You may well wonder why Asymetric is misspelled.
Not everything you hear in the Asymetric podcast makes it through the ruthless editing process. I retrieved some of what was deleted and will post it to YouTube as Asymetric Deleted Scenes. While these segments didn’t make the final cut of the podcast, they may still be worth sharing. Here is the first.
https://www.youtube.com/watch?v=0Pex_PelSmg
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You don't have to choose.
In the grand debate on the future of computing, we've been led to believe that there was a choice coming, a new interface to replace the touch UI interface that emerged in 2007.
One camp believed that the future was ambient or intent computing where conversations and minimal interactions would replace taps and swipes and staring at screens. Apps would disappear as well as almost all visual interfaces. Devices would be not much more than microphones and perhaps earbuds. The initial instance was Amazon Alexa but more recently the quixotic Humane and rumors of a OpenAI pendant or tchotchke that linked us to the great mind in the cloud without messy screens.
The other camp dove into virtual reality so that everything we see is generated by computing. The world itself would be re-painted by the machine and every photon hitting our retinas would be computed and every move we make, every breath we take would be tracked as forms of input.
These are opposite ends of a spectrum: from minimal or almost no interaction to full immersion at the exclusion of passivity. From seeing nothing to seeing everything and from barely hinting intent to monitoring every muscle moved.
The passive computing seemed to be winning. The VR or Visual Computing was not catching on. Device sales are not great and prices too high. Worst of all, devices are too onerous for mass consumption. In terms of wearables, eyes were losing while ears were winning.
However lost in the WWDC news tornado was the updates of VisionOS 27. The list of updates is long and quite esoteric but it's clear that there was a lot of work involved in expanding the power of Visual Computing especially in the creation of new apps and content. Also all AI advances are being applied to VisionOS and even adapted in clever ways: Siri AI can be activated by just looking at the glowing orb that embodies it in the spatial world.
Clearly Apple is not deprecating Spatial Computing. It's a remarkable creation and those of us who use it find it irresistible and irreplaceable.
What the update clarifies most of all is that there isn't an evolutionary branching in the future of computing. The touch UI did not immediately obviate the need for traditional personal computing interfaces. The smartphone brought computing to more people and more contexts but keyboard and pointer computing cannot be fully replaced by touch. We have a situation where there is co-existence between touch and non-touch computing. Indeed we also have sensor computing in the form of Apple Watch and AirPods. Perhaps there were will also be Apple spectacles to expand the compute real estate on the body.
Intent computing will probably reside primarily with our phones and wearables but Spatial Computing will strengthen their position alongside keyboard computing. Spatial was always a "high commitment" interface. To use it you strapped in, settled down and became acclimated. Then you became productive. A session was going to last at least 20 minutes, perhaps even a few hours.
Intent computing is a few seconds of use. Perhaps a few seconds strung out in multiple sessions but it was far more "glance" computing than "sit down" computing.
So why not have all forms of computing?
As the diagram on the coral of life shows, evolution results in a multitude of "form factors". Some do become extinct (see the scroll wheel iPod or the stylus PDA.) But most survive and coexist.
Spatial Computing is extraordinarily powerful. It will evolve and it will probably become the highest utility for those who create.
AI sales are booming. AI FCF not so much. So what new cash flows does Apple Intelligence unlock?
Apple's release of a new framework for AI at WWDC26, centered mainly on new layers in the device/OS which process intent to either on-device or world models and couple it to experiences which are system-wide, including apps.
This is how the data and the inferences flow but what about the cash?
I am writing without a full picture in mind, and perhaps one does not yet exist, but my assumption for at least three years has been that the value of AI will split between the creation of (frontier) models and their distribution. Apple chose to focus on local models, license or partner for frontiers and stitch together the means for distributing both.
That is until on-device will be good enough to perhaps bring all models in-house.
But distribution is always where it's at. So how do the new announcements affect this?
Let's follow the money. The costs of inference will be partly borne by Apple for what they keep in private cloud but mainly by apps and hence subscriptions which will include marginally increasing compute costs. This will lead to increasing or new subscription pricing and the usual commissions for App Store distribution.
