Saturday, October 31, 2020

Apple -- October 31, 2020

In a long note like this there will be content and typographical errors. 

Disclaimer: along with the Bakken, I am inappropriately exuberant about Apple. This has nothing to do with investing in AAPL. This is simply about Apple, the company and their products. 

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here. 

So, let's start here:

In the graphic above, note the delta between the end of the 4th quarter (the September-ending quarter) and the 1st quarter (the December-ending quarter). Some are predicting that 2020 - 2021 will be similar to the 2014 - 2015 experience based on iPhone 12 sales. The question is whether the 1Q21 spike will be significantly greater than a year earlier or if Apple revenue has plateaued.

From the graph:

  • 4Q14: $40 billion; 1Q15: $75 billion or an increase of 87.5%.
  • 4Q20 = $64 billion. 1.875 x $64 = $120 billion.
  • 4Q20 = $64 billion. To get to $100 billion, that would be a 56% jump.

Folks like me, Tim Cook, and others can rave about record iMac and MacBook revenue, services revenue, and wearables revenue but the fact remains: APPL's share price "depends" on iPhone sales in the December-ending quarter.

Some suggest that iPhone 12 will be the most successful phone since iPhone 6, released in September, 2014. From wiki:

Apple Inc. announced that, within 24 hours of availability, over 4 million pre-orders of the iPhone 6 and 6 Plus were made, exceeding the supply available—an Apple record. 
Ten million iPhone 6 and iPhone 6 Plus devices were sold in the first three days, marking another Apple record. 
Apple iPhone 6S & 6S Plus were introduced in September 2015 selling 13 million units which set the record for sales in the first three days from last years release. 
Three months after its release, the iPhone 6 generated 71.5 million unit sales. 
During their lifetime, the iPhone 6 and iPhone 6 Plus sold a total of more than 220 million, making them the best selling iPhone models and one of the best selling mobile phones of all time. 
The exact total sales of the iPhone 6 are unknown, but it's estimated that roughly 222.4 million units of the iPhone 6 have been sold as of June 2017.

The iPhone SE was released in 2016. I have the iPhone SE and I bet I'm one of many.

Fast forward to September / October, 2020. Apple announces iPhone 12 series -- there will be four versions. Two were released at about the same time as they were announced; due to anticipated demand, the other two versions were delayed until adequate numbers could be put into the supply chain for the anticipated demand. 

The four versions (starting at):

  • iPhone 12 ($799) -- 6.1-inch display -- available for ordering at time of announcement
  • iPhone 12 Pro ($999) -- 6.1-inch display -- available for ordering at time of announcement
  • iPhone 12 Pro Max ($1099) -- 6.7-inch display -- pre-order November 6, 2020 -- note: pre-order, not delivery date or availability
  • iPhone 12 Mini ($699) -- 5.4-inch display -- pre-order November 6, 2020 -- note: pre-order, not delivery date or availability

Logistics, link here.

Several of Apple's ‌iPhone 12‌ and 12 Pro models sold out within a few hours of launch, and many new orders are now shipping out later in November
We can likely expect to see similar constraints for the upcoming iPhone 12 Pro Max and 12 mini, as these devices were held back due to rumored production issues that required Apple to wait to build up enough supply. 
Given the situation with ‌iPhone 12‌ and 12 Pro pre-orders, those planning to purchase a 12 mini or 12 Pro Max should plan to do so right when pre-orders go live on Friday, November 6 at 5:00 a.m. Pacific Time.

Pricing, link here

Size matters. I love these "price points." Seriously, even without knowing the difference between the "Pro" and the "Pro Max" wouldn't you spring for the "Pro Max" at only $5 extra per month? I guess it simply comes down to whether you want the 6.1-inch display or the 6.7-inch display. The buzz: folks "loooove" the larger display. 

And "everybody" has a trade-in.


On a completely different note, we now turn our attention to the iMac -- the desktop that was supposed to have died years ago. Link here

The desktop iMac comes in two versions, the 21-inch and the 27-inch. The latter is new and the size I've been waiting for, for the past several years.

 The 27-inch comes in three models: $1799; $1999, and $2299. 

The $1999- model appears readily available but the $1799 is a bit delayed and not available at our local Apple store. Meanwhile, the $2299-model is even a bit more delayed than the $1799-model. Recession? What recession?

I bought the $1799 model at Costco last week: it was on sale, $100 off. Costco limited sales to two per customer. No waiting. Same day. Walked in. Walked out. Fifteen minutes tops.

The desktops are being used for telemedicine, distance learning, etc. If your employer is springing for it, buy the $2299-model -- that helps explain the relative supply shortage there.

From social media:  

  • Yeh - .... Just ordered 27" iMac - 3-4 weeks delivery. New Zealand.
  • My 2020 iMac was supposed to be 3 weeks but arrived after 1 week.  

Most folks can understand "everything" Apple being delayed but not the desktop, but there it is. Delayed by several weeks.  

