🎧 Apple's EarPod-calypse

Tuesday, May 26, 2020 by Robinhood Snacks | Disclosures

"What do you mean it's 'no longer included?'"

Last Week’s Market Moves
Dow Jones
24,465 (+3.29%)
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2,955 (+3.18%)
Nasdaq
9,325 (+3.44%)
Bitcoin
$9,269 (-1.69%)
10-Yr US Treasury
0.661%

Hey Snackers,

The only delivery service that faces zero competition: Brew Dogs — two adorable golden retrievers (Buddy and Barley) deliver craft beers and hop-piness. Call it Air Bud Light.

Stocks gained last week as the reopening of state economies across the US hasn't resulted in major outbreaks yet. While the major US stock indexes gained about 3% each, the Russell 2000 (which reflects stocks of smaller public companies) soared 7% on investor optimism.

On the pod: Scarce. Elusive. Mythical. We found the rare pure-play Millennial stock: E.l.f Beauty's vegan makeup, affordable prices, and Glossier-worthy online game are the avocado toast of cosmetics — more on our 15-minute podcast.

Listen
1. Un-wired: Apple may get rid of free headphones to boost AirPods sales

The EarPod-calypse is here... Like a free side of fries with your burger, or a pack of peanuts with your flight, Apple has always given away a "free" set of white wired headphones with your iPhone purchase. Those days may be over: Apple reportedly may not include EarPods with the iPhone 12. Let's untangle the history...

  • First it was the headphone jack: Don't even think about charging your phone while jamming to EarPods — Apple made that impossible when, starting in 2016 with the iPhone 7, it eliminated the classic headphone jack.
  • Then it was the wires: On the same day it forced headphones into a Lightning Connector, Apple casually intro'd its $159 wireless headphones: Airpods. But Apple was charitable enough to continue including a pair of wired EarPods in each sleek new iPhone box. Until...

The Bluetooth Fairy was extra generous... Apple posted a record quarterly profit in January, largely thanks to a 37% jump in wearables sales (AirPods Pro nailed it). Roughly 60M pairs of AirPods were sold in 2019 — turn that up over 50% to an expected 94M pairs in 2020. Looks like Apple's 2nd profit puppy, behind just the iPhone (see ya, Macbook and iPad).

THE TAKEAWAY

Apple has all the power in its ecosystem... From battery life to software upgrades, Apple can influence your purchases. All it takes is a new product release to make wired headphones as vestigial as iPod Nano. By giving away free earphones with each iPhone, Apple potentially hurt AirPods sales. But if the "no free headphone" reports are true, AirPods may get a boost (our drawer of rando electronic extras probably doesn't need another set of EarPods, anyway).

Highs
  • Came for the $3 bronzer... Stayed for the $2 angled brow brush. E.l.f. Beauty shares soared 19% last week after a 13% quarterly sales pop — thank the blush-worthy triple-digit growth in e.l.f.'s online biz. The cruelty-free, no frills makeup/skincare company thrived on dollar-store prices and availability at "essential" Walmart. Plus, Zoomface is a real thing even if you're not going out.
  • Bezos is sweating... Facebook popped 11% as it intro'd Facebook "Shops," which lets businesses set up digital stores across FB/Instagram. FB gets a "small fee" per purchase — indirectly, it'll also get more ad dollars if businesses find success selling on FB platforms. FB gets to diversify its revenue streams while also propping up its digital lifeblood (ad sales) during ad-pocalypse. And its 3B scroll-obsessed users combined with ecommerce could make Amazon sweat. BTW — Zuck committed to have 50% of workers working remotely in 5-10 years.
Lows
  • Everybody Hertz (sometimes)... Rental car icon Hertz filed going into the weekend. The airport staple is sitting on $19B in debt — most of its 700K cars haven't felt a human touch on their steering wheels in months. Hertz was hurting pre-corona, thanks to competition from peers like Avis and ride-hailing services. But near-nonexistent travel demand was the final nail in its deflated tire.

  • Unicorns falling into a valley... That's the (hilariously) grim picture Softbank (literally) painted in its earnings slideshow. The Japanese tech investment giant posted a record-shattering $18B operating loss for its Vision Fund — nearly $10B of that came from a plunge in the values of its Uber and WeWork investments. Now SoftBank is trying to sell $41B worth of its stock in other companies like T-Mobile to get cash fast.

What else we’re Snackin’
  • Embark: 4 rules for identifying your life's work — it shouldn't be a means to an end, but an end in itself.
  • Laugh: How a pizza shop owner made money by ordering his own pizzas on Doordash (#pizzarbitrage).
  • Focus: 6 things to help you make good decisions in stressful times (because stress decisions are mess decisions).
  • Invest: How to invest in a "slice" of a stock or ETF for as little as $1 (now if only we could own a slice of that Birkin bag).
  • Explore: The 30 best state parks in America — not as famous as the "nationals," but still explore-able.
Snacks Daily Podcast

A new streaming service is born (seemingly) every month — tomorrow, we welcome baby HBO Max into the streaming world. Proud grandparent AT&T is eagerly awaiting Max's first words (probably: "$15 a month").

Before baby Max takes its first steps, we're looking at how it compares to its older streaming peers — hint: it's a video buffet to Apple TV+'s episode appetizer.

Get a taste of our digestible pod

This Week
  • Monday: Markets were closed for Memorial Day
  • Tuesday: Earnings expected from AutoZone and Groupon
  • Wednesday: The Fed's Beige Book gives us the central bank's take on the economy
  • Thursday: Weekly jobless claims. Earnings expected from Costco, Salesforce, Ulta, and Dollar General
  • Friday: Earnings expected from Big Lots

Disclosure: Authors of this Snacks own shares of Amazon

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