A good news/bad news note from Credit Suisse, Apple Watch as sticky attachment, and a chance to own some of Steve Jobs’ stuff. All that and more on today’s Observation Deck.
Credit Suisse Positive on September-Quarter, Less Optimistic for Quarter Ahead
Apple’s next quarterly earnings call should be a good one. Past that — eh? That paraphrases a note from Credit Suisse analyst Shannon Cross. Seeking Alpha (via Apple News+) has written up a note she wrote. In it, the piece says she raised her September-quarter “revenue and earnings per share estimates by 1% on continued strong sales” of iPhone 14 Pro and iPhone 14 Pro Max. She’s now looking for revenue of ~$89.7B, up from her previous expectation of $88.7, on EPS of $1.30, up from her previous expectation of $1.26.
It may not be all about the phone. According to Seeking Alpha:
Cross also noted that although Mac, iPad, wearable, and home and accessories supplies were constrained in the third quarter, it’s possible that supply chains improved, notably helping the Mac.
While all the fun may not be over, she doesn’t see a lot of it coming anytime soon. “She lowered her estimates for the 2023 and 2024 fiscal years to account for a ‘weaker consumer backdrop,’” according to the piece. And yet, she’s standing pat on Apple stock. Cross has an “Outperform” rating on the company’s shares. Her price target on the shares is $190.
Counterpoint Sees 30% Attach Rate for Apple Watch in North America
In North America, nearly 1-in-3 iPhone users are Apple Watch users, too. That is the latest from Counterpoint Research. In the first half of 2022, the firm says, “Apple Watch’s attach rate reached 30%, the highest for any half year since launch.” The firm says the wearable has gone from being seen as little more than a novelty when it launched in 2015 to a big part of “three key lifestyle elements” for users – Fitness, Health and Wellness.
As Apple Watch becomes more important for users, it becomes a bigger part of Apple’s growth strategy in Counterpoint’s estimation.The firm sees Apple Watch as a potential driver for Services growth, “mainly through subscriptions of Apple Music, Apple Care and Apple Podcasts.” Additionally, Counterpoint argues that Apple Watch strengthens the hold Apple has on consumers, keeping “churn under check” and creating “more hardware opportunities for Apple.” That’s important as the Cupertino-company pushes harder “into health, fintech, automotive and beyond.”
On the financial side, Counterpoint sees the wearable’s Average Selling Price going up with “the introduction of more premium variants such as the new Apple Watch Ultra…” One kind of wonders whether sales of the higher-priced device will offset the lower price of Apple Watch SE. Then again, if Apple sales are robbing from Apple sales to fill Apple’s coffers, seems unlikely that Apple would mind.
Overall, the potential is huge. According to Counterpoint:
If Apple views every iPhone user as a potential Apple Watch user, then the annual revenue opportunity for Apple Watch would be nearly $70 billion, or nearly 550% higher than the current estimated annual Apple Watch revenues.
Mac Geek Gab’s Dave Hamilton says Apple Watch is an aspirational device. A 100% attach rate is definitely an aspirational number.
Trade-In iPhone Go Missing? It’s Not Just You!™
If you sent in an old iPhone as part of Apple’s trade-in program and Apple says they never got it — It’s Not Just You!™ Chance Miller at 9to5Mac has written up what happened to him. He sent in an iPhone 13 Pro Max (presumably trading up to an iPhone 14 Pro Max) only to receive an email from Apple a week later, indicating that when it got there — the box was bare. Quoting the email Miller got from Apple:
When we received your trade-in kit, there was no device inside the box. If this was intended, or if you’ve already contacted us concerning this issue, disregard this email. Otherwise, it’s important that you reply with the following information as soon as possible:
The exact item(s) you placed inside the return packaging
A detailed description of how you packaged and sealed the goods inside
That could have left Miller out one iPhone and the $700 credit he was supposed to get for returning the iPhone. When he posted about the issue online, he found — It’s Not Just Him!™ “Countless iPhone buyers seem to receive an email like this every year,” according to Miller, who added, “A quick look on forums like Reddit reveals that this is a pretty common problem.” He says responding to the Apple email usually clears up the confusion. Not always though, and either way — stressful.
