Horace Dediu

13 'Horace Dediu' stories June 2013 - August 2014

The $210B cash Apple would have by now without the dividend & share buyback schemes

Ben Lovejoy Aug 18 2014 - 6:05 am PT

aapl

Asymco’s Horace Dediu has been doing some number-crunching on AAPL’s cash stockpile, which sat at around $120B before the company began paying dividends and initiated a share buyback scheme two years ago. He calculates that, had nothing changed, Apple would now be sitting on around $210B in cash.

To put that into perspective, there are only about a dozen companies in the world Apple wouldn’t have been able to buy outright for that amount.

Despite the $53B spent on buying its own shares and the $21.5B paid out in dividends, the continuing flow of profits into the company means that Apple today still has about the same amount of cash it did two years ago. The share purchases themselves have proven a good deal for Apple as their value has increased.

Dediu also wryly comments on the ‘Apple is doomed’ sentiment voiced by some analysts based on ‘only’ linear growth, noting that while that “might be seen as evidence of failure, it’s more useful to treat this vast quantity as a recognition of past successes.”

On average, analysts expect iPad sales to be flat, but no consensus

Ben Lovejoy Jul 18 2014 - 6:10 am PT

8 Comments

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Someone once said that if you put three analysts in a room and ask them a question, you’ll get four different opinions. This certainly appears to be the case today, with Fortune finding no more consensus on iPad sales than it did on iPhone numbers.

Asked to predict how many iPad sales Apple will announce in next week’s Q3 earnings announcement, the overall average suggested year-on-year sales would be flat at 14.35M. However, no consensus view emerged …
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Market share of iPhone may increase as U.S. smartphone growth tails off, predicts analyst

Ben Lovejoy Jul 8 2014 - 5:22 am PT

3 Comments

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There are early signs that Apple’s market share of the U.S. smartphone market may increase as we move through the ‘Late Majority’ phase and into ‘Laggards’, suggests Asymco’s Horace Dediu.

For those who weren’t paying attention in economics classes in school, new products tend to experience an S-curve pattern to their growth. In the tech sector, Innovators are pretty much synonymous with techies.

Innovators (first 2.5%) need to be sold on the premise of novelty itself. Early adopters (next 13.5%) seek status and exclusivity. Early majority (34%) seek acceptance and Late Majority (34%) seek pragmatic productivity. Laggards (last 16%) seek safety.

If those percentages appear rather random, it’s because they are derived from the shape of the curve – the typical points at which it gets steeper or shallower.

With U.S. smartphone penetration now at 70 percent, we’re about two years into the Late Majority stage, with around two further years of growth to come. What Dediu’s analysis suggests is that iPhone growth has a steadier pattern to it than Android growth, which appears to be more closely driven by product launches and promotions. The more mature a market, the fewer product launches and promotions there are designed to drive adoption.

Why, when we are in a late stage of the market, does the iPhone do well when users are not incentivized to adopt? As we crossed 70% adoption, 1.4 million more users adopted the iPhone than Android.

Even if we look out to the last six months, iPhone added 15.5 million late majority users while Android added 14.2 million. If promotions decrease for the “late late majority” and laggards then would the iPhone do even better relative to Android?

Dediu points to the featurephone market as support for his hypothesis: at the tail-end of the curve, before smartphones took over, the most popular phone in the U.S. was the RAZR – a premium handset.

Analysts predicting Apple will beat its Q3 guidance of $36-38B

Ben Lovejoy Jul 7 2014 - 4:46 am PT

6 Comments

IFC Hong Kong Apple store facade

Yep, it’s that time of the quarter again, when we start hearing analyst predictions for Apple’s quarterly earnings. Asymco analyst Horace Dediu has just tweeted his, forecasting that Apple will hit $38.62B revenue, above the company’s guidance of $36-38M. Wells Fargo’s Maynard Um recently predicted $38.2B …
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Declining iTunes sales underline need for Apple to launch a subscription music service

Ben Lovejoy May 28 2014 - 6:36 am PT

16 Comments

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Declining iTunes sales highlighted by Morgan Stanley’s Katy Huberty and reported by Fortune appear to underline the need for Apple to move beyond sales of music downloads and into the subscription music business. iTunes sales are down 24 percent year-on-year.

While the slack is being picked up by app sales – a trend previously noted by Asymco’s Horace Dediu – that falling blue line reflects the wider shift in consumer behaviour from purchasing downloads to subscribing to streaming services noted last year by Billboard magazine …
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Analyst forecasts suggest iPad sales have peaked, expect YOY decline this quarter despite 13% holiday growth

Benjamin Mayo Apr 18 2014 - 5:25 am PT

11 Comments

As highlighted by Fortune, analysts’ consensus on iPad sales for last quarter suggest that iPad sales will actually decline year-over-year by about 0.7%. Although the expected decline is small, this would represent a big shift in iPad momentum, especially since Apple saw a strong increase in sales for the holiday quarter, going from 22.9M units in the previous year to 26M this year.

