Apple CEO Tim Cook (right) talking with executives in India
In conjunction with Foxconn’s investment of $1B, Apple begins iPhone production plans in Bengaluru, India with the goal of moving major manufacturing out of China. The country has also attracted investment from Boeing for production processes.
Note: This is the first Market Report we are putting out at Elf. We aim to deliver this weekly every Monday going forward.
Defying expectations, consumers continue to buy with retail sales jumping, despite inflation and interest rate hikes. More insights on consumer spending will be clear when Walmart $WMT and Home Depot $HD post results on Tuesday.
Retail investors pour into equities, while institutional investors remain bearish and dump $19B (over the year so far) into corporate bonds, according to the Financial Times.
Eyes are focused on the Federal Reserve’s Personal Consumption Expenditures (PCE) price index, which shows how closely how quickly prices are rising across the economy. This report comes out Friday morning. The Core PCE is expected to go up 0.4%, just a bit from from December at 0.3%. Prices in January most likely went up 0.5%, according to data compiled by Bloomberg.
Other metrics of interest include the Consumer Price Index (CPI) out last week that showed inflation picked up in January, while cooling only slightly over the year to 6.4%.
On Friday, the Dow Jones and S&P 500 were both down, while the Nasdaq was up. The road has been bumpy in terms of price stability, but strong economic data from jobs to consumer spending have kept a recession at bay.
Both Goldman Sachs and Bank of America analysts expect another rate increase, potentially in March to offset inflation by the Federal Reserve.
The stock and bond market at home will be closed today (Monday) for President's Day. Brick and mortar banks, all government agencies, public libraries and the post office are closed. Most big box retailers and grocery stores will be open.
Upcoming earnings reports this week led by Walmart, also include: Home Depot, Alibaba Keurig, Dr Pepper, Live Nation, Moderna, PG&E, and Warner Bros. Discovery.
Data for this report has been compiled from Yahoo! Finance, WSJ, FactSet, Bloomberg, and the Financial Times.
Image via Apple
Apple is now growing the third leg of its existing audio business — music and podcasts being the first two, via audiobooks. Recently, Apple launched AI-narrative audiobooks via its Apple Books service, first rolling out the text-to-speech AI features for fiction and romance to make “the creation of audiobooks more accessible to all.”
The audiobook market has grown exponentially in the last few years, with 25 percent growth last year, raking in over $1.5B, according to Publisher’s Weekly.
Unlike its typical omnipresent marketing, this launch was quiet. First reported by The Guardian, the new feature was delayed two months due to chaotic news in the tech industry such as Tesla CEO Elon Musk’s acquisition of Twitter, Meta layoffs, and anxieties about job losses through AI such as Chat GPT.
For years, Apple has sold audiobooks through its Apple Books app. By creating this service, Apple shifts from being a reseller to more of a producer. Other tech companies have also been developing audio services, such as Google’s narration and AI efforts and Adobe’s new podcast services that offer AI recording and editing.
Apple has also been in touch with independent publishers, offering to narrate their books and cover production costs, while paying authors royalties. This new feature has significant repercussions in the audiobook industry, which is expected to hit $19.7B by 2028 and potentially $35B by 2030.
This move is expected to ignite debate and invoke ire as many authors and publishers do not like AI narration due to the loss of storytelling ambience and warmth in the voice of the narrator. It may also signify the death of the traditional narrator.
Apple offers two specific genres with this feature — romance and fiction and oddly limited sub-categories ((literary, historical, and women’s fiction are eligible; mysteries and thrillers, and science fiction and fantasy are not currently supported, according to its website).
As a cost-reduction service, this new feature has the potential for significant savings. Currently, developing audiobooks can be both time and cost-intensive. Authors often narrate their books in a process that can take several weeks and cost several thousands of dollars to produce. Through this new AI-narrated service, independent authors and smaller publishers will be able to roll out audiobooks at a significantly lower cost.
The new AI service offers voices that are intelligible but lack human warmth. However, as AI voice technology improves, this sound will likely improve as well.
Apple’s new AI narration service is directly competing with Amazon as Apple has listed its benefits in comparison to Amazon’s Kindle Direct Publishing.
While Apple has forayed into this space, Amazon interestingly has explicitly chosen not to offer AI narration, saying that all audiobooks “must be narrated by a human.” Amazon also dominates the space through its Audible service. Kindle used to offer a text-to-speech feature about a decade ago, but this service was discontinued after copyright issues surfaced.
Apple says that both authors and publishers retain all audiobook rights and can put out other versions if desired.
Spotify has been aiming to dominate the audio sphere for a while now, after its significant investment in podcasts through its acquisitions of Gimlet and Anchor media in addition to its popular streaming services. The company has also been investing in audiobooks. Spotify CEO Daniel Elk has not minced words about his dissatisfaction with Apple over the years where his company sells their audiobooks and offers music through the Spotify app, claiming that the App Store is anti-competitive. Audiobooks are a lucrative business, and now offer more fuel to fire the long-standing feud between the two companies. The company launched audiobooks just in October 2022, planning to push out 300,000 audiobook titles to customers. Spotify has repeated its complaints about Apple’s 30 percent commissions in the App Store and says that these rules and the “cumbersome process” make it harder to sell audiobooks
Apple’s AI narration removes the need for recording in the studio. Nonetheless, results are not instantaneous. It can still take up to two months for the book to be processed and quality checks conducted.
Two partner publishing companies, Draft2Digital and Ingram CoreSource, offer AI voice narration from Apple and authors have to sign up directly with these companies to receive access to the new feature. Currently, pricing models are not available publicly for the cost to produce or have this service. However, the audiobook market has a large consumer base and it is in the best interest of authors to get their books out to larger audiences.
