Friday September 25, 2020: $112.28 +$4.06 +3.75%

[Dave]

It’s Friday and the pre-market is a little green at +$0.48. How are we going to end this trading week?

Apple critics form coalition to challenge App Store fees

The Coalition for App Fairness, structured as a nonprofit based in Washington, D.C. and Brussels, said it plans to advocate legal changes that would force Apple to change. Beyond Epic, Match and Spotify, other members include smaller firms such as Basecamp, Blix, Blockchain.com, Deezer, and Tile, along with developers from Europe including the European Publishers Council, News Media Europe and Protonmail.

Apple declined to comment but on Thursday unveiled a new section of its website explaining the benefits of its approach, saying it had blocked 150,000 apps last year for privacy violations. It says App Store fees fund the creation of developer resources such as 160,000 technical documents and sample code to help developers build apps.

Mike Sax, founder of The App Association, a group sponsored by Apple, said in statement that the new coalition's "big brands do not speak for the thousands of app makers that are the foundation of the app economy."

Once again the spoiled children are crying that the cookie distribution is not fair.

[Dave]

Apple Buys Startup That Creates Radio-Like Stations for Podcasts

Bloomberg) -- Apple Inc. acquired a startup that makes listening to podcasts more like tuning into radio stations, seeking to improve its service amid growing competition from Spotify Technology SA.

The Cupertino, California-based technology giant earlier this year bought Scout FM, which was a popular podcast app on iPhones, Android devices and Amazon smart speakers, according to people with knowledge of the deal.

While podcast apps, including Apple’s, traditionally work by letting users pick an individual podcast to listen to, Scout FM created podcast stations on various topics. For example, if a person is interested in sports, the app would create a station that mixed together a curated selection of sports podcasts.

The app determined a person’s interests based on listening history, inputs of their preferences and suggestions form artificial-intelligence based software.

Scout FM was popular among some users of Apple devices and could be integrated with CarPlay, the interface that appears on supported car screens when connected to an iPhone, and Apple’s Siri digital assistant. It was also optimized for devices based on Amazon.com Inc.’s Alexa.

[Apple is developing original podcasts that tie into Apple TV+, Bloomberg News reported earlier this year. That comes as Spotify has quickly acquired a stockpile of podcasts, including the exclusive rights to a show from Joe Rogan, a comedian and popular TV host.

The deal for Scout FM is one of several Apple has made so far in 2020. It recently acquired payments company Mobeewave, weather app Dark Sky and virtual-reality content broadcasting company NextVR. Other purchases include Voysis, Xnor.ai and Inductiv to improve Siri and artificial intelligence, Fleetsmith for enterprise device management and VR software startup Spaces./quote]

[Dave]

How Apple cracked the world’s second-largest phone market

The Apple Store online is now open for business in India. This is a significant moment in Apple’s India journey… Apple had plans to set up a retail store in India nearly a decade ago, but its plans were thwarted by the Indian government. India has local sourcing norms that prevent brands from setting up stores unless they meet a quota, and Apple was ineligible because the iPhones it sold in India were imported from other countries.

Therefore, Apple had to rely on third-party sellers and big format stores to sell its products in India. But with Apple manufacturer Foxconn setting up a facility in India and kicking off local production of the iPhone 11 and the iPhone SE, Apple met the guidelines for setting up its online and retail stores…

Apple can sell its products to customers in India, but it becomes a moot point if its devices are too expensive for most potential buyers. That’s where the SE models come in… The iPhone SE 2020 and the Apple Watch SE significantly lower the barrier to entry into Apple’s ecosystem, and the positioning combined with financing options makes them enticing to customers in the country.

The final part of the puzzle is Apple One, the new subscription bundle that debuted earlier this month. Apple One in India starts at just ₹195 ($2.65) per month for individuals and ₹365 ($5) monthly for families… Apple One perfectly complements Apple’s device offerings in India. Most consumers in India are reticent to pay for digital content, but by positioning Apple One so aggressively, Apple has a good chance of convincing users to sign up for its service.

Apple is betting on two fronts in India: the affordable iPhone SE and Apple Watch SE make it easier than ever for consumers in the country to get their hands on a new Apple product, and Apple One is the perfect gateway into Apple’s broader services push. Combine the two offerings with an unmatched retail experience, and Apple is finally on track to gain some momentum in India.

My take: This piece was recommended by friend-of-the-blog Bart Yee, who wrote:



Good article describing Apple’s India strategy. What so many American based financial analysts don’t understand is the many options and services they say “meh” with the US market in mind may be much more attractive internationally, where Apple made 55% of revenues in 2019.

Check out the comments section:

Jerry Doyle said:
China & India essentially have the same population. China is an aging population with few young people. India has the youngest population of any country on the planet. Half a billion people in India are less than 25 years of age. These young western influenced youth are attracted to American brands, Levi loving, Coke consuming, Hollywood/Bollywood struck potential Apple consumers.
China & India cradle several countries, or sub-economies at different points in transition. As soon as the top 150-200 million Indians hit a Japan or Germany living standard, the growth impulse moves to another sub-economy mimicking a Brazil or Australia and finally down to the Bangladesh like sub-economy. As soon as one sub-economy becomes rich, the growth wave moves to the next-in-line poorer one. In the decades to come India will see serial transitions as one sub economy after another hits higher living standards, the same as happening in China.

[JDSoCal]

Good take from a channel I subscribe to, Garage Gym Reviews:

Is Apple Fitness+ The Future Of Home Gyms? (link fixed)

***

And a group of competitors ganging up against Apple? We used to call that a restraint of trade...

