Apple management reviews

Tim Cook

1. Apple Intelligence:

• Tim Cook said he is very excited about the launch of Apple Intelligence, a technology that will significantly improve the user experience. He stressed that Apple Intelligence will gradually launch more features and language versions over the next year, which is expected to drive users' demand to upgrade devices.

• Cook also noted that Apple will continue to make significant investments in AI and machine learning to fully tap the potential of this technology and improve the quality of life for users.

2. iPhone 15 series performance:

• The iPhone 15 series outperformed the iPhone 14 series, which shows the positive response of the market to the new features. Cook is optimistic about the future upgrade cycle and believes that Apple Intelligence will be an important driving force for users to upgrade.

3. Chinese market:

• Despite intense competition and macroeconomic challenges in the Chinese market, the iPhone's installed base reached a new high. Cook remains confident in the long-term opportunities in the Chinese market and said Apple will continue to expand its business in the Chinese market.

4. Innovation and future outlook:

• Cook emphasized Apple's continued commitment to innovation, particularly in terms of privacy, security, and environmental protection. He mentioned that Apple's data centers already use 100% renewable energy and will continue to make more efforts to protect the environment.

Luca Maestri

1. Financial Expectations:

• Maestri expects head office revenue to grow year-on-year in the fourth quarter of 2024, at a rate similar to that of the third quarter. Service revenue is expected to continue to grow at a double-digit rate.

• Fourth-quarter gross margin is expected to be between 45.5% and 46.5%, and operating expenses between $14.2 billion and $14.4 billion. The foreign exchange rate remains a negative factor and is expected to have a negative impact on earnings of about 1.5 percent.

2. Growth in the service business:

• Maestri stated that the strong growth in the service business was due to the expansion of the user base and increased user engagement. The double-digit growth of paid subscribers provides a solid foundation for the service business.

• Apple will continue to invest in content and features on services such as Apple TV+, Apple Arcade, and Apple Music to maintain a high level of user engagement and satisfaction.

3. Capital return plan:

• Maestri highlighted that Apple returned more than $32 billion to shareholders during the quarter, including $3.9 billion in dividends and $2.6 billion in share buybacks.

• The company's net cash balance of $52 billion indicates a strong financial position and capital management capabilities.

4. Product portfolio and gross profit margin:

• Maestri mentioned that the gross margin of a product is greatly influenced by the product portfolio. Gross margin fluctuated with the launch of new iPads and other products, but remained high overall.

• Product gross margins are expected to continue to be affected by changes in exchange rates and commodity prices over the next few quarters, but the company will maintain stable financial performance by optimizing its product portfolio and cost management.