iPhone X Online Lead Times Improve, In-Store Worsens

Conclusion. iPhone X supply had mixed results over the past week with online improving and in-store worsening. We anticipate iPhone X lead times of more than 4 days to continue for the balance of 2017 and expect the iPhone X to reach supply demand equilibrium sometime in January. That’s a slight positive for the outlook for Apple’s Mar-18 quarter.

Online lead times continue to improve. We noted an improvement in global iPhone X lead times (8 countries), exiting the week (Dec 3rd) at 7.7 days. For the week (Nov 27-Dec 3rd) we measured a decline to an average of 10.1 days compared to 14.7 days in the previous week (Nov 20-26th).

Apple Store availability worsens. We continued our daily monitoring of iPhone X availability, capturing 2224 daily in-store data points for 139 of the 271 U.S. Apple retail stores. Availability at U.S. Apple Stores declined to an average of 7% (week of Nov-Dec 3rd) compared to 16% in the previous week (Nov 20-26th).

  • This past week (Nov 27-Dec 3rd) availability declined to 7%, compared to 16% in the previous week (Nov 20-26th)
  • The sharp drop in supply was after the Thanksgiving holiday weekend

Disclaimer: We actively write about the themes in which we invest: artificial intelligence, robotics, virtual reality, and augmented reality. From time to time, we will write about companies that are in our portfolio.  Content on this site including opinions on specific themes in technology, market estimates, and estimates and commentary regarding publicly traded or private companies is not intended for use in making investment decisions. We hold no obligation to update any of our projections. We express no warranties about any estimates or opinions we make.

Posted in Apple  • 

Alexa First to Business but Google AI Close Behind

Bottom Line. Alexa has 70-80% smart speaker market share and is pedal to the metal in expanding the market beyond the consumer today, being the first company to target the business opportunity. While we expect Alexa will continue to be the market share leader, we believe Google will close the gap in the next 3-5 years as AI becomes foundational to the future of smart speakers.

News. Amazon announced Alexa for Business today. The basic idea is Amazon is building skills around everyday business activities like conference calls, scheduling meetings, keeping track of tasks and ordering supplies. This includes integrations with Salesforce, Concur, SuccessFactors, Polycom and Crestron to name a few. They are also selling a hardware starter bundle which includes 3 Echo’s, 2 Dots and 2 Echo Show’s.

Bravo Alexa. Today’s Alexa for Business announcement is further evidence Alexa is leading the smart speaker market. Alexa is the market share leader for good reason. First, Alexa is smart, and now has over 25k skills compared to 12k that we counted in April (Google does not have skills rather actions).  Second, Alexa 3rd party hardware integration is expanding and earlier this year we estimated there were about 100 manufactures with integrated Alexa IP.

AI, the elephant in the smart speaker room. While it may look like Alexa is running away with the smart speaker market, Google is gaining ground. In October at the Google Hardware Event, Google explained how hardware products will facilitate AI first computing. In 2017 CEO Sundar Pichai has opened each of his public remarks stating Google’s goal of becoming an AI first company. This has obvious implications for Google’s advertising, Maps, YouTube, cloud business and now hardware.

Google likely to gain smart speaker share in 3-5 years, but Alexa will still be a share leader. Google’s efforts in the next few years could yield a measurable increase in market share. As mentioned, today we estimate various forms of Alexa account for roughly 70-80% smart speaker share and we envision Google’s share increasing from about 25% today to greater than 35% in the next 3-5 years.

Why Google’s in a good position. While Google is lightyears behind Alexa’s install base, we believe Google has the best AI (see our comparison here), and their more robust product line could catch up quickly. Google is going toe-to-toe with Alexa in terms of hardware pricing (Echo Dot and Google Home Mini starting at $29). More importantly, we expect Google will weave their AI Assistant into the fabric of the device ecosystem. This is important because integrating an array of devices (i.e. the handoff between the home and the road) is what will push users toward the next generation of our interaction with machines.

Disclaimer: We actively write about the themes in which we invest: artificial intelligence, robotics, virtual reality, and augmented reality. From time to time, we will write about companies that are in our portfolio.  Content on this site including opinions on specific themes in technology, market estimates, and estimates and commentary regarding publicly traded or private companies is not intended for use in making investment decisions. We hold no obligation to update any of our projections. We express no warranties about any estimates or opinions we make.

MVP for Dummies: Robotic Enhanced Training Here to Stay

Visit to the toy department. We visited the robotics toy department in the form of a high school football field to test the Mobile Virtual Player (MVP) Drive, an $8,000 robotic tackling dummy that has been adopted this year by 15 NFL, 33 college, and 50 high school football teams. Today, the goal of Drive is to reduce practice injuries and improve or modify drills. In the future, MVP will enter new markets, including law enforcement and military training (think dynamic target practice).

