Apple (AAPL) 28 Apr 222022 Q2 Earnings call transcript

Good day and welcome to the Apple Q2 FY 2022 Earnings Conference Call. Today's call is being recorded. At this time for opening remarks and introductions I would like to turn the call over to Tejas Gala, Director of Investor Relations and Corporate Finance. Please, go ahead.

Thank you. you us. thank and afternoon for joining Good

Please COVID-XX capital Speaking and he'll the statements operating those revenue, margin, expenses, Maestri. be is hear of Apple's the during from After gross materially information will of Cook; statements, and CEO, Tim potential including, forecast. analysts. questions and including results business outlook, involve may followed from and to of and taxes, other we'll today's business the differ actual future first that allocation expense, you'll These impact trends regarding open results uncertainties on some the company's today that operations. to or our call cause note income consist of by that risks forward-looking discussion CFO, Luca limitation, without

with press turn release. to information, respective For annual like to now Form more recently filed SEC most remarks. forward-looking Apple risk for information to and dates. I'd the introductory the XX-K along of any obligation speak to associated please in the Tim as X-K factors which Apple's discussed assumes call refer the their Report with over no the Form on statements filed today, or update

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the want to supply acknowledge Before I seeing disruptions shortages and chain Luca, hand the to to from silicon by war Ukraine. over are driven it from in COVID we the challenges both devastation I

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Thank you, afternoon Tim good and everyone.

financial strong during which $XX.X record the for billion, very report of results We March X% to a are revenue pleased up we year-over-year. set quarter

also We Americas, in Greater set new and quarter in Europe records the March China. in

records product up quarter. And set product of side, March We all-time each active devices, a level and satisfaction sales which billion, revenue supply quarter for year combined of throughout a geographic except iPad, Mac On major and well the X% as customer and Wearables over all ago grew our the $XX.X constrained significantly our and quarter Accessories. in loyalty, reach remains was record. unmatched segments. an of we March for categories This base Home with high helped product iPhone, categories, as performance installed

strong services in an every unfavorable XX% leverage by over A by last sequentially ago, XX.X%, to mix. margin year billion, down of up was foreign XX.X%, seasonal driven a was environment. macroeconomic XX% Company down in drove in for basis and up Our quarter growing records. generated challenging quarter. year-over-year mix. margin margin basis geographic set Wearables operating capped and XX Operating half March $XX favorable Products Mac, results year points of growth different Services of midst and category. income $XXX basis and diluted from Accessories was revenue offset record $X.XX records XX due and a and quarter in These results records partially per iPhone, points flow leverage seasonal income XXX fiscal first were These per revenue share. Home net March billion, record the a Services. loss exchange and points FX. March gross all-time with and cash of We were earnings of the $XX.X record Services a segment of set over billion earnings sequentially, quarter of loss of strong mainly all double-digit $XX.X billion all-time gross gross share XX.X%, sales

year-over-year new and and during survey indicates iPhone iPhone of billion the for constraints. revenue for continued grew the despite to strong revenue our categories records customer We now consumers family. set to XX% of response Let both me each customer $XX.X launch March X% family March into in the get a to XXX March markets of and our Research quarter. more our record Thanks XX supply latest satisfaction US iPhone our detail of SE. from emerging XX the iPhone developed quarter iPhone of quarter

a performance all-time base active high loyalty, installed combined of geographies. sales As a of the level unmatched iPhone new result this across customer reached all with

For Mac, XX% a MX-powered billion demand was of for strong March year-over-year despite by our supply revenue MacBook with growth, record $XX.X driven quarter Pro. constraints