Many suggested to Miller that he go to an Apple store to complete the trade-in, rather than relying on package carriers. Not super helpful when you live nowhere near an Apple Store, though. Anyway — if that happens, persevere. It’s Not Just You!™
Apple Penn Square in OKC Forms Second Apple Retail Union in U.S.
There’s a new, unionized Apple Store in the states. The Washington Post says Apple Penn Square in Oklahoma City has voted pro-union, allying itself with the Communications Workers of America Union (CWA). It was not an overwhelming vote, though it was enough. Votes fell 56 for to 32 against, according to the report.
Addressing the union issue, Apple chose to not actually address the union part. In a statement to The Washington Post, Apple said:
We believe the open, direct and collaborative relationship we have with our valued team members is the best way to provide an excellent experience for our customers, and for our teams.
We’re proud to provide our team members with strong compensation and exceptional benefits. Since 2018, we’ve increased our starting rates in the US by 45% and we’ve made many significant enhancements to our industry-leading benefits, including new educational and family support programs.
Ahead of the vote, according to the Post, Oklahoma employees said they were hoping to unionize “for better pay, career development and improved heath and well-being conditions in their work environment.”
The vote now has to be certified by the U.S. National Labor Relations Board. At that point, the union can begin contract negotiations with Apple.
Apple and Mercedes-Benz Announce Native Spatial Audio Support
Some incredibly high-end cars are getting Apple Music’s top-notch sound. MacRumors says the Cupertino-company and Mercedes-Benz have announced native support for Dolby Atmos/spatial audio in select models. Those are said by the piece to include “the latest Mercedes-Maybach, EQS, EQS SUV, EQE, and S-Class models.”
OMG! B… something D.
Of course, the in sound from way out doesn’t just happen. The piece has The Verge pointing out that spatial audio requires a “Burmester 3D or 4D sound system, which can cost thousands of dollars extra.” But — you know… You’re already buying a Mercedes-Benz. Live a little… more.
Apple Watch Activity Challenge Planned for Veterans Day
It’s still a few weeks away, but plans are out for the Veterans Day Apple Watch Activity Challenge. The Mac Observer ran a piece last week outlining the event. As in years past, Apple says the event requires one to complete “any workout for 11 minutes or more. Record your time with the Workout app or any app that adds workouts to Health,” and you get one of the company’s virtual medallions, plus virtual stickers to virtually stick in iMessage and other applications.
If you’re an Apple Watch user, the device should flash a reminder a few days before the event. Veterans Day and the Activity Challenge both hit on Friday 11 November.
More of Steve Jobs’ Stuff Up for Auction
And finally today, another lot of Steve Jobs ephemera is going up for auction. Ephemera… keepsakes… we could say “stuff,” but that doesn’t sound impressive. AppleInsider says a Macintosh SE used by Jobs when he was at NeXT is hitting the block. According to the report:
The computer is described as having been originally set up for use by Jobs’ assistant in late 1987 to early 1988. The hard drive inside the machine is said to hold data relating to his working schedule, including task lists, recruiting work, travel, and details of a missed meeting with King Charles III, known at the time as the Prince of Wales.
AppleInsider says there’s “also evidence that [Jobs’] daughter Lisa Brennan-Jobs used the Macintosh SE when visiting the office.”
Now how much would you pay? Hopefully between $200,000 and $300,000. That is what the auction house Bonhams expects the machine to fetch.
Other items on the block include the Apple II: Ventless Rev 0, an Apple Macintosh Team Polo Shirt from the 1980s, a NeXT performance review signed by Jobs, three of Jobs’ Pixar business cards, and more. Happening under the heading, The History of Science and Technology, bids are open now. The sales will end with live bidding on Tuesday 25 October.
Today on The Mac Observer’s Daily Observations Podcast
TMO Managing Editor Jeff Butts takes issue with a Piper Sandler survey, and I’ve got some questions about a new smart lock on Apple’s shelves… That’s all today on the Daily Observations Podcast from The Mac Observer.