Even before Apple Inc. (NASDAQ: AAPL) introduced its updated iMacs last month, the all-in-one computer was on its way to being the industry’s best seller in the March quarter. This year’s anticipated chip shortage is expected to enable Apple to leap over HP as the largest seller of all-in-one computers.
Citing a report in tech industry news site Digitimes, MacRumors notes “evidence suggesting that more affordable all-in-one PC brands are being impacted much harder by the global chip shortage as suppliers prioritize their shipments to support more premium [all-in-one] products.” High-end devices like the iMac, which sells for $1,299 to $1,699, “are only seeing limited impact from component shortages.”
Digitimes also reports that HP sold 925,000 all-in-one computers in the fourth quarter of 2020, while Apple sold 860,000 and Lenovo sold 731,000. Apple has said it expects chip shortages to nick about $3 billion to $4 billion off June quarter revenue.
MacRumors also is reporting a rumored launch of a new high-fidelity version of Apple Music and a third-generation version of the company’s popular AirPods. The HiFi Apple Music will be available at the same $9.99 monthly price and could steal a march on Spotify, which is expected to release its own high-fidelity upgrade in the fall. It is unclear whether Spotify will charge more for the upgrade.
Is Apple reaping the rewards for developing its own silicon, the now-famous M1? If so, it would probably show up in the company’s reported gross margins. The Digits to Dollars blog ran the math and concluded that switching to M1 in the MacBook probably worked out to around $300 million in gross margin improvement.
That represents about 0.3% of Apple’s March quarter revenue of nearly $90 billion. Digits to Dollars points out that the primary benefit of the M1 chip is that it helps Apple sell more MacBooks, and soon iMacs and iPads as well: “Saving $75 on a $2000 laptop is nice, but selling one more $2,000 laptop because of the silicon is much better.”
Apple shares dipped by about 3.5% on Tuesday as the tech sector dropped by almost 1.9% following Treasury Secretary Janet Yellen’s comments on the possibility that the Federal Reserve might have to raise interest rates. Yellen walked back her original comments, but not until markets had closed for the day. In premarket trading Thursday morning, Apple stock was up less than 1%.
The Nasdaq Composite index fell by virtually the same amount as Apple. The Dow Jones industrials, however, closed essentially flat on the day even though its largest component dropped by 3.5%. As Barron’s points out:
One of the main reasons the Dow didn’t fall tremendously was because the index is mostly tilted towards value companies, the shares of which didn’t suffer significantly. In fact, 14 of the 30 stocks on the Dow rose, showing there were plenty of strong performers on the index.
Finally, the second day of the antitrust case filed against Apple by Epic Games saw the judge in the case, Yvonne Gonzalez Rogers of the federal District Court for the Northern District of California, ask some pointed questions of Epic CEO Tim Sweeney. In particular, she quizzed Sweeney about how much he knew about the economics of non-gaming apps.
When he said he did not, Gonzalez Rogers commented, “So you don’t have any idea how what you are asking for would impact any of the developers who engage in those other categories of apps, is that right?” Ouch.