Mac. last shown quarters Silicon earlier, seven in have mentioned investment continued Tim seven ever as best for As the our has clearly Apple the our results innovation been and in Mac quarter

growing helped Mac Our has installed our investment focus base. in drive significant activity on also

the the customers developed quarter and being new product. Customer high upgraders, constraints. year-over-year. our strong with had half Mac our years we installed in to Wearables, up set March to size reached Accessories were of time, the iPad is and X% to $X.X a supply are to continue revenue Wearables who Home in customers our remains half same at to iPad nearly attract the business, a down March three has set during during revenue iPads all-time base and and our March continued quarter fact, while year-over-year quarter doubled for the quarter, new XXX Fortune mainly due record new was Air, a emerging purchasing billion, we we iPad And markets. of the the many customers $X.X as to particular, record billion, an In MX-powered records response purchasing the In XX% quarter of very Wearables. iPad of product. over of lineup both business new new including a

an extend being Watch For its Watch the Apple instance, the Apple continues purchasing with during two-thirds over quarter reach, to to product. of customers new

to Turning Services.

improving and for I mentioned and reached in an up $XX.X and Care XX%, all-time App payment Music, reflect momentum our and we billion, quarter continued These impact investment advertising and results records of Store, portfolio seeing the our records many March positive for all-time As record fronts. the services. video, that the expanding revenue of Cloud Services on impressive we're Apple Services with

geographic all-time continued segment an installed our category. product First, has reaching base to grow, and major high across each

customer engagement with Next, services. our we increased continue to see

subscriptions the Pros to deliver allows kiosks latest Apple This deployment In each XX the with to to Police Force March, Our first drop. all-time than safety employees. very during and for entire organizations to services. more for Also, million month, iPhone for quarter And and fleet check-in road which technologies, accounts enterprise the services airport offerings service and bag breadth critical continue information is months paid community. customers all issued Tim government began to we platform, commercial of many the access subscriptions services million than transacting public now with and launching before, In current accounts, alone. up last the replace conventional across to to and officers of highlighted officer. accounts new market, completed more XXX world's vehicles, geographic on their the last XXX XX paid the self complement as We innovative the subscriptions, improve to our every strong quality Also, finally, Airlines the paid faster in businesses while the CarPlay reached self-service of the March show enhance to across on faster to paid highs the our during Australia growth. segment. and Western continue Alaska turn continued have passenger the iPad

help availability We also every unveiled Apple a the cycle. Business businesses general US, their the life new of adding to device subscription Apple Essentials in manage aspect designed services of small

Let cash me position. our now turn to

of billion. with we increasing us securities. in the and maturing debt, $XXX repaid commercial $X As ended billion cash we flow, strong $X.X total generate leaving continue quarter in debt cash by paper $XXX billion very with We billion, to while marketable

net in shares. XXX billion March returned of billion $XX at during As result, quarter. to shareholders, quarter. through of included was $X.X a open and equivalents dividends market the the the We $XX billion $XX.X million and nearly end cash This billion repurchases Apple

shares X We an the million our ASR. additional also settlement XXth in retired final of

Given the we continue goal as for for share dividend the continued now business Board dividend a future, confidence an $XX we going to to net in increases additional our has maintain annual today by share raising getting of we our We're into have X% authorized and billion in and also neutral, our the to overtime. repurchases, plan $X.XX forward. cash our

As which referred information to into at review June the we includes that beginning outlook of like the ahead the the to move forward-looking our quarter, call. of Tejas types I'd

in quarter. for do will industry-wide ability revenue disruptions sharing COVID-related the providing products. continued that to Given during the shortages factors. customer performance from the believe June uncertainty are around world by the are not We the impacts be worsen business not our assumption quarter we COVID-related some the to our our constraints silicon for by impacting based demand insights, a the are we Supply meet on what directional guidance, impacted today our near-term, number but are and projecting caused revenue year-over-year current of we

headwind We $X customer are March rate. range during some disruptions to to substantially the respect of nearly The it be exchange, our With expect than to constraints is foreign expect to point these COVID-related we experienced in we China. to $X on growth the which XXX having demand in billion also larger be year-over-year billion what basis quarter. impact a

will XXX points. rate all Additionally, March our impact the by Russia basis year-over-year sales during in growth we quarter. This paused, approximately

but to double-digits, we performance, our I to Specifically described. from continue decelerate expect due of some Services, related factors the March to grow quarter just to

to expect between We margin XX% gross XX%. be and

$XX.X be We between expect and billion to OpEx billion. $XX.X

negative OI&E rate excluding be around million the be impact mark-to-market expect $XXX of around XX%. from our to We to tax any minority investments potential and

