Notes Ahead of Apple’s 1Q23 Earnings

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Notes ahead of Apple’s earnings, details around HomePod, and the last of Apple Store’s original doors closes.

Cowen Still Positive on Apple Despite Lackluster December Earnings Call Ahead

Apple’s holiday quarter results will be lower than 2021, according to Cowen [& Co.], with “softness” expected due to iPhone shipments impacted by Chinese lockdowns.

That is the word from the financial publication No $#!@.

Actually, it’s from AppleInsider, though I vent my spleen not at them, but at whomever at Cowen got paid real money to write that note. 

Perhaps you haven’t heard, but the plant responsible for most-if-not-all of the iPhone 14 Pro and Pro Max units made went into COVID-related lockdown from the middle of October 2022 through the beginning of December. That put a bit of a crimp in Apple’s holiday sales and — yes… oaky… I apologize. It is the job of the Cowen analyst or analysts to let clients know what gives. Even if what gives is glaringly obvious. 

Sorry. I’m actually angry about something else. 

For the December-quarter, Cowen expects Apple revenue to come in at $118.8 billion — a 4% decline year-on-year. They’re looking for earnings per share for the quarter of a-buck-90. 

Looking ahead to… well… now, while there appear to be no kinks in the supply chain at this point, demand side may be gummed up. AppleInsider says Cowen & Crew see Apple entering a “period of slower demand due to macro factors.”

As for other stuff Apple makes, the firm thinks iPads probably “benefited from seasonality, as well as improved component availability.” They think Mac sales fell last quarter, thanks to a lack of new models on the market. That’s a fact that was actually telegraphed by Apple CFO Luca Maestri on the company’s September-quarter earnings call

Lackluster though all of that sounds, Cowen is still into Apple shares. The firm has an “Outperform” rating on Apple stock and a price target of $200.

Evercore Sees Buying Opportunity for Apple Shares

“Buy on weakness” is one mantra often heard from financial folk. Doesn’t always work. Sometimes it’s darkest before the dawn. Other times it’s darkest when the light is going truly and irrevocably out. 

Alright — I may need like a hug or something. But there’s no time. 

“Buy on weakness” is one mantra often heard from financial folk, and one being repeated by Evercore analyst Amit Daryanani where Apple is concerned. Apple 3.0 ran part of a note he wrote. Quoting part of that part:

Apple has underperformed the S&P 500 by 11% since it reported Sept-qtr earnings creating a compelling buying opportunity ahead of Dec-qtr earnings which should serve as a positive catalyst (though worth noting YTD AAPL is up 11% vs. S&P up 4%).

While he does think Apple could miss the Street’s expectations thanks to that whole iPhone City thing, he’s expecting strong color from Apple on the current-quarter. Daryanani & Friends “are expecting a Mar-qtr guide that is ~5% above consensus driven by the recovery of iPhone sales lost in the Dec-qtr.” Not that they’re getting all of those sales back. While he and his think Apple missed sales of about 8-million iPhones in the December-quarter, comments that indicate recovery of 3-million to 4-million of those this quarter would be doubleplusgood in Daryanani’s estimation. 

The analyst also reminds clients that he and his “recently added Apple to [Evercore’s] tactical outperform list as [Apple] should comfortably outperform expectations on the Mar-qtr guide.” Daryanani has an “Outperform” rating on Apple shares and a price target of $190.

Apple’s 1Q23 Earnings Set for Thursday, February 2

Just another day or two of notes like these. Then we get the post mortems. That’s because Apple is set to report December-quarter earnings tomorrow — Thursday, Feb. 2. Numbers will arrive via press release after the bell ~4:30 EST/1:30 PST. Then at 5:00 EST/2:00 PST, Apple execs and Apple analysts will go to the phones for their quarterly Q&A. You can hear that as it happens on Apple’s site. It’ll be made available as a podcast soon after. And — of course — we’ll hit light high and low right here on Friday, Feb. 3.

Words Ahead of New HomePod Homecomings

MKBHD: 2nd-Gen HomePod Leaves White Rings on Some Wooden Surfaces

A warning to people getting new HomePods this week: You will still need a coaster. It was kind of a big deal in 2018 when owners of the original HomePod found Apple’s smart-speaker leaving white rings on some wooden surfaces. In a support document published then, Apple wall all like, “yeah… that’ll happen.” According to the doc:

The marks can be caused by oils diffusing between the silicone base and the table surface, and will often go away after several days when the speaker is removed from the wooden surface. If not, wiping the surface gently with a soft damp or dry cloth may remove the marks. If marks persist, clean the surface with the furniture manufacturer’s recommended cleaning process. If you’re concerned about this, we recommend placing your HomePod on a different surface.

I say “use a coaster.” And continue to do so. A piece from MacRumors has YouTuber Marques Brownlee confirming that this is happening again with the second-generation HomePod, though “to a lesser extent…” According to MacRumors:

In a side-by-side test, [Brownlee] showed that the white second-generation HomePod left a white ring on the wooden surface that he placed the speaker on, although the stain was fainter and took longer to appear than the one under the original HomePod.

HomePod mini does not leave such rings, according to MacRumors.