If iPad sales have fallen, it wouldn’t be because of different market conditions to last year. Apple introduced the iPad Air at the end of 2014 around a year from the introduction of the iPad 4 at the end of 2012. Last year, Apple dropped the price of the iPad Mini a modest $30 while also introducing the highly anticipated retina iPad Mini. In 2012, it introduced the iPad mini. The product cycles are similar, so the decline isn’t due to any artificial inflation of sales last year.

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PC Market exodus continues as LG considers quitting, Mac prices & margins leave Apple almost immune

Ben Lovejoy Feb 6 2014 - 7:32 am PT

26 Comments

ultrabook

PC manufacturers seem to be dropping like flies at present. Shortly after Sony confirmed it was selling its PC business and Vaio brand, LG is rumored to be planning its own exit from traditional PCs, to focus on smartphones, tablets and ‘convertible’ PCs (touchscreen Windows tablets that flip round into a laptop).

Other manufacturers are witnessing falling sales, prices and profits – with The Guardian calculating that the average profit per PC in the third quarter of 2013 fell to just £14.87 ($24.09). One manufacturer of conventional-format PCs, however, has remained almost immune to the trend: Apple …
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AAPL returns to growth, predict analysts, as we await quarterly earnings call

Ben Lovejoy Jan 27 2014 - 5:29 am PT

1 Comment

aapl

When Apple reports its quarterly earnings later today, the news will be good, according to the consensus view of 47 Apple analysts compiled by Fortune.

Analysts are expecting the company to report earnings of $58.1B for the final quarter of last year (Apple’s fiscal quarter 1), representing 4 percent earnings growth over the same quarter last year. This would be right at the top end of Apple’s guidance of $55-58B, and the first time in a year that Apple would have reported year-on-year growth …
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Total Apple device sales will equal Windows PCs this year, predicts analyst

Ben Lovejoy Jan 14 2014 - 5:40 am PT

13 Comments

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The total number of Apple devices sold will equal the number of Windows PCs by some point this year, predicts Asymco’s Horace Dediu in an interesting piece of analysis.

The dark shaded area compares all Apple hardware – Mac plus iPad plus iPhone – with Windows PCs, and shows that by last year there were only 1.18 more Windows PCs than Apple devices. It’s of course a somewhat artificial comparison, as Dediu is including iPhones while excluding Windows Phones and tablets, but given the very limited success of Windows mobile devices to date, correcting that wouldn’t change the patterns too much.

What’s particularly interesting here, as John Gruber notes, is that the dramatic reversal kicked in well before the launch of the iPhone. Dediu and Gruber between them put forward a number of theories for this, and of these I think three are likely key …

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Apps, rather than streaming music, may be responsible for ‘peak iTunes’ – analyst

Ben Lovejoy Jan 8 2014 - 5:51 am PT

11 Comments

We noted at the end of last year that iTunes music downloads appeared to be on the decline for the first time, a shift that was confirmed this month. The operating assumption has so far been that music streaming services are taking over, and that a growing number of consumers are now content to simply have on-demand access to music, rather than to own it.

Asymco’s Horace Dediu, an analyst who often has interesting things to say, has suggested an alternative explanation: that we’re actually listening to less music …
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Two-thirds of Americans will own an iPhone by 2017, calculates analyst

Ben Lovejoy Dec 16 2013 - 5:07 am PT

10 Comments

Smartphones will reach saturation point in the U.S. by 2017, and by that time two-thirds of all Americans will own an iPhone – the conclusions Asymco’s Horace Dediu reaches through a series of calculations.

Dediu bases his calculation on three factors. First, that the rate of growth seen in the smartphone market so far will continue at the same pace. Second, saturation point for smartphones will be 90 percent (no technology ever achieves 100 percent). Third, that Apple’s market share will remain roughly constant, Dediu pointing out that iPhone growth has pretty much exactly mirrored the smartphone market as a whole …
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Apple Store visits continue to climb, though growth flattening

Ben Lovejoy Oct 31 2013 - 5:27 am PT

5 Comments

Asymco’s Horace Dediu has put together a couple of charts showing that while the number of visitors to Apple’s retail stores continues to climb, the rate of growth is flattening off.

The underlying reason appears to be a slow-down in the rate at which Apple is opening new stores, as the average number of visitors per store has remained stable for the past three years …
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Apple adds around a million new store accounts (most with credit cards) every two days

Jordan Kahn Jun 13 2013 - 9:25 am PT

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Asymco’s Horace Dediu points out with the graph above that Apple has been adding about a million new store accounts every couple of days. The numbers seem to be based on Tim Cook’s announcement at WWDC that Apple now has 575,000,000 million store accounts (which we assume includes all App Store, iTunes, and Apple Online Store accounts). That means most of them have credit cards on file and as Cook noted, that’s “more accounts with credit cards than any other store on the internet.”