[Lstream]

Sept 25, 2020 6:36:52 GMT -8 JDSoCal said:

Good take from a channel I subscribe to, Garage Gym Reviews:

Is Apple Fitness+ The Future Of Home Gyms?

***

And a group of competitors ganging up against Apple? We used to call that a restraint of trade...

You must have a different kind of gym than the rest of us. I got the following intro from that link.

The U.S. Army M119A3 Howitzer is an artillery piece (105mm) that packs a deadly punch and be transported by smaller U.S. helicopters like the UH-60 Black Hawk. It provides very accurate fire support for ground troops with a maximum range of about 10-12 miles.

[JDSoCal]

Sept 25, 2020 6:41:18 GMT -8 Lstream said:

The U.S. Army M119A3 Howitzer is an artillery piece (105mm) that packs a deadly punch and be transported by smaller U.S. helicopters like the UH-60 Black Hawk. It provides very accurate fire support for ground troops with a maximum range of about 10-12 miles.

My bad, that's going to be mounted on my new Wrangler to clear out the looting and rioting savages in the streets.

Edit: Hope I don't tank AAPL with the car talk.

[chinacat]

Zolmax news has a panoply of price targets, all below the split price.  But it also includes...”In related news, CEO Timothy D. Cook sold 265,160 shares of the company’s stock in a transaction that occurred on Tuesday, August 25th. The stock was sold at an average price of $496.91, for a total value of $131,760,655.60.”  Makes one wonder how many shares he still owns, and the mind boggles at the possible net worth.  His timing was impeccable, though.

[archibaldtuttle]

A cluster of the moving averages around 111... today is very constructive for a bounce. Has to stay above 111 in the next few days.

[chinacat]

Patently Apple has Samsung Laughs at Apple, Launches a new Three-Device wireless charging pad that Apple failed to deliver.  Certainly one of most embarrassing failures of the Cook era; I wonder if the full story will ever come out.

[Dave]

Sept 25, 2020 14:07:07 GMT -8 chinacat said:

Patently Apple has Samsung Laughs at Apple, Launches a new Three-Device wireless charging pad that Apple failed to deliver.  Certainly one of most embarrassing failures of the Cook era; I wonder if the full story will ever come out.

Considering that BMW had wireless charging for the ignition key back in the late 1990’s and that my electric toothbrush has inductive charging, but Apple can’t quit make it work for the iPhone is a little curious. Just sayin.

[Lstream]

Got the Titanium Series 6 today. Solid step up from the Series 4. Really appreciate the always-on display. Blood oxygen level dropped to 2% when I had a look at the dungeon. Will continue to stay away, as I now have proof it is bad for my health.

[hyci004]

Sept 25, 2020 14:07:07 GMT -8 chinacat said:

Patently Apple has Samsung Laughs at Apple, Launches a new Three-Device wireless charging pad that Apple failed to deliver.  Certainly one of most embarrassing failures of the Cook era; I wonder if the full story will ever come out.

“Rather than allowing you to position your devices anywhere you like atop the Wireless Charger Trio’s surface, there are delineated positions for each to sit on.”

Apple could release something like that today if they wanted to. I’m sure they’re still working on the original concept. Apple shouldn’t have pre announced the AirPower before it was ready to ship. Lesson learned.

[Dave]

Morgan Stanley: Apple at $108 is a ‘compelling entry point’

From a note to clients that landed on my desktop Friday morning:

How are data points tracking ahead of the iPhone 12 launch? Apple shares are down ~20% from the early September market peak, underperforming the S&P 500 by 12 points. Investors are asking how to position ahead of Apple’s expected iPhone 12 launch next month based on recent data points.

Our view: We view the recent pullback and more cautious hedge fund positioning as providing a constructive set-up heading into the iPhone 12 launch especially given fundamental data points remain strong. Our checks suggest that Apple is taking share in Europe and China which is corroborated by strong iPhone 11 builds in the month of August . This week we’ve picked up additional positive data points that support our bullish outlook on Apple shares.

First, we continue to see the pace of Apple’s retail store reopenings accelerating… This brings Apple’s total open retail store count to 446 of 512 stores (87% of all stores), the highest since the end of C2Q20. Yesterday’s step function increase… is especially notable because the Americas region represents nearly 50% of Apple’s total revenue base, and with the iPhone 12 launch approaching, we believe it is critical that Apple has as many retail stores open as safely possible to support what we expect to be strong initial consumer demand for the new iPhone models.

Second, Apple supplier Jabil reported a strong earnings beat this morning (Apple represented 22% of JBL revenue in FY19)… During the earnings call, Jabil’s CFO Michael Dastoor noted that mobility was one of two drivers of DMS revenue upside in the August 2020 quarter, and that “the out of season launch (read: iPhone SE) continues to perform extremely well. In tandem with this, the upcoming next-generation launch, which will begin in Q4, is going extremely well.”

Lastly, we continue to see lead times extending for Apple’s Mac and Macbook lineup, which we believe points to strong demand, rather than a lack of supply, for Apple’s computer products… For reference, we forecast Mac revenue growth accelerating to 29% Y/Y in the September quarter, which we believe better aligns with the improving Mac data points and easier Y/Y compares.

Overweight rating and $130 price target unchanged.

My take: The last time I remember Huberty identifying an attractive entry point for Apple was January 25, 2019, when the stock was trading for $152.70 ($38.59 split-adjusted).

We had a good close Friday with good volume. Hopefully this will continue into Monday.