Another downer note on iPhone sales, little worry over the EU and the App Store, and the next round of OS betas is already rolling.
UBS Analyst Negative on iPhone Sales, Still Positive on Apple
Another Apple watching financial analyst is leaning less positive on iPhone sales. Not for this quarter, of course. The December-quarter is going to be ghastly. That said, a number of analysts think sales of iPhone 14 Pro and iPhone 14 Pro Max missed this quarter will be made up in the March-quarter. Not all analysts agree, and you can add another to that list.
Apple 3.0 ran part of a note Wednesday from UBS analyst David Vogt. Basically, he seems to think the wait is too long — stretching now to the second week of January in the States. Delivery times are starting to overlap regular seasonal slowdowns in his estimation, and that is “resulting in perishability.” In other words sales lost, not sales deferred.
For the December-quarter, Vogt’s dropped unit expectations from 83-million to 79-million. For the March-quarter, he dropped unit expectations from 61-million to 58-million. All of that is enough to get him to drop iPhone revenue by about 3% in FY23. And that is enough to bring Apple’s total revenue for FY23 down roughly 2%.
Less than ideal to be sure, but he is still a fan. Mr. Vogt has a “Buy” rating on Apple shares. He’s set the UBS price target on the shares at $180.
Apple Analysts Evercore Analyst Unfazed by Third-Party App Store/Sideloading Talk
Sideloading and third-party app stores are no business worry for Apple — that’s the thinking of a couple of Apple watching analysts. I told you yesterday of a Bloomberg report that has Apple prepping for sideloading and third-party app stores — perhaps as early as next fall with the anticipated release of iOS 17. That would be for EU member states only, according to the piece. It’s a long way off, but money is money and it likes to know when or whether to worry.
Apple 3.0 ran a couple of reaction notes. We’ll start with one from Evercore analyst Amit Daryanani. He gives clients a few reasons to not worry. Quoting his note:
The impact from side loading will likely be minimal and we expect the App Store to remain the main avenue for app discovery as its unlikely consumers will be interested in this more complex method of downloading an app. There are also significant security concerns with side loading which may give Apple some flexibility in how they implement this feature.
Where he does see cause for concern is the EU’s insistence “that Apple allow third party payment systems in apps…” While Daryanani seems doubtful that the average user will want to share payment info with more parties rather than sticking with Apple’s payment system, Apple may be forced to lower the commissions it charges to keep people from flipping.
Whatever happens eventually, the analyst doesn’t seem to see it as a big deal right now. Daryanani maintains an “Outperform” rating on Apple shares. Evercore’s 12-month price target on the shares is $190.
About as unfazed as Daryanani is Morgan Stanley analyst Erik Woodring. According to his note, he and his “don’t believe this potential change presents a material risk to Apple’s App Store/Services revenue or ecosystem strength.” The way they see it, even if the sideloading and third-party app store things happen, and if every App Store user in the EU bugged out — bringing Apple’s App Store sales commissions to zero, Woodring says “it would equate to just a 4% hit to Services revenue, a 1% hit to Apple’s total revenue and a ~2.5% hit to Apple’s EPS.”
Needless to say, he does not see that happening. Now, if the legislation like what’s coming in the EU went global, Woodring says:
…the core question becomes whether consumers decide to speak with their wallets and abandon the App Store for alternative options. Our survey work shows a very low likelihood of this scenario playing out, as Apple’s customers have long prioritized the security, centralization, and convenience that the App Store brings.
Woodring even sees a way that the EU App Store changes could benefit not hinder Apple shares. The threat of regulation may have acted as an “overhang,” while the regulation is a known thing.
Mr. Woodring maintains an “Overweight” rating on Apple shares. Morgan Stanley’s price target on the shares is $175.
Developers Get Access to Apple’s Next Wave of OS Betas
It seems like only yesterday that Apple released updated operating systems for just about everything it makes. Of course, it was actually the day before. Still — one day after all of those updates, the first builds of the next updates are out to developers. MacRumors ran a number of pieces Wednesday about various new builds out to Apple’s developer crew. They included reports of iOS and iPadOS 16.3, macOS Ventura 13.2, watchOS 9.3, and tvOS 16.3.
