The collective opinion on iPhone Duo seems to be flipping people who never thought they wanted a foldable phone. They’ll likely come from Pro and Pro Max.
Good news for AAPL given that’s a 60% average ASP bump.Source: Gene Munster
Gene Munster
G
iPhone Duo will appeal to consumers who can’t get enough content. Unfortunately for humanity, and fortunately for $Apple(AAPL.US), that’s a big market. The $2k price point breaks down to $58 a month vs $35 for Pro Max.
Source: Gene Munster
G
I dont want a bigger phone in my pocket, but Duo looks shorter, wider, and pretty thin. Hard to say how it’ll compare to a Pro in your pocket.
But many will consideration size in my pocket and hand… not the price.The Pro and Pro Max are already expensive ($1k+), so I don’t think the stretch to $2k is much of a stretch for folks alreadying buying $1k+ phones. $Apple(AAPL.US)Source: Gene Munster
G
Most important takeaway from the $Apple(AAPL.US) event :
The Duo matters because this is the first time since AirPods in December, 2016 that Apple announced a new product people will really want. Vision Pro missed the mark.Source: Gene Munster
G
The new foldable iPhone Duo is sick. No seam. Ultra thin. 50% larger screen than Pro Max.
My take: They're going to sell more than I thought before seeing it. I was thinking it would account for 5% of iPhone revenue in FY27. Now I think likely going to be 10%. The issue is the price. We don't have it yet, but it will be $2k plus. $Apple(AAPL.US)Source: Gene Munster
G
Big picture on new iPhones, AirPods and Watch is these devices will be increasing listening to us and processing what they hear with personalized AI.
My take: New world order. $Apple(AAPL.US)Source: Gene Munster
G
NHTSA needs a wake-up call.
The agency rained on the $Tesla(TSLA.US) Cybercab launch by opening a probe into Tesla’s self-certification — specifically whether a vehicle with no steering wheel or pedals meets federal safety standards.Question for NHTSA: why slow the rollout of autonomous vehicles when the best data we have says they’re 7-10x safer than human drivers? I suspect the answer is the march of nines.With all due respect, NHTSA needs to update the rules written for human drivers and move faster. About 37k people died on U.S. roads last year. If robotaxis delivered even a 7x cut in fatalities, that number would be closer to 5k.Source: Gene Munster
G
Yesterday, PwC came out with their long-run global AI data center spend report. My take is that their estimates dramatically understate the staying power of data center (aka the brain of AI) growth.
To put it in perspective, data center spend is still growing about 70%+ in the near term. PwC estimates annual growth between 2030 and 2050 will average 2.5%. That number feels too low. My best guess is that it probably approaches between 5–10% per year, as supported by PwC’s upside scenario of 6.5%. Those rates may look close on paper (2.5% vs. my midpoint of 7.5%), but they are not. Compounded over 20 years, 10% growth leaves annual spend about 4× what PwC’s midpoint is and about 2× their upside.Our Deepwater Frontier Tech ETF, $LOUP, is investing in some of these data center infrastructure companies that will aim to ride the growth of AI for decades.Source: Gene Munster
G
A humble suggestion to Ternus on his first day; make a splashy AI hire by year-end. Yes, it may cost $50m a year but the payoff would be immediate on multiple levels. 1. recruiting AI talent 2. injecting energy into product development 3. AAPL would go up.
Source: Gene Munster
G
Welcome John Ternus to your new role as CEO. Your first priority: reverse the brain drain.
OpenAI says roughly 400 Apple employees have moved from Apple to OpenAI.AI is moving much faster than the smartphone era did. The biggest long-term risk for Apple is losing control of the interface between consumers and AI.Given Apple can lean on Google’s models, it’s unlikely that OpenAI can create an AI-powered consumer device family that compels consumers to switch because it’s 10x better than Apple.It’s easy for OpenAI to design one or two consumer devices. The difficult part is designing, manufacturing, and distributing a family of devices and services (iPhone, Mac, Watch, AirPods, Apple TV) at a price point that consumers can afford. Remember, OpenAI has to come out with an offer so powerful that Apple users would want to shift away from their current investment in Apple devices. That’s an enormously high hurdle.Source: Gene Munster
G
I've been dreading the final day of @tim_cook's CEO tenure. He took Jobs’s greatest product, Apple itself, and shepherded it into a new era. But what I most admire about Cook is that despite all of the fortune and fame of becoming the world’s most powerful CEO, he kept his North Star and always cared deeply about people.
Source: Gene Munster
G
$NVIDIA(NVDA.US) down slightly on gross margin guide of 74% in Oct. Street was at 75.0%.
Big picture, the AI growth story is intact. Now have to wait for the call.Besides the margin guide, the numbers looked great. They reported revenue growth of 106% yy, compared to 107% in April (adjusting for China sunset a year ago). The reported growth in July is similar growth rates as April in face of law of large numbers is a win.Street was looking for 95% yy growth in July. Guide was a similar upside that they showed last quarter. Guided up 3%. Last quarter guided the out quarter up 4.3%. That's also a win.Source: Gene Munster
G
$Meta Platforms(META.US) is up 3% (Nasdaq is down 0.1%) on the news of the national tech addiction settlement which underscores investors value clarity, even if the news is bad. The company will pay $18B over the next 10 years. Last week, I had estimated the number would be below $25B, so these penalties are in line with expectations.
