-equipped device launch really was.
Apple stock named top pick for 2012
If part of your Christmas gift stash includes a lot of cash, you might want to consider spending it on shares of Apple, Inc. Ticonderoga Securities has named the company's stock the 'top pick' for investors in 2012, mirroring the recommendation made last year by the group. Of the 20 companies covered by Ticonderoga, Apple was the best performer with a growth rate of 26 percent. Ticonderoga analyst Brian White was quoted on AppleInsider as saying "We believe Apple's portfolio in 2012 has the opportunity to crete more excitement around the story with our expectation for the unveiling of iTV, an 'iPad mini' and a major upgrade with the iPhone 5, while we expect the company to finally come to grips with its surging cash balance and issue its first cash dividend." The possibility of a cash dividend to shareholders was roundly dismissed by late Apple CEO Steve Jobs in 2010, as the company has preferred in the past to hold onto cash reserves to take advantage of "strategic opportunities." White isn't the only Wall Street analyst painting a rosy picture for AAPL in 2012. Longtime Apple bull Gene Munster of Piper Jaffray sees growth in almost every Apple product segment with the exception of the iPod. Munster thinks that the next-generation iPhone will have a slightly larger screen and will launch in late summer or early fall. Munster also believes that an Apple television will become a reality this year, and that the company might supplant a new third-generation iPad with a lower-priced entry as well.
Piper Jaffray: iTunes Match likely breaking even for Apple
Gene Munster of Piper Jaffray believes that for all of Apple's success with iTunes Match so far, the company is probably still only breaking even on the service. Sure, $24.99 a year from all of the service's users is a lot of money flowing in, but there's a lot going the other way as well, from server costs to music royalties and all of the other charges with running such a complicated service. Munster believes there are 135 million active iTunes users in America, so if only a small fraction of those subscribe to the service, there's a nice chunk of change coming in to Apple. But at the same time, Apple isn't expecting huge earnings from Match; it's essentially a promotion to help get people into the iTunes system and a solid mechanism for keeping them there. Apple would much rather sell you devices to listen to your iTunes library, therefore it's not quite so concerned about how you get that music in the first place. As a result, Munster's guess that Match isn't a huge moneymaker for Apple is probably correct.
Piper Jaffray reports on Apple's impressive Black Friday sales (Updated)
As reported by Philip Elmer-DeWitt at Fortune's Apple 2.0 column, Piper Jaffray analyst Gene Munster crunched his Black Friday sales numbers and found that Macs and iPads were popular gifts. Munster estimated the Apple store(s) he surveyed sold about 10.1 Macs per hour and 14.8 iPads per hour. This is a 23% increase in Mac sales and a 68% increase in iPad sales year over year. Munster also counted the foot traffic and found that retail store(s) in this survey averaged about 544 people per hour. The Piper Jaffray analyst and his team collected these numbers by standing in the retail store(s) and counting people and products as they left. Another report suggests the iPhone 4S sold equally well overseas. Deutsche Bank's Chris Whitmore polled local Apple stores and found that 75% had sold their entire inventory of the 4S on Black Friday. These stores were quickly replenished and, 30% of stores were sold out again the next day. Quarterly numbers won't be available until January, but these early reports suggest Apple is starting strong this holiday quarter. Updated the Piper Jaffray report section with the word store(s). Business Insider reports that Munster and his team surveyed "Apple stores", while Fortune said Munster was in a store.
Jobs bio fosters resurgence in Apple-branded TV rumors
The Walter Isaacson biography of Steve Jobs has just been officially released and now everyone from TUAW readers to Wall Street analyst Gene Munster is reading between the lines to see what Apple's "next big thing" will be. The biggest rumor? That Apple will be coming out with a branded HDTV that will revolutionize the television-watching experience. A lot of us don't expect this to happen -- in a recent TUAW poll, about 57% of readers thought it was unlikely that Apple would every make a TV. But based on a statement in the biography, Munster is even more convinced that Apple is going that way -- and he's even starting to forecast revenues for an Apple HDTV line. Munster has been "certain" of an Apple-branded TV since 2009, and according to Apple 2.0's Philip Elmer-Dewitt, he keyed on a particular section of the book where Jobs said "I'd like to create an integrated television set. It would be seamlessly synced with all of your devices and with iCloud... It will have the simplest user interface you could imagine. I finally cracked it." Munster thinks that the "code" that Jobs "cracked" is combining live TV with shows that were previously captured and stored on iCloud. The Piper-Jaffray analyst also believes that Apple could add Siri support "to bolster its TV offering and simplify the chore of inputting information like show titles, or actor names, into a TV." There are a number of meetings with suppliers and patent filings (including the one noted by Patently Apple in the screenshot above) that Munster cites as more evidence of an upcoming Apple TV. He goes on to show that the device, if released in 2012, could add as much as US$6 billion to Apple's bottom line in calendar year 2014.
