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Tag: Apple

Apple: A Services Company

Published May 1, 2020 by Senthil

Even in this uncertain climate, some supply chains are doing well. Apple going by their 2020 Q1 reports has got some positive news to share. I wrote last year on the blog, while discussing Peak iPhone, that iPhone as a product is maturing and argued that, Apple will soon pivot to become a services company. More evidence is now in.

I revisit the thesis in this post. Apple earned a record $12.7 billion in services revenue during the first quarter of its fiscal year — a year-over-year increase of roughly 17%, growing faster than the rest. Add to this information, the margins are higher than every segment, with margins exceeding 65% in services — Apple will increasingly focus on services going forward.

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Tesla Scales Back

Published March 8, 2019 by Senthil

A post about Tesla’s decision to cut more than 3,000 jobs and scale back on showrooms. Tesla needs showrooms, but not for the often-quoted reason. I argue that after this decision, Tesla should focus on its most-valued customers by improving on their product service bundle.

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Peak iPhone

Published January 17, 2019 by Senthil

I look at data behind iPhone unit sales, and see versioning issues of a durable-goods monopolist rather than trade uncertainties. Using Clockspeed theory, I argue that iPhone pricing and versioning advantage was temporary. The advantage was great when it lasted, but it is now behind Apple, as the smartphone market matures.

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Spectacles: The Landscape has Changed

Published October 24, 2018 by Senthil

Spectacles are back again. Earlier this year on this blog, I wrote about Snap’s disastrous over-commitment into Spectacles inventories, and subsequent difficulties in selling the items, as thousands of inventories piled up.   I argued that their sales figures were in fact not terrible in comparison to the first generation iPods, but it was the capital expenditure on inventories that crippled Snap’s venture into hardware. So, after Snap is back again with Spectacles 2.  I cannot really figure that if the new designs of Version 2 are any better, but Snap definitely seems to be making some better operations and retail decisions. Here is coverage from Verge: Both the Veronica and Nico styles are available starting today (ed: Sept 5,…

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