I have been waiting for the larger iMac for years but a) did not need it; and, b) had no place to put it in our small apartment. But now that we have converted our dining room to a distance-learning room for Sophia, a) we had a reason to get it; and, b) we had a place to put it.  

Spectrum cable is expensive, but all of a sudden we're getting much more value for our buck.

Other Items Of Interest

Apple's Form 10-K also revealed the following details:

  • As of September 26, 2020, Apple had approximately 147,000 full-time equivalent employees, an increase of 10,000 employees from one year prior.
  • Apple spent $18.75 billion on research and development in the 2020 fiscal year, up approximately 16 percent from $16.21 billion in the 2019 fiscal year. Apple said this increase was primarily due to "headcount-related expenses."
  • Apple spent $2.95 billion on warranty claims in the 2020 fiscal year, down approximately 23 percent from $3.85 billion in the 2019 fiscal year. [Not said, but probably related to the keyboard.]
  • Amid mounting scrutiny over its App Store practices, Apple acknowledged that if the commission it collects on certain purchases were to decline, the company's financial results could be "materially adversely affect."

Sean Connery RIP

North Dakota Could Reach Herd Immunity Sooner Than The Rest Of The Country -- October 31, 2020

Link here

New cases per 100,000: North Dakota running about 2x what is going on in the rest of the country. North Dakota could reach herd immunity before the rest of the nation. It pretty much depends on Medora.

Pancake Preparation For Sophia

Annual Permits In North Dakota Since 2011; On Pace For Lowest Year Ever -- October 31, 2020


  • 2020, October 31: 645 permits; at this pace: day 305 in a leap year (366 days): 774 permits
  • 2019, projected for the year (as of June 21, 2019) --- 1,523; in fact, actual: 1,397
  • 2018: 1,466
  • 2017: 1,189
  • 2016: 818
  • 2015: 2,055
  • 2014: 3,012
  • 2013: 2,671
  • 2012: 2,522
  • 2011:1,916 

2020: 74 permits in October;

  • at that pace: 2.3870977 permits per day
  • 2.3870977 x 366 = 873 which would be slightly better than the 818 in 2016

Stories Being Followed -- October 31, 2020

So that I don't forget, these are the stories or data points I'm most interested in now:

  • who owns the Permian? The majors or the independents?
  • COP -- there appears to be a huge shift in strategy
    • what next in the Bakken? 
    • monster wells in the Bakken
  • the dashboards: Bakken, Eagle Ford, Permian
  • the Mideast: in deep doo-doo
  • Apple
  • Turkey -- separate from the Mideast
    • like Fitzgerald said: "within and without"
  • investing: the strange case for/of dividends
  • cooking for one: heat is heat
  • Alaska: killing the golden goose; we will know this week
  • ILI surveillance

Another Apple

I won't be able to find it but I once posted that the drummer is the most important individual in a rock band. First among equals.

Apple -- Nothing About The Bakken -- October 31, 2020

I will come back to this later today. This is a big story. A lot of data points. 

I have to re-test for Covid-19. I wasn't sure I was able to smell my Bloody Mary earlier this morning, but now I'm smelling bacon cooking in the kitchen.

From 1990

Happy Halloween -- North Dakota Chinese Flu Update -- The Bismarck Tribune -- October 31, 2020


Later, 3:18 p.m. CDT: a reader was kind enough to send me the link ... see first comment at this post --

Medora... population 112 and potentially about to be decimated, according to this article!

It was such a ridiculous story I had to have at least two readers interested in it before I would post it. LOL.  Fortunately, a second reader was kind enough to oblige. LOL. I just love this blog -- LOL. I never know what I'm going to find on it. This made my day.

Original Post

I didn't post the link, and I won't unless a reader sends to me again, but yesterday, the national media posted a story on the devastating effect Covid-19 is having on Medora, ND. I can't make this stuff up. Don't they close down the city nine months out of the year?

This, too, will pass -- when we reach herd immunity ...

Oh, my goodness, I bet they weren't wearing masks, 

The lede:

The question everyone is asking: is it safe to go swimming?

Link to the Bismarck Tribune

The good news: the WHO anticipates zero "seasonal flu" cases this year. That disease appears to have been eradicated. Just like that. 

Tracking "influenza-like-illnesses" in the USA today -- traditionally tracked by the CDC and reported weekly in MMWR will be very, very interesting this year. 

"Influenza-like-illnesses" (ILI) will include both Chinese flu and "seasonal flu" this year. Then, look at this:

Why is the CDC recommending the flu vaccine -- it's only 45% effective, at best -- and "the mask" seems to be the easier, better alternative based on what is being reported by mainstream media and Joe Biden. Just saying.  By they way, speaking of Joe Biden, I haven't seen him getting his "seasonal flu" shot, but I see him every day, with Jill, wearing his mask.

Quick: what virus is being targeted this year for "seasonal flu"? Yes, that's what I thought. 

This will be re-posted later.

Off the net for awhile.

I'm going to go get tested. I feel great but one can't be too careful these days. You know, had this been last year, Trevor Lawrence would have played right through this with his mild symptoms. And no one would have even noticed.