increase the I May record of shareholders call share of Xth, reflecting questions. has Finally, to declared that, on XXXX. May of per earlier, Directors let's common XXXX Board of to XXth payable With of the dividend cash our today stock, open dividend as a mentioned $X.XX

the Thank you, limit two questions. Luca. we We have may please? ask you to that yourself question, first Operator,

question first our take We'll Morgan Absolutely. Katy Stanley. with from Huberty

you. that's questions, business going of quarter. demand on What metrics the your on Congrats as is in you'll impact stock everything I to inflation. on the then, the thinking product some external start follow-up. your you the macro-related interest business? of just internal we Thank to you're rates, And at A on more consumer see are to level volatility, watching rising given how couple side Yes. spending, market, first the about see understand macro whether have or either ultimately a particularly market

point It and evident quarter our margin our obviously this OpEx well. sales in or we Tim. it in last Katy, that our was for guidance is quarter hi, it's quarter last are view, We're From closely. is gave seeing daily very in gross and monitoring of inflation. an the inflation Luca assumed as

of seeing. I we're inflation seeing some definitely everybody think So is level that

follow-up ability to the to how influences their thinking are how as that And are just your a same impact purchase business level? consumers at that whether in you it and about the might – how

focus and speaking that frankly on right of side. closely our now is – sort the we've Well we're supply main monitoring but

what about we an And in supply we demand? China, it from And an and think to how Okay. your Thank be relates on impact impacted? should on products as expect portfolio you. to impact in should most that lockdowns

Yes. Good question.

finished, not so the that yet. in QX restrictions quarter the had started China just For we

if the looking we on significantly And range disruptions; is shortages. were causes restarted. calls the two $X be experienced $X about and QX, assembly almost primarily with than centered And of the supply on the They see affected will issue what Shanghai December industry-wide talked One quarter. COVID-related We've shortages – in these to constraints. have the front, the And the of did are – constraints They that ahead, there's by driven we you continue. lower billion all constraints. the to that factories supply had of now constraints legacy the around industry-wide during we were so nodes. silicon have the specifically, a final silicon But corridor. I And previous billion. positive estimated

range And the reflects the We're range to back case billion and of so decreased last few days. that's over $X reported that been – count billion various Shanghai up the getting $X has running. ramps encouraged in the also COVID

for there. so there's reason – there's And optimism some

Pretty the amazing all the has how you. cross currents. the Thank again on navigated team Congrats quarter.

so Thanks much.

please. we Can have next a Katy. question you, Thank

with you. We'll question Amit take Thank from next Daryanani our Evercore.

Good have my I afternoon. I Thanks for as questions. taking guess two well.

But I'm you on I your all the that even terms are just you you China vectors consumer Russia, grew geographic Europe I muted impact difficult And effect some that's to hoping seeing touched XX%, Ukraine more had spillover was a but and First growth if of fairly think you spend saw. compares little know well and if side from or on growth Europe may. out I really macro in would call of bit curious the XX%. Americas China. anything much in

happened understand us Just geographically help there. what

in during Americas, strong board spite the course up paused was as the for said XX% quarter there. very the of So you really good a you month the quarter in Russia. know in Europe, X% We that we sales grew we had a happy as of Amit, of us. again March, across our very fact

our a So for sales of for really of we number countries to But European had there results quarter. Western us. in particularly well an Europe a the did month impact

an the us. for impact every this quarter year did launched later geographic record timing different quarter than for year in ago a on expectations. iPhone for results China again affected segment than Keep the was the a this the was much we we us quarter ago for year. launch this better expectations. and year product us And so in had line our because a our versus Americas pretty with March mind was good it a very March

Asia of the average year were during happened constant in the some ago. have Japan fill channel March for terms. So and in line currency Pacific foreign by would new products exchange. Japan company the with affected quarter a grown

that against as currencies. again difference foreign was well Asia timing Keep the in mind then again constraints affected the had supply a Pacific been the the And with our would this launch very most obviously appreciating we the exchange by the during better dollar quarter supply felt world. Overall good about iPhone the in have we constraints. made without for results performance around difference. the