The fact that this is all implied rather than explicitly stated should be seen as a tacit acknowledgment that the Services business will not change much, if at all. It will perhaps benefit from an uplift if the new AI-powered apps are very popular.1 This new AI might create more demand or expand existing demand. That will all depend on the innovations developers come up with.
But the elephant in the monetization conference room is hardware. AI demands a huge step-function increase in computing resources--both compute and storage and integrated memory. The minimum requirements are already leaving two to three year old hardware behind.2
Again, if AI is compelling enough, users will need to upgrade. Not just their phones but the Macs, iPads, Vision Pros, Watches, probably AirPods too. Then there is Home which is seeing foreshadows of a significant AI enabled upgrade. This means HomePods but also probably new devices altogether. Rumors of spectacles coming are par for the course. Health will also be revolutionized.
This idea that AI is monetized through hardware should hardly be a surprise…
… Right now the greatest beneficiary is Nvidia which won the AI lottery by having the right chipsets at the right time. And with only a market of 5 customers and a few million processors it became worth $5 Trillion.
Apple has the processes and priorities in place to drive a consumer device AI experience with 1.5 billion customers and a few billion processors over the next decade. Perhaps even longer.
Apple, let's not forget, also has been monetizing software and services with hardware. Unlike the PC and Android world where software profits (and margins) accrue to software makers while hardware is left to starve, for decades Apple's integration meant that its business model afforded it great margins that could not be replicated.
Don't confuse efficiency and effectiveness
Apple has cumulatively shipped over 450 million Apple Intelligence-capable iPhones till Q1 2026.
Apple has the largest number of smartphones with consumers which are capable of GenAI as compared to any other brand.
At WWDC ‘26, Apple needs to deliver a revamped Siri showcasing practical use cases, making a strong statement.
Although iPhone sales remain strong, competition is already moving ahead in terms of AI, and Apple must be ready to follow since Agentic AI has the potential to redefine the smartphone industry.
Source: Counterpoint Research
NB: Words like "needs", "must", "follow" contrast with minimal evidence of demand.
Effectiveness is a number. Efficiency is a ratio. No bank has ever accepted a ratio as a deposit. Counterpoint continues: "Although the lack of a more fully AI-featured Siri…
…has not impacted Apple’s sales yet; iPhone 17 has been performing better than its predecessor with iPhones revenues hitting a first quarter record. This indicates that AI is not a primary buying factor for iPhones."
Not only that but what will make AI a buying factor is whatever Apple delivers. AI market creation will happen by means of AI discovery by users. Whatever they discover has to have a job that it's hired to do.
Chatbots and search are known for what they can do and are not creating new markets.
450 million devices a real number. The ratio of how many are actually used for AI remains to be measured.
How to measure helping others
Apple isn't measured by revenue or profit, at least not primarily. The measure is always satisfied customers. The application of services, software and computing hardware to improve lives has always been the modus vivendi and the resulting customer creation has always been the metric of success. Revenues and profits follow customer creation in a 1:1 relationship.
WWDC seems to attract attention as a catharsis for product and strategy announcements but it was never intended to be this. It's about developers (the D in WWDC) and what matters to them: APIs, operating system updates, languages, SDK, and other tooling. It's also a chance to reveal the economic value proposition for those developers who are following their part of the $2 trillion ecosystem.
And so the measure of WWDC should be how developers are created and satisfied. The products, which come later, are important but what matters more is developer opportunity, productivity and satisfaction.
So here is what I'm looking forward to:
As Apple has shown with accessibility improvements (foreshadowing!), AI can be used to make people's lives better especially those who cannot perform due to disability. AI can lift those "below the median" in terms of many forms of ability: below median communications, below median health and below median mobility. Those with more limited ability can be "enhanced" into at least median ability. By definition, half of humans are below the median so helping them is as useful as helping those above the median.
This is in contrast to the narrative that AI makes supermen. The opportunity is not mainly about taking over high ability tasks and forcing human effort to be displaced. it's much more about making the less able become more abled. (Characteristic of GenAI output is the "averageness" of it. For those of exceptional ability it feels worse/erroneous and irritates. For those of less ability it's empowering. AI pushes toward the median, both from below and above.)
