IT Hardware_ Monthly Data Tracker_ App Store Still Tracking 1 Pt Ahead of MSe; iPhone_NB Builds Largely Unchanged

Summary of Key Points from the Conference Call Industry Overview - Industry: IT Hardware, specifically focusing on the App Store and smartphone demand, particularly iPhone and notebook builds in North America. Core Insights and Arguments 1. App Store Revenue Growth: - App Store net revenues are growing at 9.3% year-over-year (Y/Y) month-to-date (MTD) as of February 17, 2025, which is a deceleration from January's growth of 18% Y/Y, attributed to tougher year-over-year comparisons [2][1] - Major markets like China (+5.2% Y/Y MTD), Japan (+13.3% Y/Y MTD), and the US (+6.6% Y/Y MTD) are all experiencing deceleration compared to January [2][1] - Gaming revenue is declining by 1% Y/Y MTD, contrasting with a 14% growth in January, while non-gaming revenue is growing at 22% Y/Y MTD, indicating a shift in consumer spending [2][1] 2. iPhone Build Forecast: - The forecast for C1Q25 iPhone builds remains unchanged at 48 million units, flat Y/Y, with an expected shipment of 51 million units, aligning closely with the forecast of 50.5 million units [3][1] - Emerging tailwinds for iPhone demand include increased visibility at the assembly side and national subsidies in China, which may lead to upward revisions in iPhone builds [3][1] 3. Notebook ODM Builds: - Notebook ODM builds for C1Q25 are projected at 28.9 million units, reflecting a 1% Y/Y increase, which is 9 points above normal March quarter seasonality [10][1] - This translates to an expected 42.8 million notebook shipments, slightly above the current forecast of 42.5 million units [10][1] 4. Cloud Capex Tracker: - The Cloud Capex Tracker indicates a consistent 32% Y/Y growth for calendar year 2025, unchanged from previous forecasts [8][1] 5. Apple Retail Store Status: - As of February 19, 2025, 522 out of 525 Apple retail stores are open globally, indicating a 99% operational rate [45][1] Additional Important Insights 1. Consumer Electronics Engagement: - There is a notable bifurcation in consumer hardware engagement, with Garmin's MAUs growing by 21% Y/Y, while GoPro, Sonos, and Cricut are seeing declines in MAUs, indicating challenges in the consumer electronics sector [10][1] 2. Job Postings in Consulting: - IBM Consulting job postings have shown a recent uptick, but overall postings are still down 32% from the end of the previous quarter, suggesting a cautious outlook for consulting revenue [10][1] 3. Taiwan Suppliers Monthly Sales: - Sales at Apple's Taiwanese supply chain partners grew by 14.5% Y/Y in January, although this is below the trailing two-year historical seasonality for the month [28][1] 4. iPad Build Estimates: - The forecast for iPad builds in March is estimated at 9.5 million units, which is a 17% Y/Y decline [38][1] 5. Lead Time Tracking for iPhones: - Lead times for the iPhone 16 series are comparable to previous models, indicating stable demand post-launch [60][1] This summary encapsulates the key points from the conference call, highlighting the current state of the IT hardware industry, particularly focusing on Apple's performance and market dynamics.