A hard look at services, as a new Apple emerges

Apple cancels AirPower, apologizes for the MacBook keyboards and looks to WWDC

Greetings! Coming right up, the most interesting stuff about Apple in the past week. — Please forward this email to anyone you think might find it interesting.


Apple unveiled its wider services strategy with games, news and magazines, movies and TV shows and its own credit card. Most of which (or many of their features) will be US-only for a while.


Apple has 170 million iCloud paid subscribers according to the always interesting Turley Muller. His estimates suggest a $2 ARPU, with most paid accounts going for the cheaper tier, and a 12% penetration, given 1.400 million active Apple devices.


Apple loses key semiconductor engineer who oversaw processors from A7 to the current A12X. Gerard Williams III, senior director in platform architecture, departed Apple last month after nine years.


Apple apologizes for its unreliable keyboards in a statement to the press, after the 3rd generation of the "Butterfly" design still didn't work properly. Apple has been directed customers to a repair program for a while. 

A few observations: 

  • This superb piece by Joanna Stern was the straw that broke the camel's back. John Gruber calling them "the worst products in Apple history" had to hurt across all the corner offices in Apple Park.

  • This was the right move... back in 2016. Apple is stubborn and its customers lost confidence. A new generation of Intel chips for laptops is near, so customers could get a two for one soon: new keyboards and new chips.


Apple cancelled the AirPower charging mat in a surprising decision after 18 months of teasing the product. Its engineers couldn't make it work. How many engineer-hours were spent on it, nobody will know.

A few observations:

  • It was 100% a rushed decision. A late night change of heart by Cook and/or Riccio. 

  • The move came one day after Apple's statement about MacBook keyboards. Those two decisions are clearly linked.

  • Apple shouldn't have announced a product many engineers told it couldn't be pulled off

  • There are probably dozens of "AirPower-like" projects in Apple that never see the light of day. It's better that way.


The iPhone outperformed in the US growing 1% in January from a year before, while the market declined 2.7%. — Important tidbit: "Its sales mix shifted towards the iPhone XR"

Which gives me an opportunity to show you the updated iPhone-vs-Market performance chart with new regions: Australia & EMEA.


The new AirPods are here with native support for Hey Siri, a better chip and faster connections. Apple offers an optional wireless charging case for $50 more.


Apple hires Tesla's ex-head of electric powertrain that left the company a month ago. The move was a big blow for Tesla and a big win for the Project Titan, which we still know almost nothing about. 


More from the orchard


Competitors

  • Smartphone ASP grew by 11% in 2018, a new record driven by Huawei (27%!) and Apple (11%).

  • Smart speakers shipments will hit 144 million units this year according to IDC. That's almost a 50% increase from 2018.

  • Tencent Music announced it now has 27 million paying customers across all its services. Up from 22 million a year ago.

  • Samsung Electronics warns of a profit miss "due to falls in chip prices and slowing demand for display panels". Worrisome for Apple too.

  • China manufacturing PMI is growing again.

  • Valve teases its own VR headset, named "Index" that will announce in May.

  • Huawei launched its P30 Pro with superb cameras and still unimpressive software. 


Thank you for reading Apple Weekly. Please consider forwarding this email to your contacts. — Alex