2nd-Gen HomePod Goes with Traditional ‘Figure-8’ Power Connector

Here’s good news for soon-to-be owners of the second-gen HomePod: The power situation is more easily manageable. The power cord on the original HomePod was not meant to be disconnected from the speaker itself. I mean, you could — but it was highly discouraged. A piece from iDownloadBlog says the original device: 

…came with a proprietary plug for reasons known only to Apple engineers. People found the cable challenging to remove without applying force. Worse, in case it broke, you couldn’t simply replace it with a ubiquitous power cord.

You can with the second-gen model. Not only does the cord come out easily, it is (what iDownloadBlog refers to as) a “traditional figure-8 power cable.” According to the site:

The new HomePod’s power cable is still braided and color-matched like the original model, but now you can swap it for any ubiquitous power cable with a traditional figure-8-style connector.

Kind of surprising they didn’t go with USB-C, but — cool. 

Display Industry Analyst Sort of Pushes Back Against Foldable iPad

Another Apple leaker is pushing back against the foldable iPad talk. I told you yesterday of differing opinions on the subject. TF International Ming-Chi Kuo says Apple will release a foldable tablet in 2024. While Bloomberg’s Mark Gurman doesn’t say explicitly that Apple’s won’t, the well-connected Apple leaker did stress that he’s heard nothing of the sort, doubling down on talk he’s heard of an OLED iPad instead. 

Now, a piece from 9to5Mac has display industry analyst Ross Young questioning Ming-Chi Kuo’s assertion as well. The piece has Young saying he’s heard “nothing about a foldable iPad for 2024.” That said, he has heard foldable talk of a different sort for a different time. According to 9to5Mac, Young says he’s hearing chatter in the supply chain of a foldable notebook from Apple. “This product could be ready for 2025,” according to the piece, “but more details are unknown at this point.”

9to5Mac says it’s unclear what operating system this bit of folding tech would run. It leaves one to wonder whether Ming-Chi Kuo and Ross Young are hearing different takes on the same device. 

That may never happen. 

Apple TV+ Talk

‘Acapulco’ Tapped for Third Season

Apple TV+ viewers can take at least one more trip to “Acapulco.” The Cupertino-streamer issued a press release this week saying the coming of age, bilingual sitcom has been picked up for a third season. 

Seasons one and two are available to stream now on Apple TV+. No word on when season three will hit the roster. 

Two Apple TV+ Titles Nominated for PGA Awards

Congrats to the cats at the mind-bending Apple TV+ drama “Severance.” A piece from AppleInsider says that series has been nominated for the Producers Guild of America’s Norman Felton Award. That’s the PGA’s Award for Outstanding Producer of Episodic Television. As with all such awards, the competition will be stiff. Other titles in the running include “Star Wars: Andor,” “Better Call Saul,” and “The White Lotus.” 

“Severance” is one of two titles from Apple TV+ nominated for a PGA award this year. AppleInsider says the animated special “Snoopy Presents: It’s the Small Things, Charlie Brown,” has been nominated for the organization’s Award for Outstanding Children’s Program.

The world will find out how they did near the end of the month. The PGA children’s programming winners will be announced at two dates and locations — Feb. 21 in New York and Feb. 23 in L.A. The more traditional 34th Annual Producers Guild Awards will also be in L.A. They’ll be presented on Feb. 25.

Last ‘Original’ Apple Store Doors Close for Renovation

And finally today, you can call it “the end of an era” or “a continuing evolution.” Whichever you prefer, an old part of Apple’s retail chain has probably gone away. MacRumors says Apple’s final store sporting the chain’s original 2001 entrance probably closed those particular doors for the last time on Tuesday. Citing a mention from Apple Retail watcher Michael Steeber, the piece says Apple Tice’s Corner in Woodcliff Lake, New Jersey closed for renovations beginning yesterday — Tuesday, Jan. 31. According to the report:

The closure is notable given that Apple Tice’s Corner is the company’s only remaining retail store with an original 2001 storefront design, which consists of a black facade with two backlit Apple logos bookending the entrance. Steeber said the scope of the upcoming renovations is unclear, so it remains to be seen if the facade will be updated.

No word on when the store will reopen with, one imagines, its reimagined facade.

Today on The Mac Observer’s Daily Observations Podcast

Apple has a new idea for counting calories — but is it for an iPhone or a headset? TMO writer Nick deCourville will be by to talk that over. Plus a public service announcement from The Wall Street Journal that has nothing to do with man’s money… and everything to do with man’s best friend.  that’s all today on the Daily Observations Podcast from The Mac Observer.

One thought on “Notes Ahead of Apple’s 1Q23 Earnings

  • Ken:

    There is one possible use case for a ‘foldable iPad’ that is not ludicrous and quite plausible. Picture the old lampshade iMac (the first iMac I got for my kids as a family computer when we lived in South Asia). Now, replace the base, which formed a computer, with the newly resurrected full-sized HomePod, with that iPad attached via an adjustable arm, just like the lampshade iMac. This would convert that device into a touchscreen enabled HomeKit base that could double as a fully functional mini entertainment centre. The foldable screen could provide flexibility for screen size, depending on fold configuration, or as a security feature against unwanted behaviours from unsupervised children, like this, and any other untoward events that can arise from an unattended touchscreen in an open setting. Further, it could be an aid for packing, storing or moving the device without damaging the screen. When folded, the screen would be deactivated, and could require parental control to unlock and enable the screen, whilst permitting otherwise full access to the speaker system.

    Technically, one could call this an iPad, however it would comprise an all-in-one infotainment centre and HomeKit hub. And the folding screen solves a contextual problem.


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