Testing a Security Feature
While it’s hard to get too excited about anything in such early betas, one promised security feature seems to be making its way. Another piece from MacRumors says support for Security Keys for Apple ID turned up in the iOS, iPadOS, and macOS developer betas.
Announced just last week, Apple described this feature then saying:
Security Keys strengthens Apple’s two-factor authentication by requiring a hardware security key as one of the two factors. This takes [the company’s] two-factor authentication even further, preventing even an advanced attacker from obtaining a user’s second factor in a phishing scam.
It’s probably a feature any user could use. Still, the Cupertino-company says it’s really meant for high-profile targets like activists, journalists, celebrities, and members of government. And testing on it is underway.
Apple TV+ Series ‘Dear Edward’ Gets Early 2023 Premier
A limited-series Apple TV+ drama has gotten a premier date. AppleInsider has news on the series Dear Edward, the first title to come out of Apple’s overall deal with Friday Night Lights creator Jason Katims. “Announced in February,” the piece says:
…the series tells the story of Edward Adler, played by Colin O’Brien, who survives a plane crash that kills every other passenger on the flight, including his family. As he tries to make sense of his life after the tragedy, unexpected friendships, romances, and communities are formed.
Palmer director Fisher Stevens directs the first episode. Other stars in the show include Taylor Schilling of Orange is the New Black, and Connie Britton of the series Nashville and (of course) Friday Night Lights.
Dear Edward premiers on Apple TV+ on Friday, Feb. 3.
Apple TV+ Announces Two Sports Documentaries
‘Bounce It Like Becker?’
Two more Apple TV+ titles to tell you about — each dealing with sportsball. First, the Cupertino-company issued a press release Wednesday announcing a two-part documentary on tennis star Boris Becker.
The whole thing feels kind of weird, to be honest. According to the release, the “Apple Original docuseries includes three years of exclusive access to Becker before his sentencing in April 2022.” Criminal, but nothing creepy, apparently. The release says Becker “was sentenced to two-and-a-half years in prison for hiding assets and loans to avoid paying his debts.” According to the release:
The untitled series aims to explore every aspect of the man who became a tennis sensation after winning The Wimbledon Championships at the age of just 17, going on to win 49 career titles including six Grand Slams and an Olympic gold medal, as well as his high profile, sometimes tumultuous personal life.
I’m sorry… Three-years of filming, he went away almost a year ago, and they don’t have a title? Maybe they just don’t want to tell us yet.
No title, but lots of big names. Produced by Searching for Sugar Man’s John Battsek and directed by Oscar-winner Alex Gibney, interviewees include Becker himself, “members of his immediate family and tennis stars including John McEnroe, Bjorn Borg,” and others.
To go with the lack of title — a lack of release date. No word in the release on when… whatever it’s called will land in the stream.
Begun the Soccer War Has…
And finally today, I’m starting to think Apple is kind of into soccer. The Mac Observer says:
Apple TV+ has announced a new four-part sports documentary called “Super League: The War for Football,” which takes an intimate look into European football, and a scandal that almost changed the game forever.
Apparently the incentive structure was weird and controversial? I’d read you the description, but I’m afraid I’d spoil it. Also, I’m afraid one of both of us would fall asleep. The trailer’s kind of interesting, though. You can catch that on YouTube. I think I’d rather see the Aaron Sorkin movie about all of this. Then again, I’m not a soccer fan. Or a football fan. Or a football fan.
The docuseries precedes Apple’s Major League Soccer premier in February. Super League: The War for Football hits Apple TV+ on Friday, Jan. 13.
Hey cool. We get one of those.
Today on The Mac Observer’s Daily Observations Podcast
Bloomberg says Apple is prepping iOS for third-party app stores and app side-loading in the EU as early as iOS 17. TMO writer Nick deCourville joins me to talk over potential pros and cons. Plus — early takes on the talk from a couple of financial analysts. That’s all today on the Daily Observations Podcast from The Mac Observer.