Robotic enhanced training is the future. While there’s no substitution for replicating game contact and real life situations, there are many uses where robotics can improve readiness. After spending an hour with the product, we left as believers that robotic enhanced training is here to stay.

MVP for dummies. If you’re new to the robotic enhanced training field, like we are, this note will get you up to speed. First, the facts about the MVP-Drive (Football) and MVP-Tactical (Military and Law Enforcement) products:

  • Height: 5’8″
  • Weight: 190lbs
  • Speed: 20mph
  • Battery Life: 6hrs
  • Charging Time: 6hrs
  • Price: ~$8,000

Safety. Traditional football and military training dummies are stationary or require physical direction by a human to move. The MVP-Drive dummy is the first mobile, remote-controlled, self-righting (when it falls down it gets back up) training dummy. Anyone can operate the dummy using an RC remote control. As you know, for the past 10 years there has been ongoing research on concussions and the impact of conditions such as Chronic Traumatic Encephalopathy (CTE) on former NFL players. Concussions are typically associated with huge, one-off hits; however, concussions more often occur from repeated impacts such as the continuous head-to-head contact that occurs during practice. According to MVP, more than 50% of both injuries and concussions occur during practice at the high school and collegiate level. MVP Training dummies eliminate the need for player-on-player contact, while still allowing players to practice proper fundamentals with full-speed reps.

Improve or modify drills. Drive gives coaches an added element to drills to create different scenarios. For example, Drive could act as pass rushers, moving tackling dummies, or even help players practice pursuit angles.

Passed Loup Ventures ease of use test. Drive’s speed and ease of control surprised us. Below, Loup Ventures put Drive to the test. With Alex Schwappach at the controls, Mark Grangaard attempted his best Jadeveon Clowney impression using MVP-Drive.

Top: Jadeveon Clowney, Bottom: Mark Grangaard

What coaches say. As mentioned, MVP-Drive is used today by 15 NFL teams, 33 NCAA programs, and 50 high schools. The Pittsburgh Steelers were the first NFL team to use the MVP-Drive in practice, and Head Coach Mike Tomlin said Drive has had a material impact on player safety and performance. At the NCAA, level Rich Rodriguez of Arizona and Chip Kelly (recently) of UCLA have also made comments about safety and performance improvements from using Drive. We believe as long as coaches see a direct correlation between dummy usage in practice and regular season games won, adoption will increase.

Additional markets of law enforcement and military. Similar to the MVP-Drive, the MVP-Tactical dummy allows military and law enforcement units to practice real-life scenarios with a mobile target. The current military training options are either fixed or reactive and only allow static, two-dimensional short-range training. Current options are predictable, do not provide instant feedback, and most of all fail to replicate the stress of a true operating environment. Mobile solutions do exist, however almost all of them have restricted motion and are inviable for training in close-quarters combat, a critical function of military and law enforcement. The MVP-Tactical dummy has 3 armored layers and is designed to withstand a .50 caliber bullet, yet will still protect against shrapnel and ricochet. It’s a great improvement from existing options.

Disclaimer: We actively write about the themes in which we invest: artificial intelligence, robotics, virtual reality, and augmented reality. From time to time, we will write about companies that are in our portfolio.  Content on this site including opinions on specific themes in technology, market estimates, and estimates and commentary regarding publicly traded or private companies is not intended for use in making investment decisions. We hold no obligation to update any of our projections. We express no warranties about any estimates or opinions we make.

Why the Money’s on 3D and AR for Mobile

Written by guest author Matan Libis, VP of Product at WakingApp.

Remember when VR headsets were going to be as ubiquitous as iPhones?

The launch of Facebook’s Oculus Rift and HTC’s Vive in the spring of 2016 was met with understandable excitement: the technology was impressive and the user experience exhilarating. But any dream of mass adoption beyond gamers has so far been just that. As TechCrunch reported, VR revenue in 2016 fell far short of the $3.8 billion projections.

There may yet come a day when VR is realized for its full commercial potential, but in the immediate future, the tech world is setting its sights on AR and 3D for mobile. The oversize and unexpected success of Pokémon GO ($600 million in AR mobile revenue in the first three months alone) last year turned heads and reframed the conversation.

And unlike VR, there’s more to AR than just the “wow factor.” AR has real business use cases that can be applied now, from the manufacture and design of the Internet of Things (which one report estimates could be a $7 trillion AR market by 2027), to 3D ads on mobile, to customer service and educational training. For those reasons, Tractica predicts that AR usage on mobile will grow to 1.9 billion unique monthly active users in 2022, from 342.8 million in 2016—to the tune of $18.5 billion in annual mobile AR revenue.