Below the median here does not necessarily mean below the median income or wealth. Ability is not always correlated with income. There are many Apple customers and potential Apple customers who can use help. I surely can use help in many areas of life.
So we should look for things which currently are done very poorly by people and machines and seeing how AI can get them done well. A classic example is in health: eating well, sleeping well, exercising and preventing chronic disease is a huge opportunity. Another is what I call life friction. Helping with housekeeping, scheduling, finances, travel planning, administrative tasks--the things which only the wealthy can afford to hire help for. We wait and wait for machines to help us but we only get half-baked, difficult to integrate, compromised in some way services.
WWDC is about the scaffolding upon which these grand problems can be solved. Scaffolding is not pretty to look at and most look away in disappointment if that's all that is revealed. But no matter how well regarded, no great building has ever been built without scaffolding.
Asymco Bulletin is a digest of all the work we have published for the week ending June 7, 2026.
Office Hours Live Q&A, Tuesday June 9, 2026
Day after Apple WWDC'26 Keynote
Join us for our June 2026 Office Hours the day after WWDC'26 for a look into Apple's announcements, implications, and insights, and our live Q&A.
To sign up, and for the latest live event information, visit: asymco.com/live. →
Apple has compounded net income at 26.6%, revenue at 21.5%, and share price at 27.7% for two decades, thus doubling every three years. Yet despite this, 21 of 49 analysts rate it Hold or Sell, with another 5 having no opinion. Extraordinary claims require extraordinary evidence yet assuming the Apple flywheel is about to grind to a halt is still a majority opinion. →
The App Store ecosystem facilitated $1.4 trillion in 2025. Add Apple's direct sales and the Apple Ecosystem comes to $1.8 trillion; add browsing, social, and messaging activity and the Apple Economy reaches roughly $3 trillion. Seen another way, at a $4.57 trillion market cap, Apple is valued at only 2.5 times its ecosystem and 1.5 times its economic footprint. These third-party dependencies are a measure of platform resilience and a carefully worded caution to regulators about the downside of interfering with it. →
Part 4 of the Asahi Shimbun interview turns to the spec trap. Apple maintains improvement but is selective: it ignores refresh rates beyond what the eye can see, and invests instead in features nobody asked for, like Face ID and AirPods. The phone became a machinery of vanity because the supply of cameras created demand for image editing, not the other way around. Christensen thought Apple would be disrupted by the low end. The honest answer for why it isn't is: culture, held together by extreme diligence. →
Morgan Stanley reiterates $330 price target with bull-case $440 → Morgan Stanley reiterated $330 with a $440 bull case if WWDC unlocks an AI re-rating. Apple does not respond to market fads, and a multiple above 40 is almost never experienced. Disappointment after WWDC is nearly guaranteed because it has always been a software and tools show. →
Citi reiterated a Buy rating and a $315 price target → Citi reiterated its Buy and $315 target ahead of WWDC, expecting a revamped Siri to make Apple an edge AI winner. Edge AI is inevitable, but it was also inevitable two years ago. The target is already priced in, making the AI story a non-starter. →
Q4 PC shipments are expected to fall 20% year-over-year, 11.3% for the full year → IDC now sees PC shipments falling 11.3% for 2026 and 20% in Q4, with no recovery in volumes until after 2030. The MacBook Neo is the only thing keeping the broader notebook forecast from being worse. This is a multi-year opportunity for Apple that may reset PC market share dynamics permanently. →
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The Asahi Shimbun Interview Part 4
Horace Dediu / Takeshi Narabe & Dylan Weir / Asahi Shimbun Interview, April 2026
Takeshi Narabe • 22:44
Japanese companies always follow and concentrate on seeking additional functions so that is very in contrast to Apple so there is a growing concern that Apple might be falling into the same spec trap that runs parallel. Japanese firms you know focusing on incremental hardware improvements like you know iPhone's more thinner and thinner...
