Reversing 'brain drain' should be top priority for new Apple CEO Ternus, says Deepwater's Munster

Summary

Gene Munster discusses Apple under new CEO Mike Ternus and argues the company has a strong hand from upcoming hardware, a foldable iPhone pricing strategy, and the Siri AI rollout. He expects Apple to exceed estimates because of subscription-based iPhone pricing, high upgrade rates, and a split upgrade cycle. Munster also sees AI-empowered apps as a services catalyst around the next WWDC, while employee retention and brain drain remain Ternus's top challenge.

• Apple rose on Ternus's first day after his employee letter teased future products.
• Munster says the foldable iPhone is more about raising blended iPhone prices than unit volumes.
• High subscription penetration and 90%+ upgrade rates cushion iPhone price increases.
• Apple is positioned to exceed December and June quarter estimates on a split upgrade cycle.
• Siri AI is viewed as a potential positive if it rolls out well in the US this year.
• Next WWDC could focus on AI-empowered apps, with App Store revenue over a third of services revenue.
• Munster names employee retention as Ternus's number one challenge, noting OpenAI poached about 400 Apple employees.