The tech giants are already signaling a shift to AR. Facebook, which bought Oculus for $2 billion and poured millions more into its VR efforts, announced the launch of a platform for augmented reality at Facebook’s annual developer conference in April. Microsoft is adding an AR viewer directly into Windows 10 later this year. And Apple has just released its ARKit, hoping to open the AR market to users of all kinds, with apps for gaming, design, home improvement and much more. Last year, the company’s CEO Tim Cook envisioned a future when we “have AR experiences everyday, almost like eating three meals a day. It will become that much a part of you.”

In fact, some of Snapchat’s 166 million users have already internalized this message. Those silly selfie lenses have brought AR into everyday usage, and last month the company added 3D objects to the mix. It’s not a stretch to imagine 3D/AR as the next big format for sharing data, just as we once texted each other jpgs, then videos, then GIFs.

The question is, why strive to build a device as universally used as a mobile phone when you can add an AR or 3D layer to existing phones? Mobile-first has to be the mantra of any business today. And the good news is that for companies that want in on this AR/3D wave, the barriers need not be so high.

A mobile-optimized platform allowing anyone—even non-programmers—to easily integrate 3D and AR/VR into existing apps – has the potential to revolutionize business at many levels.

For example, Autodesk has recently enabled AR/VR in its software so that CAD users and customers can experience their designs in real time. Microsoft, too, is using AR in its Power BI iOS app to give its customers the ability to augment dashboard tiles within the Power BI app by displaying AR content directly above a scanned QR code. The possibilities are really endless – easy access to AR would allow engineers to gain a real picture of what their creations will be like in the real world, it will allow interior decorators to build a virtual scenario that lets clients walk around and experience for themselves the designed space that they have invested in, and it is already being applied in retail sales; there’s Amazon’s new AR View that lets customers visualize online products in their own home, and stores like Gap and Adidas are using AR to show customers how they will look in outfits with “virtual dressing rooms”. Industrial companies can use AR technology to virtually train employees instead of exposing them to risk by placing them, untrained, in sensitive environments.

The rapid adoption of AR technology is happening and not only are large corporations jumping onboard, but small and medium sized businesses are as well. For AR and 3D, the future is bright—and it’s happening now.

This piece originally appeared on WakingApp. For more, follow their blog and LinkedIn.

Disclaimer: We actively write about the themes in which we invest: artificial intelligence, robotics, virtual reality, and augmented reality. From time to time, we will write about companies that are in our portfolio.  Content on this site including opinions on specific themes in technology, market estimates, and estimates and commentary regarding publicly traded or private companies is not intended for use in making investment decisions. We hold no obligation to update any of our projections. We express no warranties about any estimates or opinions we make.

Tesla Model; Semi Adds 10% to 2023 Revenue

As of today, our model now reflects both the Semi and Roadster. We expect combined these two segments will add about 2% to the Street’s 2020 revenue and about 10% to 2023 revenue, almost entirely from the Semi. Given Tesla’s history of missing manufacturing deadlines, the vast majority of Street estimates currently do not factor in the Semi or the Roadster.

Impact to model. We believe Tesla will begin shipping Semi’s in the Jun-20 quarter, later than the 2019 target Musk laid out at the Semi unveil event earlier this month. In 2020, we believe Tesla will ship 3,250 Semi’s, and account for ~2% of total revenues, but as demand begins to inflect we anticipate the company will ship 40,000 units by 2023. Assuming a $171k average selling price, we believe in 2023 the Semi can generate $6.8B in revenue and account for ~9% of total sales.  We expect the Roadster to add about 1% to 2023 revenue.

Expect Semi profit margin to be similar to overall company. There has been little color provided on the margin profile of the Semi.  Our belief is the margin profile will be similar to Tesla’s current margin. This is based on the positive margin effect of the Semi using motor and battery components similar to the ones used in the Model 3 and benefit from economies of scale, and the negative margin impact of building a low volume Semi cab. We believe these two forces will offset yielding margins inline with current levels. Since we believe the Semi can add ~10% to our original revenue estimate, we believe the company will be able to capture most of this additional upside on the bottom line. Our new 2023 EPS is $16.62, which is up from our prior estimate of $15. Link to model here.
Disclaimer: We actively write about the themes in which we invest: artificial intelligence, robotics, virtual reality, and augmented reality. From time to time, we will write about companies that are in our portfolio.  Content on this site including opinions on specific themes in technology, market estimates, and estimates and commentary regarding publicly traded or private companies is not intended for use in making investment decisions. We hold no obligation to update any of our projections. We express no warranties about any estimates or opinions we make.
Posted in Tesla  •