Horace Dediu • 23:34
It's true. But I will say to the defense of Apple, of course, they need to maintain some improvement. Otherwise, people may not consider buying it. They do think hard, though, about what needs to be improved. And many times they don't improve things that many people ask for. They'll say, "Oh, you need a refresh rate of hundreds of hertz." They don't bother with that. Or they [won't offer] more resolution, more than even the eye can see. They don't do that. But they'll do a lot with the camera.
And they'll probably do more. They do amazing things with audio. They do really, really interesting things as far as... Like face ID was something that was nobody asked for. But now it's a very, very useful thing. People recognize the value. So I do think there's a roadmap there that's kind of interesting.
But here's the bottom line, you know, Christensen said, that the trajectory of what performance people expect is not as steep as the trajectory that companies can deliver. And that's why you overshoot. What Apple has been able to do, at least through the lifespan of the iPhone so far, is to cause people's interest in more improvements to rise a little bit.
And so the theory basically says that there is a flat trajectory to the user demand of performance. But my [observation] is that eventually you do drag people up, just like with non-consumption. People don't ask for a better camera, but once you give it to them, they're like, oh, yeah, I really want an even better camera.
[The performance demand] it created... I mentioned the short video TikTok format, It was the phone's camera that allowed [average] people to suddenly become filmmakers. And it allowed people to become "vanity machinery"1. It became all about vanity, all about selfies. And [as a result] you have to have a front camera and a back camera and you have to have editing software and you have to have a more powerful processor and you need a huge amount of storage when you're dealing with video.
So suddenly, the phone needs more and more and more. But the demand for video editing on a phone was created essentially from nothing. It was created by the supply of camera. And so, yes, that is a theory that you have a problem if you overshoot. But I think in the old days, a consumer electronics company would add buttons.
I was at Nokia for a long time, and we had buttons and buttons and buttons. We had one phone with over 100 buttons on it.2 That wasn't very useful. So the idea of Apple is that they remove buttons. They make it even cleaner in that design, and they make it easier. So face ID is an example, and privacy is important.
By the way, that's another thing that they sold to people. If you think about it, nobody asked for privacy because everybody was okay with sharing. But the fact is, it's like the automotive industry has safety, and nobody asked for safety either. But you should deliver safety, you should protect the passenger. [Today] it's considered hygiene. [If] you don't have it, it's bad, but if you have it, nobody cares. But in the case of Apple, they're pushing on privacy.
So yes, it is a concern that you overshoot. However, one more defense of Apple is that they introduce these wearables. So if you take the AirPods, for example, again, not a product anybody asked for. And when they were first introduced, they were made fun of because it was [so funny looking.]
The AirPods are a very clever new product, [they are] an extension of the iPhone. They're not the iPhone per se, but we have a wonderful must-have accessory. I feel like I'm naked without taking my AirPods with me. The same with the watch. Another product extension. Again, it's an option. You don't have to have it, but once you have it, it becomes addictive.
There are many things on the watch, which again, from health reasons, from managing information that I only need to look at for a few seconds, all of those things. (I'll give you a simple example. I never check the weather on my phone. I only check the weather on my watch because it's there with the temperature always on the home screen. And if I want to learn more, I tap on it. I don't even know how to do it on the phone anymore. You know, I have to find the weather app and then scroll and things like that. Never do that anymore.)
So there are things you do now with accessories that the phone has essentially been disrupted by. But it's still at the heart of the network of Apple. It used to be the Mac was at the center. Now it's the iPhone. So again, this is cleverness.
I was a student of Christensen, and Christensen always thought that Apple was not disruptive, and that Apple would be disrupted by the low end. [I was not so sure.] I was a bit sensing that there was a disturbance in the theory because in many ways Apple's behavior is so atypical to a normal company. And most companies would do the wrong thing, but somehow Apple managed to not step on those mines, not to fall into those traps.
Why? I'm not quite sure. And we continue to have the discussion. I really think it's culture. I really think that they've solved the Innovators Dilemma. Not by reading a book, not by taking a university class, but by always being extremely nervous, extremely careful and extremely passionate and extremely paranoid. All of these things.
Which points out the vulnerability of Apple. If that culture breaks, if the management, the next generation doesn't know how to do it, then suddenly it might fail. Because it's held together by such a force that it's hard to write it down. It's public information actually, that they have Apple University, which is meant to teach internally how things are done to the next generation of managers.