If How out, chain the $X you you think I up could to demand on about. you by product come categories most destroyed on demand which this sense billion the this just at And deferred that's product cycle impact some then Do of demand follow versus a point versus out there about supply in because do essentially you is the is are deferred billion talked that's have to year? that $X or folks that's a that impacted going this year think soon demand destroyed not? front?

not very that that -- And terms difficult whether we that recapturable share. percentage that will internally but is that something percentage most demand to It needs likely something estimate. we of not percentage or we it's obviously, can do there's try where that And not product plan ratio to is a to in We quickly. somebody order is it of of of a the believe or categories. affect it's and that in recapture whether it

you. Got it. Thank

Amit. we Can the please. Thanks have question next

question Caso Raymond next We'll take from with our James. Chris

facilities range the of facilities billion of it's reopening of Also second mainly the Thank you at new a said then in evening. Yes. China then would if the the as constraints to worse the know supply component during and be And constraints into good wanted billion point you. the to as the the things get you to open things of And obviously the forward constraints you side? you the expect dig is constraints guess predict into year. that in component bit. are just launch go some to one go on hopefully $X only products. of I on second half $X the reflects quarter. But don't are I still tough the half that

question it's Chris unannounced to answer Yes. hard about a products.

try to not the— so But that. And I'll do

yes. products all For

the assembly The $X had final of it with have mentioned of X% area. to for But that's range that billion you plants in we various of estimated. if all $X them billion restarted working local as to good -- the to Shanghai simply is have that And look news corridor these. we almost predict. planned is officials. the we've ramps I difficult this as And Kobi at some X%

For sure for sure.

up have of that? on your different follow-up either that costs but possible new affecting have semiconductor a many inflation As prices regarding because planning going costs to get Obviously some and with to of or I deal than in margins? some the through perhaps in cost it. comments been it And And side of is also it's with been going for your gross that it past. up the up nodes wanted component on follow the reasons Apple to how areas. dealing to in raising specifically different additional is How higher been Apple process without is has for product then you going

Well, said are guidance thinking are we've that current last for listed obviously some falling in current the put costs and component There the announced. our ones of that we've in the results is Luca rising. what that that earlier. you are And quarter quarter

moving direction. same of in them are not all so the And

a to what environment. And is really we I challenging try think reasonable these. net to currently so navigating And the of manage the we're job doing a

Chris. question have Can Thanks we the please? next

Vogt David our from question take next We'll you. Thank with UBS.

then taking of how for kind $X question. dig it $X we on the should the there line sense Thank maybe some And in to each impacts? bit different maybe to versus disruption Great. And resources would you similar is the expect opportunity and limit I pro to billion. us the gave follow-up. my it In iPad rata then a want an the quick past a billion impact product a you I maybe product to of have for affect to little line? the guys on have reallocate lines. And iPhone just

most of product effect do And the of obviously categories. we the to we the look affect to user. will on will optimization can It any that minimize do kind

Great. a follow-up. And as maybe just then

out you potential in anything outside points issues share You sort the basis perspective sort of be us be of you is would to geographies of from ordinary demand demand sort at China the Western when the the the would that be or COVID-related that of it's demand point can seeing product and of talked cycle. at from you. you Russia. with where Thank Europe and lack the XXX there of it other seems whether this in may at think taking you're disruptions about But US a or in look that

had with QX. think you where the therefore We new when comp launched particularly And that against were about the happy at we timing quarter naturally the place growth iPhone it ago in last year a on QX different we very curve. the was is because quarter, going in the on different launches product

difficult it was so, very comp. a And

of last as US, Luca geography the And quite did it. were within quarter. with major And said, course, the the well is so we geography there. Americas pleased And

strong quite US so the was And quarter. last

Thank you.

