Apple Inc.
AAPLNASDAQ · Large Cap · Consumer Electronics
7.4/ 10 · Buy
§ 1 · Thesis
Services moat continues to compound on a healthy hardware base.
Apple's services segment grew 16.3% YoY to $24.2B, now 28% of total revenue3, with gross margin expanding 280 basis points to 74.0%4. The services flywheel is increasingly compounding on the installed base rather than on net-new hardware units7.
Cross-check: The 16.3% YoY services figure reconciles to 10-Q § Item 1, and is corroborated by the FY24 Q3 earnings transcript.
§ 2 · Segment trajectory
| Segment | FY23 | FY24E | YoY | Mix |
|---|---|---|---|---|
| iPhone | 200.6 | 201.9 | +0.6% | 52% |
| Services | 85.2 | 99.1 | +16.3% | 26% |
| Mac | 29.4 | 29.9 | +1.7% | 8% |
| iPad | 28.3 | 25.1 | −11.3% | 7% |
| Wearables & Other | 39.8 | 37.0 | −7.0% | 7% |
§ 3 · Key risks
Two material risks dominate. Antitrust: the DOJ's pending action targets the App Store revenue model directly22; remedy outcomes could compress services margin by 200–400 bps in the bear case24. China concentration: Greater China still represents 17% of revenue30, with iPhone unit softness in the region partially offset by services subscription growth33.