Nov 4, 2018

Apple is an outlier from the open source boomlet

Illustration: Lazaro Gamio/Axios

A stunning datapoint from Axios' Ina Fried: Apple's iPhone revenue rose by 29% in the most recent quarter, compared to a year previously — even as the total number of iPhones sold was flat.

Why it matters: Technology always plunges in price over time. Except, it seems, if you're Apple.

  • The cheapest Mac Mini was $499 up until this week. Now, it's $799. The rest of the lineup is also seeing price hikes.
  • Apple will no longer report unit sales for the iPhone and Mac, indicating that the company sees more growth from raising prices than it does from selling more gadgets.

Context: The low end of the market, for both phones and computers, is dominated by Alphabet's Android and Chrome. Apple has neither the inclination nor the ability to compete on price against an open-source competitor, so it's not even trying. Instead, it's extracting maximum revenues from its existing customer base.

Open source couldn't be hotter right now: After Microsoft bought GitHub for $7.5 billion, IBM came along to buy Red Hat for $33.4 billion. That's fantastic for Red Hat shareholders, but it doesn't necessarily reflect a hugely strong underlying business.

  • IBM is paying more than 10 times revenues, more than 25 times book value, more than 50 times estimated 2019 earnings, and more than 120 times Red Hat's fully diluted earnings per share over the past 12 months.

The big picture: Open source is of central strategic importance to all tech companies, including Alphabet, IBM and Apple. But the tech giants vary widely in whether and how they decide to build it, buy it or counterprogram against it.

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Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 10 p.m. ET: 1,014,673 — Total deaths: 52,973 — Total recoveries: 210,335Map.
  2. U.S.: Total confirmed cases as of 10 p.m. ET: 244,678 — Total deaths: 5,911 — Total recoveries: 9,058Map.
  3. 2020 updates: The Democratic National Committee said its July convention will be postponed until August because of the coronavirus. A federal judge declined to delay Wisconsin's April 7 primary election.
  4. Jobs latest: Coronavirus unemployment numbers are like a natural disaster hitting every state.
  5. Public health latest: Anthony Fauci called for all states across the U.S. to issue stay-at-home orders. The FDA will allow blood donations from gay men after 3-month waiting period, citing "urgent need."
  6. Business latest: Treasury Secretary Steven Mnuchin said oil companies are eligible for aid from new lending programs the Federal Reserve is setting up, but not direct loans from his department.
  7. U.S.S. Theodore Roosevelt: Navy removes captain of aircraft carrier who sounded alarm about coronavirus.
  8. 1 future thing: In developing countries, consequences of COVID-19 could be deeper and far more difficult to recover from.
  9. What should I do? Answers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk.
  10. Other resources: CDC on how to avoid the virus, what to do if you get it.

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Mark Meadows considers new White House press secretary

Photos: Alyssa Farah, Defense Department; Stephanie Grisham, Alex Wong/Getty Images; Kayleigh McEnany, Scott W. Grau/Icon Sportswire via Getty Images

White House Chief of Staff Mark Meadows has privately discussed bringing on Pentagon spokesperson Alyssa Farah or Trump campaign spokesperson Kayleigh McEnany as a new White House press secretary, two sources familiar with the talks tell Axios.

Why it matters: Meadows' start on Tuesday as Trump's new chief presents a chance to overhaul a press shop that's kept a low profile since President Trump ended the tradition of daily press secretary briefings.

CNN: Fauci advises all states issue stay-at-home orders

Dr. Anthony Fauci listens to President Trump speak during a briefing on April 1. Photo: Win McNamee/Getty Images

Director of the National Institute of Allergy and Infectious Diseases Anthony Fauci recommended on Thursday that all states across the U.S. implement stay-at-home orders, at a CNN town hall.

Why it matters: The recommendation stands in contrast to President Trump's calls for "flexibility." Nearly 4o states have issued stay-at-home orders to promote social distancing as a way to combat the novel coronavirus — but the orders vary in strictness and duration.

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