The settlement has echoes of the Big Tobacco settlements in 1998 on two levels. First, social media is addictive and can be damaging. Second, the penalties will be chump change to the providers in the end. For example, the annual $1.8B in penalties compares to what will likely be $40-60B in annual FCF in 2029.Source: Gene Munster
G
Here’s my $NVIDIA(NVDA.US) preview (they report next Wednesday).
The three most important topics:1) The pace that the growth driver is shifting away from hyperscalers.2) Impact of SpaceX massive jump in AI spend on next year's overall revenue.3) Will the component environment push gross margins below the Street exiting CY26?Source: Gene Munster
G
What’s going on with $Meta Platforms(META.US) today (down 4.4% vs. the Nasdaq down 1.3%) around the states, teen safety, and social media addiction is just the tip of the iceberg compared with what’s around the corner.
And by “around the corner,” I mean over the next year.Source: Gene Munster
G
When it comes to reaching the top of the AI model leaderboard, it pays to be smart.
Source: Gene Munster
G
We're still early:
Source: Gene Munster
G
A thought on $SpaceX(SPCX.US) CY27 Street estimates: The company’s guidance calls for about $8.5B in monthly revenue in December. The Street is currently at about $100B in revenue for CY27, which will be up an impressive 122% y/y.
Before I get into this modeling exercise, it’s worth noting the unknowns around the company’s seasonality. For example, the launch business (8% of sales in Dec-26) is lumpy, and the Cursor business is taking off month over month.My basic thought is a majority of SpaceX’s businesses are rapidly growing month over month, which leads me to believe SpaceX’s revenue will grow month over month in CY27. Having fun with numbers, if you assume 5% m/m growth off the $8.5B in December, we get to CY27 revenue of $135B compared to the Street at about $100B .The key question is what happens with the cloud business and those contracts that have 90-day cancellation provisions? My take: those contracts aren’t going away because we’re still in the top of the first when it comes to inference.Source: Gene Munster
G
Bret already contracted $6B in new compute over the past few weeks. Should reach $100B by the end of this year. The run rate at the end of June was $10.4B.
My take: the Cloud business taking off. Stock still down 6% in after hours, almost unchanged on Brets comment. I would have expected it to be moving higher on that datapoint.Source: Gene Munster
G
Cook on the new Siri beta that's been our for three week is that its "really really great", and "could not be more excited about where the product is"
My take: Thats to be expected.Source: Gene Munster
G
Cook said there are other "enormous opportunities for Apple in AI. Excited about Siri AI, and the ability to run some percentage of requests on device is strategic and a competitive weapon"
My take: The meat of Apple's AI opportunity over the next couple of years is the new Siri AI's ability to power to an upgrade cycle and bring in new users because it would be AI that just works. Other new "enormous" opportunities that will be opened up because of inference on device is likely something on wearables and an AI first device. $Apple(AAPL.US)Source: Gene Munster
G
Cook adds helpful color about why supply constraints will be more significant in September.
Cook says iPhone 22% and Mac 29% growth in June was much better than expected so they pulled supply forward into June from September "and will have one quarter that they will be scrambling for supply".My take: I believe Cooks take. While the Street was modeling for iPhone (half of revenue) to grew at 21% in June, the company guided for closer to 17%, and 22% reported is higher than 17%. As for the Mac (~10% of revenue) definitely was better than the 8% they expected, finishing up 29%.Source: Gene Munster
G
I think $Apple(AAPL.US) will guide September revenue inline to slightly higher than the Street.
That outlook will be impacted by two new forces, a headwind of the likely shift to a staggered iPhone release schedule over the next six months, and the tailwind of the price increase.I expect the net of those should results in the overall revenue guide for September to be inline to slightly better than the Street, which now sits up 12% y/y.My optimistic outlook may come across as aggressive considering the high bar, with the Street looking for 21% iPhone growth in June, and 18% in September, compared to the segment that was up on average 2% per year from FY22-FY25.The reason for my optimism:1. iPhone is riding the upgrade wave from the FY21 monster 39% growth.2. The staggered upgrade schedule will force people who have historically bought the new lower priced model and need a phone now to trade up to a Pro model. I expect fractional at best shipments of the foldable phone in September.3. The price increase will likely average 15%. While that jump will soften demand, the next effect should still be a net positive.Source: Gene Munster
G
Important comment on $Meta Platforms(META.US) capex on the last question on the call.
CFO Susan Li says 2028 capex will focus on keeping their options open. They will spend on land and power and hold off on buying the expensive "chips" until "more cards are turned over.My take: FY28 Meta capex will go higher. If they need all of the capacity they can make through the end of 2027, they will likely need more in 2028. We are just getting started on the AI uses cases.Source: Gene Munster
G
$Microsoft(MSFT.US) guide was impressive. Stock jumps from up 2% to up 8%.
Sounds like growth rates in cloud software will be stable in the teens, which suggest no bot boggy man in this guide.Sept Azure growth of 45% vs. 43% reported in June. No increase in capex.Source: Gene Munster