So this is something they are trying to codify and to preserve. And that's an experiment, I would say, because it's not easy. But again, that's a self-critique, an introspection, looking at yourself and asking, why am I good? How do I make sure we continue? Few companies do this. Founder-led companies might, because the founder is the company, in a sense. The founder is the culture. The founder's personality is more or less how everything is done. So those companies, to speak of, let's say, Meta with Zuckerberg, even Google, and those companies, or Amazon a little bit with Bezos, although he's mostly gone.
[But], that's not an answer, because the founder doesn't last 50 years in that job. And as we talked about one century, no way is it possible. It's beyond the human lifespan.
Next in series: Part 5: Succession, study of the firm vs. study of the person
Previous in series: Part 3: Low-end, Game consoles, Secondary Markets, Displays and AI
Interview as published: 聞 Asahi Shimbun on Apple & Innovation
The iPhone maker is trading at 2.5x its ecosystem value and 1.5x its economic impact
Apple today announced the global App Store ecosystem facilitated over $1.4 trillion in developer billings and sales in 2025, according to a new study by economists at Analysis Group. For more than 90 percent of the billings and sales facilitated by the App Store ecosystem, developers did not pay any commission to Apple. Since 2019, the size of the App Store ecosystem has nearly tripled, as the App Store remains the safest and best place for users to discover and download apps. .
Source: Apple
Bill Gates once said you have a platform when other people make more money from it than you do.
In other words, success is if there is more value created on top of it than captured from it.
Few platforms qualify but Apple's certainly does. Apple's ecosystem is shown in the graph below.
Apple's direct payments to developers were about $126.7 billion but, as the Analysis Group report shows, Apple and the developers enabled transactions dwarfing app store transactions. In 2025 Apple captured a tiny fraction of the economic activity it induced on its platforms (about $57 billion out of $1.437 trillion or 4%).
Combining the billings and sales facilitated by the App Store and Apple's direct sales of products and services leads to a total of over $1.8 trillion. I call this the Apple Ecosystem (Apple + App Store.)
But that's not everything. There are lots of economic activities on the platform that do not involve the App Store. Activity on browsing and social media and messaging apps probably add another 50% on top of this, perhaps even 100%. I call this the Apple Economy (Apple + App Store + All other transactions.)
Ultimately, the 1.4 billion Apple users using 2.5 billion devices are likely inducing as much as $3 trillion of economic activity.
It seems to me that we need a way to measure a multiple of this activity as perhaps a fundamental metric of value creation.
At $4.57 trillion current market cap, the value is only 2.5x its ecosystem and 1.5x its economic footprint.
These activities may not benefit shareholders directly but they are a measure of the resilience of the platforms insofar as other parties are benefiting and relying on the platform for their economic lives. Moreover, the switching costs or absence of frictionless alternatives means there is a huge downside to interfering with the platform. This measure is a carefully worded caution not just a celebratory pat on the back.
Another 10% do not provide a rating.
Over the past 20(!) years, Apple net income has grown at a compounded annual growth (CAGR) of 26.6%, Revenue growth has compounded at 21.5% and share price has compounded at at 27.7%. That means the company has been doubling at least every 3 years for more than 20 years.
The graph below shows share price and yearly earnings (and multiples of those earnings) since 2006. Note the vertical scale is logarithmic. The Price line has been growing at 27% or doubling every 2.6 years. The exercise of predicting the share price based on extrapolation is left to the reader.
In spite of this, data shows that 21 out of 49 analysts who follow Apple have the equivalent of a "Hold" or "Sell". An additional 5 follow it but have no opinion.
It takes significant courage to predict a reversal of a 20 year trend. That a majority of analysis implicitly or explicitly believe Apple is on the precipice of failure may come as a surprise given the recent rise in price and optimism around AI. The graph shows the percent of Hold/Sell/Underperform/no opinion has been rising.
The graph below shows the targets published recently.
The targets are sorted by rating and then value. The "Buy" rated are encapsulated, the rest have all the other ratings. The Red line is the average of all ratings. Some of the ratings and targets, especially the lowest, are out of date.
