Wednesday Oct.14, 2020

📱 The iPhone-palooza wrap

_When Apple goes overboard with the Augmented Reality_
_When Apple goes overboard with the Augmented Reality_

Hey Snackers,

First we had sold-out "flights to nowhere." Now we have sold-out pop-up restaurants in grounded airplanes. The takeaway: people really miss plane food.

Earnings Season kicked off yesterday with stocks dropping on some yikes-worthy results and a fresh corona surge. US COVID-19 hospitalizations hit the highest level in nearly six weeks.

Drop

Apple's new iPhones include 5G, AR lasers, and no charger

Life could be a screen... Apple's seeing to it. The Fruit already killed the audio jack and the home button (RIP). Now, don't expect free headphones or even a charger to come with the biggest iPhone screen ever (FYI, Apple measures screen sizes diagonally). The new iPhone 12 lineup:

  • Pro Max: Beats every iPhone with its big screen energy. At 6.7-in, it's larger than half an iPad. It's also the priciest of the 12s, starting at $1,099.
  • Pro (no Max): For normal-sized hands, there's the $999+ 6.1-in screen Pro.
  • Normie: The base model also has a 6.1-in screen and starts at $799.
  • Mini: This adorable $699 model has a 5.4-in screen for that back-pocket fit.

Throw some wheels on it... And you've got yourself a self-driving iPhone. Unlike the two-eyed Normie and Mini, the Pros have three cameras. But the Pros also have lidar sensors, which shine lasers at objects to measure their distances.

  • It's the same tech that self-driving cars use to build out 3D maps of environments (to avoid plowing into a tree).
  • Apple's using it for augmented reality (AR), so that you can move digital furniture around in your new room, or put your friends' Snap filters to shame.

This could be the biggest wave of iPhone upgrades... iPhones used to make up 70% of Apple’s revenue. Last quarter, they made up just ~44% of total sales. But now all four iPhone 12 models are 5G-enabled. That faster tech could convince millions to cave for better streaming, chatting, and browsing (which we're doing more than ever).

Fly

Delta loses big: it could be an even bigger warning for other "Reopening Stocks"

Diet Coke or OJ?... Delta CEO Ed Bastian will take a double whiskey neat with that earnings report. July to September is usually Delta's peak travel quarter, but instead of swimming in Mykonos you were streaming My Octopus Teacher. Do you want the bad news or good news first, Ed?

  • Bad (terrible): Delta lost $5.4B last quarter, compared to a $1.5B profit for the same quarter last year. It burned through $11B in the last two quarters.
  • Good (better): Delta cut its cash burn to $18M/day last quarter from $27M/day in the previous one. It retired dozens of planes to trim costs.

First to land... While Delta's passenger sales were down 83%, Bastian says there are signs that demand is picking up going into the holidays. Plus, its co-branded Amex card is doing better than competitors, helping offset flight losses. Delta was the first airline to report — and it might go downhill from here:

  • Delta was more profitable than other airlines going into the crisis, so it has avoided involuntary job cuts (so far).
  • American and United are cutting 32K jobs since federal airline aid expired on October 1st.

Reopening stocks fly together... These travel, hospitality, and movie theater stocks benefit disproportionately from murmurings of a return to normalcy. But when one falls, the others usually follow. American and United shares plopped on the Delta earnings. More anti-reopening news bruised other stocks yesterday, too: Carnival, AMC, and Marriott. Like airlines, these companies are hoping stimulus medicine and/or a vaccine will come to the rescue (ASAP).

What else we’re Snackin’

  • Musked: Tesla cuts the price of its Model S in the US from ~$75K to ~$72K — it also trimmed prices in China.
  • Recovered: President Trump's doctor says he has tested negative for COVID-19 on consecutive days.
  • Vax: Johnson & Johnson's sales jumped from last year, but the stock dropped since it paused final-stage testing for its COVID-19 vaccine.
  • Greenback: JPMorgan Chase's profit (surprisingly) rose 4% last quarter thanks to boosted trading revenue from its investment unit.
  • Pop: America's largest movie theater chain AMC says it could run out of cash in 2020 if people continue to Netflix-and-hiberate.
  • Drive: Uber and DoorDash have been rampantly campaigning for "yes" on Prop 22 (so many emails). Their futures are riding on election day.

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Wednesday

Disclosure: Authors of this Snacks own shares of Apple, Uber, Amazon, and Delta

ID: 1366989

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