MacBook Air, Mac mini drive strong Q3 sales
The NPD group released its sales data for the current quarter and things are looking good for Apple. Mac sales are up 22% year-over-year due primarily to the release of OS X Lion and new MacBook Air and Mac Mini hardware in July. In a research note, Piper Jaffray analyst Gene Munster crunched these numbers and presented a slightly conservative quarterly estimate. Munster believes sales climbed during the summer months due to this new hardware and will likely fall off in September after the initial enthusiasm wears off. Taking this seasonal drop into account, Munster predicts Apple will sell 4.4 to 4.6 million Macs in the quarter, a 13%- 18% year-over-year increase. Munster also estimates Mac revenue will account for 20% of Apple's overall revenue in the current quarter. Looking back at last quarter, Apple sold 3.9M Macs (14% yoy increase), but these were a mix of new MacBook Pros, iMacs and older MacBook Air and Mac mini models. With new hardware gracing almost every Mac product line except the Mac Pro, Mac sales should remain steady.
Mac sales climb after launch of OS X Lion and new MacBook Airs
Apple's current quarterly earnings should receive a nice boost from brisk sales of Mac hardware says analysts. This summer increase can be attributed to the July introduction of OS X Lion and new MacBook Air and Mac mini models. The latest NPD report suggests Mac sales may climb 26% year over year, which is six times the growth of the overall PC market. Barclays analyst Ben Reitzes is a bit more conservative with his estimate of 18% year-over-year growth for Mac sales. And, lastly, Piper Jaffray analyst Gene Munster is similarly optimistic about Mac sales. Munster believes enthusiasm for the new hardware and software will help Apple ship 4.5 million Macs this quarter. Based on these estimates, it'll be a good year for the Mac. Mac sales will continue to grow and Apple will gain market share in the PC industry. These glowing figures are a refreshing change from the rest of the PC industry which is slumping.
Survey: iPhone retention rate at 94%, interest in iPhone 5 high
Piper Jaffray analyst Gene Munster suggests interest in the iPhone remains strong. In a recent research note, he points to a small survey of 216 mobile phone owners in Minneapolis that shows 64% will buy an iPhone as their next handset. Breaking it down, 94% of iPhone owners plan to buy another iPhone. 42% of Android and 67% of BlackBerry owners expect to make the switch to the iPhone when they buy their next handset. Most of these switchers (60%) are waiting for the iPhone 5. This number is even higher for Verizon subscribers with 74% of non-iPhone owners waiting for the iPhone 5 to jump platforms. In his report to investors, Munster estimates the iPhone's market share could double after the launch of the iPhone 5. Apple will grab a substantial share from BlackBerry and a smaller amount from Android. When digesting these survey results, keep in mind the small sample size. Though interesting, the survey results may not represent the millions of iPhone and smartphone owners in the States.
Research shows Apple customers buy more apps, pay more for them
A new report by analyst Gene Munster at Piper Jaffray says that not only are Apple users buying more apps this year than in previous years, but they're also generally paying more for them. The average iPhone user will buy 83 apps in 2011, according to Munster's research, which is 61% more than the year before. And the average price per app, after falling down to the bottom a few years ago, is rebounding at an increasing rate, as developers find more and more ways to add premium value to apps and games. In terms of background, part of the reason for this is the sheer size of Apple's App Store, which now encompasses over 425,000 apps. With that many available, it's no wonder people are finding more and more to download. The average app price rising can also be attributed to iPad apps, which Apple has generally been able to set up at a higher price, given that the iPad versions of apps are often very different experiences from their smaller-screen brethren. All good news for developers in terms of keeping the App Store growing and sustainable. And with rumors of even more iOS devices due out later this year, that's something Apple will need to depend on going forward.
Wall Street analysts think iCloud's future has a silver lining
Apple fans and developers apparently weren't the only people who liked the iCloud announcement on Monday at WWDC. As reported by Fortune's Philip Elmer-Dewitt, Wall Street analysts are almost unanimous in their positive comments about iCloud's effect on the financial future of Apple. For example, Credit Suisse's Kulbinder Garcha is quoted as saying "Although Google and Amazon are already offering cloud based offering, we believe Apple has continued to lead innovation in the services space with the introduction of its iCloud, which we believe is superior to existing cloud services from competition." RBC Capital's Mike Abramsky was even more enthusiastic when discussing the PC-Free capabilities of iOS 5, noting that by "'cutting the cord' to the PC, Apple may expand its addressable device market by 4x, addressing the ~3B handset users who have a phone -- but not a PC." TUAW's favorite analyst, Piper Jaffray's Gene Munster, also chimed in on the ability of future iOS devices to work sans PC, and commented that "Bottom line is that Apple is increasing the likelihood that consumers buy multiple Apple devices ... Apple will be giving away iCloud for free (we had expected it to be priced between $25-$99 a year) ... sharing non iTunes music will cost $25 a year. (As a point of reference, Amazon's Cloud drive could cost up to $200 a year.)" The future for Apple looks as bright as the sunlight in those architectural renderings of the proposed Cupertino campus of our favorite company.
NPD: Mac sales up 47% in March
The numbers are out on NPD's March report for computer sales, and our favorite Apple analyst, Piper Jaffray's Gene Munster, said MacBook Pro sales continued to drive Mac sales overall, boosting them up to a 47 percent year-over-year-growth. Munster says that despite an overall drop in the amount of PC sales worldwide, Apple will likely announce Mac sales of 3.6 to 3.7 million units, which is slightly more than Wall Street expects. iPod sales, however, are reportedly down according to Munster and NPD's accounting. The analyst still expects sales to come in above expectations, but they're charting a 10 percent year-over-year drop for Apple's music players. Apple is set to announce earnings during a conference call this Wednesday -- we'll be listening in, of course, and we'll let you know what we hear.