David. we question have Can please? Thanks, the next

our next We'll with Suva Citigroup. Jim take question from

the ordering more so turmoil navigating whether you much because all it internally, trade great all you $X to holding just-in-time and and world, and constraints job outsourcing several chips? to Thank issues challenges Or be someday the like company through past do in right to your years society supply to chain way sell. When nice the billion the buffer the supply hopefully at away start wars, COVID, entire be in of albeit Tim outages, now you inventory billion to able shipping that. the do actually be hopefully power that reconsider it'd we these and has have done across consider you. $X of past do all and letting go your get a

we should to maybe better hopefully think So in or place when chips control inventory today? about the consider even own doing by or more, them more your buffer from do how your strategically you a holding outsourcing chips world is own

of that to Well, I know are. as forward I'm looking all day you

is supply global. Our chain truly

products the made zoom look here. And be the even more lot are you of silicon see to think continue the within more that eloquently resilient something think piece out day is and top think chain that struggling managing been we've when -- and make a We done the how everybody of I the I here at it. it's kind changes. probably We'll so do had talked we the learn the clearly optimizing. we are with chips and up about, in And And And with. every of done to shortage has through really you doing look we've COVID issue good supply is back everywhere. produced U.S. I very But environment as job a

And so changes and we some go, we're -- but we making don't we a as are have tenure. learning

business that bet change, we a should that And we're this learn the inventory. of we hold so, you you something want to don't can to ton that that. doing In degree

And so things to cycle and take buffer need and to inventory strategic forth. and you want very do to so on in so places work forth interruptions quickly times where for you

are. us where really today's those we're places to And for about constantly have it's so buffer possible on thinking world not In silicon.

into assembly that try we and rolls possible. silicon fab plant quickly short final as the very, today as so, a And time to very off a and make it's

of that your for kind talking year, then And of kind actually now. hearing of maybe quick multiple XXXX go going half to chain from quarters my equilibrium this time into suppliers period? for closer been about it follow-up. is issues some you supply Are We've or later

of And in – the for industry be talking in. strong for in I don't also even an – in entails is the the how don't that to are that. different assume. wouldn't proclaim That silicon to I – heavily I economies whole particular by expert because the that, knowing markets. influenced industries predict supply I about you're demand the are want shortage for worldwide Yeah. how and we're outside the

what so of do we're is answered. outcomes. very is trying think And – are levels I of focused there that doing on well And how varying to question regardless

entire to and congratulations Thank you. And team. you your

much. so Thanks

next question, have please. Thanks, Jim. Can we the

from Chatterjee JPMorgan. our Samik take with next We'll question

more to and taking two my question the well. here. stick results on Hi. I'll questions Thanks micro for as congrats level

launched. quick the by I that you. hoping terms for North cycles? that you you previous And have what of Tim product just demand with geography? has SE Firstly, product Thank momentum Luca? talked a compare current of America iPhone you past about three iPhone in seeing you terms in demand the to was seeing the what SE been could region I demand you're the you think largest follow-up terms the I in in of Particularly are

of data would get our we don't that view sensitive be We granularity to Yeah. love it to because have. to level that competitors

on punt out those going And when the I that and we $XXX were products half of a could the about not the good zoom that, cycle. look results. powered the family iPhone, be for and very total would the you And just results we've us XX this happier revenues that so billion with for overall as and products seen we've the question. that have I'm strength those very, it's at answering and say iPhone, to really, we line which given on feel had iPhone first

pieces there tough range. for terms of for around we of for can my settling sort there of lot a upside? a have. Luca is opportunity an the in growth pieces on take seeing And there is settling of are range moving seeing longer – of term, beneath a more We're gross understand of are are the Luca. I that. sort scale that the And that they Services for sort Services this or But sort business they comps XX% also good as there rate you this moving follow-up there margins

momentum was almost ago. feel just billion looking $XX about essentially run our I four we we had for great of business. Well what years Services This absolute double is really the here. numbers the rate at

well So we've Services. with really done really,

We a variety of of momentum have reasons. for lot a

installed that is continues of devices the fact base one our active first The to grow nicely. very

is big a And obviously so our Services engine for business. that

on level that of thing is continues platform our second we The grow. to that the engagement see

