Asymco Bulletin 012 - May 10, 2026
by Horace Dediu
Asymco Bulletin is a digest of all the work we have published for the week ending May 10, 2026.
Research
Integration, culture and market creation
This is the first part of a series of excerpts from an interview with Asahi Shimbun newspaper on Apple & Innovation: The Asahi Shimbun Interview Part 1: Horace Dediu / Takeshi Narabe & Dylan Weir / Asahi Shimbun Interview, April 2026 Takeshi Narabe.
We have to recognize Services has only been a story for the last 10 years. And arguably integration of software hasn’t been really all that important before 1998 when Apple brought Steve [Jobs] back and with him came NextStep, which was [an] operating system based on Unix. And that was much more robust and much more focused around software engineering than the original MacOS. Or, what I would say [constituted] version 1 of Apple, which began in 1970s until the 1990s.
Culture in the sense of what are the priorities? What do we concentrate on and to what degree do we need to focus? They [management] repeat these things all the time. Focus, focus. What means this? It means saying no to many things, but it also means saying yes to the things where you can bring great things to bear. It’s where Apple has a unique advantage. And that means saying no to a lot of things.
Nota Bene
Tata Electronics’ workforce expands to 75,000 from 15,000 →
Tata Electronics' rapid workforce expansion to 75,000, driven by strategic investments and acquisitions, positions India as a rising powerhouse in electronics manufacturing, rivaling China's model.
If we add Tata and Foxconn, we are probably in the 200,000 range this year. The comparable China model is …
Will Apple preserve iPhone 18 Pro pricing at 17 Pro levels? →
Apple maintains iPhone prices amid rising Android costs to boost market share, leveraging a two-track model to balance accessibility and profitability.
There is always a huge surprise when Apple does the same thing it always does.
Apple’s R&D investments top 10% of sales as AI race creates ‘sense of urgency’ →
Apple's R&D spending surged to 10.3% of revenue, driven by AI advancements, while maintaining a distinct, less infrastructure-heavy capital expenditure strategy compared to peers.
Apple has been increasing its R&D spending from around 2% to 9% of sales on a 4-trailing quarter basis. It has overtaken SG&A which has remained around 7% since 2011.
iPhones where first, second, third and sixth most popular phones during the first quarter →
In Q1 2026, iPhone 17 dominated with 6% global sales, securing the top three spots, while Samsung's five models highlighted a record 25% market concentration amid component cost pressures.
There are over 450 brands and over 6000 phone models in the market yet 10 models from 3 brands make up 25% of sales. The near future is harsh…
Google’s free cash flow will hit zero next year →
Tech giants like Alphabet, Amazon, Meta, and Microsoft are heavily investing in AI infrastructure, risking near-zero free cash flow in 2026, betting on future dominance despite current financial strain.
Even before these future investments are considered, for the trailing twelve months Alphabet’s EV/FCF has his 73 vs. a P/E ratio of 29. If FCF goes to zero…
Office Hours Q&As
Big shoes to fill: will the haters spare John Ternus? →
Will John Ternus's tenure as Apple CEO will likely intensify criticism, echoing past scrutiny faced by Steve Jobs and Tim Cook, due to inherent public and media skepticism towards new leadership. →
Why won’t Apple become a cloud company? →
Speculation on Apple's potential to revolutionize high-end computing by integrating powerful AI capabilities directly into personal devices, shifting focus from centralized cloud services to edge computing. →
Why is Apple’s R&D run rate suddenly $40 billion/yr.? →
About Apple's significant R&D increase, is it mainly hiring for AI testing infrastructure?. →
Will Apple avoid giving their cash flow to Nvidia? →
Jay Goldberg speculates that Apple may invest in developing its own server chips to reduce dependency on Nvidia, similar to moves by Google and Amazon. . →
Margins or revenue: which matters more? →
Which is better? Gross revenue or gross margins?. →
Is Apple an Enterprise Gatekeeper? →
The potential legal risk for Apple in combining products and services centers on antitrust concerns, particularly the "gatekeeper" theory in Europe, which argues against bundling services by a dominant hardware platform to exclude competitors. . →
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