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Apple’s M1 chip is ‘where everything is going for the company’: Analyst

Daniel Newman, Futurum Research Principal Analyst, joins Yahoo Finance’s Alexis Christoforous and Kristin Myers to discuss Apple’s ‘Spring Loaded’ event.

Video transcript

ALEXIS CHRISTOFOROUS: Apple just held its first product launch event of the year. And it didn't disappoint. It announced a new colorful iMac, an updated iPad Pro with 5G, and a thin M1 chip. It also came out with AirTags, which are lost device tracking gadgets, and a refreshed Apple TV with a brand new remote. Here to break it down for us is Daniel Newman, principal analyst at Futurum Research. So Dan, you watched that Apple event. Was there anything there in particular that got you really excited?

DANIEL NEWMAN: I think all of us went into the event really excited and anticipating the iPad launch. That was kind of what everybody knew about. And of course, we're excited to see the continued expansion of the ecosystem to the M1. And that was exactly what was delivered. So was it surprising? Not entirely. Does the new offer look really good and compelling? Yes, it does. And it's really interesting because, you know, we saw Apple focus on a whole bunch of other stuff, though, that captured my attention, too.

And you can just see the diversification. They touched on ESG and sustainability straight away by talking about the company's plans for carbon neutrality early on. And then you saw they dove in and expanding the credit card offering and making it more valuable for families and the application and the tools to expand its usability and democratize credit. And then these new tiles that they are coming out with-- and I'm using the term tile because it's Apple's version, the AirTag-- is going to probably disrupt that space in a lot of great ways.

So, you know, they hit a lot of different angles. And of course, it was all encapsulated at the end by this really exciting new iPad and these colorful iMacs, which really had a 90's feel to me. It really brought me back to those big colorful cubes that came out in the '90s in the early days of the iMac.

KRISTIN MYERS: Now, typically, we like to watch, and I think a lot of the anticipation usually comes around Apple's fall event. But of course, the pandemic cancelled last year's spring event. How much do you think that the pandemic has really contributed to a lot of the hype or excitement around Apple's event this year and some of the products that we're going to be getting?

DANIEL NEWMAN: Yeah, I think after the year that all of us have dealt with, I think everyone's excited and just a little bit inspired for new products, new technologies. We had the stimulus come into play. And I think some people are probably going to be spending their stimulus check to go out and get one of these new iPads or a purple iPhone. And I think people are anticipating always these new products, these new offerings from Apple.

I think the big thing, like I said, from the overall for the investor community to really glom onto, though, is this M1 evolution, though. So we heard about it when the company came out with the M1 Macs. And you're starting to see that now expand. Everyone kind of wondered what's going to happen to the iMac. Well, we've got an answer now. It's thinner, it's lighter. It looks very nice. It's colorful. But it's that continuation of that M1 ecosystem. We're seeing the same thing now going into the iPad.

This is really going to be about continuity. It's going to be about creating consistency across the experience. And Apple is really leaning into this M1. It gives them more scalability. And of course, we've talked a ton. And I've been on here earlier to talk about the chip shortage. Well, creating and streamlining the delivery and building this profile around this ARM-based variant, Apple's got a great relationship with TSM for their 5 nanometer process. And this is just going to continue to expand the amount of demand and the amount of fulfillment that's going to run through Apple from TSM.

So, it was a very diverse launch, it covered a lot of ground. But I think for the people looking on and saying, what's next for Apple, I think this M1 ecosystem, they're fully leaned in. And this is where everything is going for the company. It will be this M1 and these next generation of ARM-based chips it's building.

ALEXIS CHRISTOFOROUS: And then, before we let you go, what was your take on the Apple Podcast announcement that now they're going to come out with this subscription model? You know, we were talking earlier with our tech editor Dan Howley about how they're called podcasts because they came from Apple and the iPod. But they never really monetized podcasts. They sort of saw Spotify and others do that. What do you think about this latest push? And is it going to be successful as they try to play catch-up in that area?

DANIEL NEWMAN: Yeah, that's a great point, Alexis. They are certainly playing catch-up. But we've seen with TV, with gaming, Apple has a services route that it is committed to. Will it be a huge win straight away? I think it will take time to develop the ecosystem around the podcast. But I also do believe that Apple knows. You're seeing some decline in the volume of iPhone purchases. You're seeing a more competitive space around laptops that Apple has never really had a large share around, but has always been highly profitable.

But what Apple has really leaned into are these expansive and extensible service offerings-- TV, movies, gaming, news. Podcasts was a logical progression. I expect the company will get behind it. They'll make it highly available to the ecosystem. And the adoption will come, but the competition will certainly be there. All these services, Apple has been a fast follower. And so far, it looks so good. But like I said, I expect competition to be strong in the coming quarters.

ALEXIS CHRISTOFOROUS: You can bet on that. Dan Newman of Futurum Research, thanks so much.