amount We our the of XXX absolute on an It's of more more million. XXX is paid accounts, accounts paying XX increase platform The subscriptions more transacting subscriptions. last impressive million with accounts, in months pretty alone. have

this as seen that believe new course, So plan features and you to a customers few is and add you've that over we services we've can growth. the And lot added great last would years, tell our new we that of love. of services new

a during think growth The can that's momentum. especially so then COVID great we great because and gone -- through reopenings change rates absolute so on. of we've a bit, cycles And some lockdowns and

so can And be deceiving. the sometimes comps a bit

us that the from our of looking Services satisfy are to the to seen customers, and We to of lens the billion the served quality well, $XX months, last XX margin. because the of in the accretive portfolio, improving continuing it obviously adding has are at And services company we've revenue. margins you've very generated

it So that than we good the described. for in mentioned some the XX% Services rate we've in that growth the to the we feel be I prepared we about expect less good, for of June reasons remarks March I feel that the business. reported my quarter,

dollar being course Of our the at issue in foreign paused, exchange point. of with this strong Russia. we sales course, And is an

general, look to records in all-time of categories. take account. we each we into But and when records set our So the one need for we that quarterly board, across

Thank you.

next Thanks, Samik. question please. Can we have the

from Cowen and next question our Krish with take Sankar We'll Company.

the I have strong for question taking and I do my congrats Thanks two Hi. questions results. Yeah. apologize. on really and too

large the one curious, compared inventory kind to which And kind constraint is and to down deal the more is have true last of and constraints. And Apple else amount quarters a China think being the supply just there kind tied buffer semis, you're better you billion had on also do supply spoke supply I the then of shutdowns. June a if The impacted to going read now on the understand follow-up. I supply that And to you revenue. is about kind or revenue. based up $X a tried constraints legacy chain something on? contains quarter I semis three first of year-over-year the I'm guidance you supply implies Luca, of revenue got $X billion of of is whatever used had a

What silicon now. the change that obviously $X quarters. March happened of quarter, the When seeing we're we it's silicon example are we Recently, for shortages. it's range China this but the the were has $X billion that to COVID during out restrictions only right during limited over constraints billion, had to not in has giving

of So the constraints they additional point that seeing are this because situation. are different. we at COVID There's

that is difference there. it's So -- fundamental the

helpful. have a actually or And a China, App that? the too in places with actually time Very it. Stores you your on frame to as quick Got follow-up short a is like especially it. business Got it then make inflect positively, seen call shutdowns, judgment Services or the

think, March. China Yes, early restrictions very end started it's I to of in at tell. The the

very early So, to it's very, tell.

it. Got much. very Got Thank you you Luca. Thank it.

the Can Krish. have please? next Thanks, question, we

We'll America. next of Wamsi question Bank Mohan take our with from

tell Can for grow quarter expect a the on a just thanks and quarter-on-quarter those also to if basis be share these if impact gave the I a quarter-on-quarter wondering supply quarter-on-quarter color to Luca, year-on-year was that But FX you Thank guidance. Yes. basis. June a any you And headwind overall I could year-on-year around on you are on revenue impacts you the you. And on impact in the impacts is and to revenue a much have also clear if basis incremental incremental chain a a on basis? how us follow-up. Russia basis.

caused said, disruptions is supply that what silicon during said shortages. revenue the by And repeat having the we COVID-related as specific the the I And number. to -- constraints a and what guiding is to by Well, remarks, just are prepared constraints. but we're that not we're creating

than we've the billion March range what $X billion. the quarter. of me them had is Again, March disruptions quarter. We did COVID-related to the to during affect the $X be larger not repeat in expect substantially This let

during exchange, we need quarter. you March XXX to mind. it respect headwind. about that expect keep was With So basis to to basis points the be in It nearly XXX points foreign headwind

reflects that quarter. basis in points, a impact we the months paused basis the that on is of three Russia year-over-year For of XXX sales We Russia, March. approximately at beginning said the the

