Apple Inc.
Information Technology · Technology Hardware, Storage & Peripherals
Structural read: Apple is the only vertically integrated stack in consumer compute - silicon (M/A/S/R series), OS, distribution, payments, and identity all in one P&L. Services run at ~74% gross margin vs hardware ~37%, and the mix has drifted from 16% (2018) to ~28% of revenue (TTM).
Apple Intelligence routes most inference on-device via the Neural Engine, with Private Cloud Compute for heavier prompts and a ChatGPT fallback - making AAPL the largest distributor of edge-AI inference by unit volume.
- Services ~$110B run-rate at ~74% GM; >1B paid subs across the base
- Installed base 2.35B+ active devices; iPhone replacement cycle elongating but ASPs rising (Pro/Pro Max mix)
- Apple Silicon owns the M-series Mac stack end-to-end; A-series + Neural Engine = on-device AI distribution moat $NVDA can't touch on phones
- ~$110B/yr buyback + dividend; net cash target zero = mechanical EPS tailwind
- Vision Pro is an optionality call on spatial compute, not modeled into the multiple
- iPhone unit growth flat-to-negative since FY22; China revenue −13% YoY most recent print on $HWAWEI Mate share gains
- Google TAC ($20-26B/yr, ~17-22% of Services op income) at risk from DOJ search remedy
- App Store 30% take rate under fire (EU DMA, Epic, Korea); structural Services GM ceiling
- Apple Intelligence rollout slipped on Siri LLM; perception that $AAPL is a fast-follower not a frontier lab
- 33x fwd P/E vs MSFT 32x / GOOGL 22x - priced for re-acceleration that hasn't printed
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