Apple's latest products are 'bending the power performance curve’: Analyst
R "Ray" Wang, Constellation Research Principal Analyst & Founder, joins Yahoo Finance to discuss the latest product releases from Apple ahead of the holiday season.
Video transcript
- And joining us now for more analysis is Ray Wong, Constellation Research principal analyst and founder. Thank you so much for being here, Ray. What stands out to you about all these products, and do they live up to the hype?
RAY WONG: I'm just impressed, right? I mean, we're breaking Moore's law. We're bending the power-performance curve that's actually been going on in computing for some time. And if you see what's going on here, I mean, short of mining Bitcoin on these machines, I mean, the M1 chips are pretty much, you know, performing, and people are going to put them to the test, right? A lot of it's the AI, the ML on the back end and what people are really excited.
So I think it was the MacBook Pro, of course, stole the show, but you can't do it without the M1 chips. And I think what people were excited about is the 1080 camera, finally, a better camera on the MacBooks, better mini-LED display. And, of course, the MagSafe is back and an SSD card, which is what people have been looking for. For folks who like the touch bar, the OLED bar, that's gone. It's now back to function keys, and I think that's going to be interesting.
But from a financial perspective, right, Macs are 10% of Apple's revenue, right? We're talking about $8 billion that grew 16% year over year last quarter. And this is going to be in the refresh cycle. We think somewhere between 20%-- up to 20% to 29% of MacBook Pro owners are going to be in the middle of a refresh, and there's a lot of reason to do that refresh.
ALEXIS CHRISTOFOROUS: Do you think, though, there's going to be a game changer? I mean, did you hear anything today, Ray, from Apple that makes you think, you know what? They're really going to be a contender here this holiday season.
RAY WONG: Oh, I really like the HomePods. And HomePods Mini at $99 and the way they're integrated with Siri, the touch-- it's a lot of the home automation people have dreamed of. And being able to tie it back to what's going on with Siri, what's going on with the Apple devices, I think that's going to be a surprise sleeper. It might be the stocking stuffer for the year.
And the other thing that was interesting was really what you're seeing with the AirPods, as people were talking about. I think the whole complete lineup of AirPods now has that thing in the middle, which is the AirPods 3, which is important. That spatial audio, it makes a big difference. For those who had a chance to look at Dolby Atmos and get the feel for spatial audio and being able to see everything in 3D, it's a different kind of experience. And of course, I mean, the MacBook Pros are enough for an upgrade.
- And, Ray, tell me, you know, so many of these gadgets, they're really wonderful. How many of them will actually end up under the tree? Because we're already hearing about supply-chain issues, right? We heard that Apple would be slowing its production of iPhones. The lines are incredible. The wait times are incredible. They're going through January. So how many of these items do we actually see showing up for the holidays, do you think?
RAY WONG: From what we understand, these items are available. If you order today, they'll be available next week in stores. So we'll have to see how the supply chain and the demands get matched. As you know, the chips for the M1s are coming from TSMC. So I think they've had-- you know, they've been able to get these done and produce that on priority.
But, you know, for the other objects like for the AirPods, for, you know, the HomePods, I think they've been in good supply. So we'll see what happens. We'll see what the order lines look like. But yes, the iPhones have been slowed down as much as three to four weeks from what I can hear.
ALEXIS CHRISTOFOROUS: And I would like your take on this Apple Music Voice Plan, $4.99 a month. Yet another thing we have to shell out for at the end of the month. We don't realize we need these things until Apple, I guess, tells us we do. But what do you make of this offering, and is this really going to incentivize people to sign up?
RAY WONG: I think so. I think a lot of people-- I mean, we don't go out and buy-- I mean, we're dating ourselves. Like, people don't go out and buy CDs anymore or, you know, go out and download MP3s the way people used to.
And so subscription services have pretty much been the norm, and a price point of about $60 a year is simple. And the family plans that are also being announced as well I think make it a lot easier for folks to-- you know, it's a simple gift for someone, or it's something for people that like to have music everywhere. And plus if you've got the HomePods running and if you've got, you know, your-- if you've got the HomePods running and if you've got a brand-new MacBook with, you know, six-speaker audio, you know, you're definitely going to take advantage of that.
- And, Ray, I believe Google and Samsung are also coming out with product launches later on this week. How do they all stack up to each other? Does Apple by far and away lead the game here, or are other technologies from these other players also in the mix?
RAY WONG: We're definitely in a competitive market. You know, Apple definitely has the leads on phones. They're trying to get into the home market. Google and Amazon have done a good job getting, you know, their devices and their speakers and their smart speakers into a home market. So I think it's highly competitive.
Most of it really comes back to operating system. You're either on iOS and you love it and you want it fully integrated inside your home, inside your car, you know, at work, or you're going to go down the Google route and take all the Google features along the way. And then, of course, Amazon's got a great presence. So you're just going to see those three, you know, go after each other pretty hard. So Samsung being part of the Google ecosystem and Harman being a Samsung company, I mean, they're definitely looking at, you know, different ways to actually penetrate the home market as well.
So it's highly competitive. And I think it's for the same reasons, you know, people really like, you know, their Android OS versus their iOS versus what's going on in Amazon. I mean, it's all in preference. So it's content. It's preference, ease of use, and, of course, the coolness of the device.
ALEXIS CHRISTOFOROUS: We do know, though, by Apple's own admission that it has been impacted by the computer-chip shortage. And, in fact, it had to cut production of the iPhone 13. Do you think that that's going to cause problems here when people try to get the phone for the holidays?
RAY WONG: I think so if there's the demand. I mean, this is the supercycle. We expect 249 million phones in the supercycle. And, you know, the chip shortage is definitely going to hurt.
We see a lot of companies like Apple-- I'm not sure if Apple is doing this-- charter their own cargo, charter their own planes now to be able to get the chips in place. It's not just the chip-- a supply issue. It's also the supply chain on the back end. Parts aren't getting delivered, and that overall supply-chain disruption is everywhere.
- All right, Ray Wong, we will have to leave it there, Constellation Research principal analyst and founder. Thank you so much for your time.