I'm Back

More graphics.

Is the world going nuts? Is it just me, or ... can you imagine --- using an analogy --- drilling 25,000 oil wells and only ten of them actually produce oil ....

Now, back to that question I asked earlier:

Heaven forbid you get the Yamagata strain. That vaccine won't do you any good. The good news? You are unlikely to get the Colorado strain. Okay to go skiing again. 

Notes From All Over -- The Mideast Edition -- Saturday Morning -- October 31, 2020

Striking graphs this morning. Where do we begin? 

Saudi Arabia's foreign exchange reserves: drop again. I believe this converts to about $453 billion.

From al Khaleej Today:

US crude oil imports from Saudi Arabia: huge plunge, not since the 1980s have we seen numbers this low. 

From the "milliondollarway" archives:

This might be good time to re-read this interesting story in Foreign Policy, May 5, 2020; still not behind a paywall; the writer of that article: Jason Bordoff, a former senior director on the staff of the US National Security Council and special assistant to President Barack Obama ... I first linked this article in September, 2020. It will be interesting to see how this plays out. 

Most Under-Reported International Story: Turkey

Turkish lira hits yet another record low, pushing as 8 lira to the dollar -- CNBC;

  • The lira’s value has fallen by nearly 20% year-to-date and halved since the end of 2017. 
  • At the start of 2018, a dollar bought just 3.77 lira; now analysts predict that figure will hit 8.5 or even 9. 
  • Erdogan has previously defended his economic record and in September called interest rates the “tools of his enemies.” 
  • Over the summer he downplayed the lira’s slide, calling it “temporary.” 
  •  Erdogan on Monday urged Turks to boycott French goods after the country projected satirical cartoons of the Prophet Muhammad on government buildings in Paris to protest a recent terrorist attack.

Earlier in October, again CNBC: the Turkish lira is getting smoked; will crash to new lows;

  • Turkey’s embattled currency hit another record low on Thursday, touching 7.95 to the dollar as it barrels toward an unprecedented 8 lira to the greenback.
  • Economic analysts have expressed exasperation for the past several weeks at the policy decisions coming from Ankara, arguing that the currency’s troubles are self-inflicted.   
  • For perspective, a dollar bought just 3.77 lira at the start of 2018. Now analysts predict that figure will hit 8.5. 

As if that weren't bad enough, Saudi is now calling for boycott of "everything Turkish." Not yet official policy but one would think political statements coming out of Saudi Arabia are tightly controlled, sanctioned.  

The Only Thing Red, Mr Putin, Is Your Ruble

Earlier this month, Vladimir Putin, when asked about the Bakken, simply stated that the color of water in North Dakota was the color of the red wine in the glass he was holding. I have no idea what he meant by that. Lost in translation. 

On the other hand, not lost in translation: the Russian ruble had a painful week, ended the week in the red. I doubt the ruble felt anything at all. Perhaps Russian investors and bankers felt something, but I doubt the ruble actually felt anything. 

The US Has Its Mayo Clinic, The Mideast Has Hadassah

Link here. The article is there; it may be a bit hard to find initially with the large ad asking for donations, etc., but if you actually stick it out and get to the article, it's very interesting. My hunch: it's only news to those living outside the Mideast. 


Let's assume Joe Biden wins the presidency. 

I think I read recently that President Trump is the only American president, or maybe the only American president in modern times, that has not gotten the US into another war. 

It sounds accurate to me. 

If accurate, one has to ask why?

Generally, the US gets into a war in reaction to something else. 

To not get into a new war, one might suggest there has been no conflict overseas that grew big enough for attention by the US. 

But think about it. Not one major military operation by this president. No wonder his "past" generals did not support him. [Yes, I saw the political commercials on television. No matter how hard I try to avoid these things they invariably show up, generally during NFL football games.]

But I digress.

One has to ask why there have been no conflicts that grew big enough for attention by the US. Why didn't China and Taiwan become a bigger story? What happened to North Korea? What happened to Syria and Iran? What happened to Yemen? Israel, Palestine?

One answer: the US president is predictably unpredictable. Similar to Ronald Reagan. 

Now, let's assume Joe Biden wins the presidency.

Unlike President Trump, Joe Biden:

  • has no overarching geo-political compass, unless it's money;
  • will be very, very slow to react to developing situations around the world;
  • will become entirely predictable, at least in the eyes of our adversaries;

After surfing through the international news today and imagining Joe Biden as president, the only question I have: will the first military conflict involving a major US response occur in late 2021, or 2022?

The Mideast is a huge powder keg and I think the regimes are waiting for the outcome of the US presidential election before taking their next step. 

Let Me Guess

But we end on this note. Something tells me the world won't miss him.

Prince Azim of Brunei dead at age 38. Cause of death unknown. 

Only details we know:

  • billionaire
  • playboy
  • lived at the family's London mansion in Kensington Palace Gardens

My hunch: Jeffrey Epstein was not directly involved.