Extraordinary claims require extraordinary evidence. Of course, a 20 year trend can end, even a 50 year trend can end. But the longer it goes, the more important it is to understand why it has gone on for so long and therefore to understand how it can end. Arguments that it can end because "rising prices and/or delays for AAPL's component supplies, potentially slowing AAPL's rev growth, and/or lowering margins" don't counter a 20 year run of compounding 27% growth. Surely, supply chain management and cost hedging strategies are not a new problem.
The skeptical claims have not presented extraordinary evidence. The strongest has been that if AI can create an alternative to the user interface Apple pioneered, and if Apple would not be incentivized to embrace this new paradigm, and if enough users would abandon the comfortable and familiar digital life Apple affords them then Apple would slow or stagnate. There are a lot of "ifs" in this argument. Each more dubious than the other.
In contrast, the "flywheel" or momentum of serving 1.3+ billion users with iris-dilating products and services provided at premium positioning seems self-explanatory.
That almost 40% of the analysis covering Apple believe that it cannot deliver above-index average growth continues to amaze me.
We will be discussing this and other Apple-related topics at our upcoming June Office Hours on Tuesday, June 9th, 2026 (day after the WWDC'26 keynote.) Sign up today!
The next Asymco Office Hours Live Q&A will be on Tuesday June 9th at 12pm ET / 9am PT. Horace will review new Apple announcements and implications, and we will take Q&A from our live audience.
Sign up and latest updates at asymco.com/live.
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If it wasn't for the MacBook Neo the fall would have been much worse.
IDC now forecasts global PC shipments will decline 11.3% for the full year, with conditions worsening progressively through Q4, when shipments are expected to fall 20% year-over-year.
Pull-forward demand masked the problem, temporarily
The first quarter of 2026 offered a deceptively encouraging signal, with shipments growing 3% versus the same period last year. But that strength was largely borrowed from the future. Buyers, both consumer and commercial, accelerated purchases ahead of anticipated price hikes and product availability constraints.
Pull-forward demand masked the problem, temporarily
“The anticipation of rising prices and of limited availability of some system configurations due to memory and other component shortages has led some end-users to make purchases earlier than anticipated,” said Jean Philippe Bouchard, Vice President of Devices and Consumers at IDC. “We’re not seeing any relief to the memory shortage situation before the end of 2027, which means prices will continue to rise and PC manufacturers will struggle to maintain full product portfolios for the foreseeable future.”
One notable wildcard is Apple’s MacBook Neo, which has driven stronger-than-expected notebook demand and prompted IDC to revise its notebook forecast upward.
Source: IDC
NB: The problem is a memory shortage: PC manufacturers are struggling to maintain product portfolios.
“The introduction of the MacBook Neo is putting real pressure on the entire PC ecosystem,” said Jitesh Ubrani, research manager for IDC’s Consumer Devices Trackers. “We expect vendors to respond with a combination of new silicon, a more efficient OS from Microsoft, and aggressive promotional pricing.”
“The competitive pressure from the Neo is providing a partial offset to broader price increases, keeping some low-cost notebook options alive. But the overall trajectory for average selling prices (ASPs) is firmly upward. IDC forecasts ASP growth of 17% in 2026, and even as memory capacity expands over the next two years, pricing is unlikely to return to 2025 levels,” Ubrani added.
As the graph shows, IDC forecasts no recovery in volumes until after 2030. This is a multi-year opportunity for Apple and may reset market share dynamics permanently.
As the graph shows, IDC forecasts no recovery in volumes until after 2030. This is a multi-year opportunity for Apple and may reset market share dynamics permanently.
Recall that just a few days ago IDC forecast that smartphone shipments are headed for a 13.9% decline in 2026. This is even worse than the 11%+ for the PC market. The production planning in Cupertino must be feverish, more so perhaps than during the Covid supply chain disruptions.
The question is whether the Windows PC market will experience permanent demand destruction. One could imagine that, apart from Apple, PC users might consider cloud-based services sufficient without hardware upgrades. In this case, the AI "disruption" will not only cause a surge in pricing and a transient shift to Macs but it might decrease appetite for PC hardware altogether.