the quarter. on was it March So a impact partial

obviously, top that is mentioned keep side services a iPhone number demand and iPhones, during so March is the in Tim the look in the six factor sequential incremental quarter. having urban Australia, our an to a top at world, around five in China United in We the pretty the year. results solid. States family I the of would of incredible say so The both had smartphones has forth. on on it's and are mind. So, the we on for strong and basis, top here four a the times top-selling XX top -- five when the we've positive in six is Japan, products really models

for the the those success. So as And a Mac been website, you can our as iPad constrained the know because the and iPhone for And good most global demand They've is from tell has several growing been as know constrained quarters, double Services business truly even and XX today. is digits. of models you very products. are you

and for June forward. gives that's quarter going what us the So confidence

place follow-up, in you're really your from same enviable being At net neutral generating flow objective. the Tim cash you're you, far pretty a a And of if Luca. Thank cash year. time, Okay. amount significant could I every of

not in health do Apple or at look stock Netflix of been this And has the such strategy successful past, your area time but in fitness to hand Why just right the there the or of Apple maybe on is return synergies an assets perhaps that with of of capital both? billion or have space, other back assets a instead the content is $XX a Teladoc buying market area. in your are the lot X% for So extremely arguably [indiscernible] care program like lot cap. the

We were companies today and would larger strategic. We're doing great but opportunity and of discount that something looking to look. itself. always -- don't we'll if do the continue that lot IP we smaller presents But acquire for a And and we for continue acquire we something talent. either only to

phone, we're -- through want so you I but go the to with on always my don't but And list looking.

Thanks.

Great. next question Thanks please? the have Wamsi. Can we

question take from next our Kyle McNealy with We'll Jefferies.

Mac. one longer way, quarter by with much now with now out sure. Mac's is not ordered Hi, the We're today shipping some noticing available for exciting products the thanks results This June. until that times are regarding but there's very for question. the coming many for some lead Great the

chain? week? catch by a Just real product wanted expect And the up just insight tightness you versus is do on results within you your think the likely how to get in with supply driven you is the times that that the March strong conditions much obvious and might of sellout back and follow-on get when launch lead to Mac

working we're want Macs too. We've new Well, we to got hard. customers of that get lots the

we're of And we've -- so shortage, And remedy we shortage we're disruptions on would really that so COVID difficult don't be before. the can answer. silicon out might I not be working combination hard about them. and when a are the of silicon forecasting that, of talked the the we They that a result when

I think a it is I of kind the of transitory hope piece COVID issue.

better would would so it over time. get hope And I that

Thanks Great. a lot.

Yeah.

Kyle. Thanks please? question we Great. the have Can next

Cleveland with you. Bollin our next from Research. take Thank Ben We’ll question

question. for Thanks taking everyone. afternoon, Good the

a the evolved what everything opportunity of geographic have production consumer Jim share community? I contribution think And footprint? earlier you Thank you. to going asked and been respect freight has has on, evolution with happened as that question of strategy have strategy. of some late might changes about any since might curious seen your how I late? some as had of the the And purely one about to of term for services. could maybe as on The Luca, then is was you hoping you think first bit on is a how versus much enterprise? enterprise you little I the perspective a follow-up, Tim And services Suva longer was of monetize how

we interesting is good Apple for we call have market support for market recently, general us the do essentially we and effort in Obviously, service we enterprise of So device a the sell support it the But in appreciate services United this Ben in business is small value will we and we Very of grow. here States lot small to we small to focus consumers. and owners management provide new do side, and which today. that think for opportunity we as us. which a to appreciate. subscription businesses services We understand know putting medium-sized opportunities launched example, terms the where Business Essentials a we enterprise we're and on companies vast to is final of great already what fact majority Care and enterprises on the course, XX/X very believe a for in Apple really of

is view. point and a both availability from point you up an brought today challenge Ben, Freight an in of huge view freight. from of inflationary

that now air. we'll focus do talking much the efficiently. we so -- the Over the fundamental And do and I And about that. any right that hope way freight that rates reset more ocean time, on can would is to both moving I'm some customers both and

details because come to moves and want making I And I of sensitive and under information, so of tweaks here terms constantly both COVID And due the inflationary reasons we partly there. as optimize the would some we it making well guess. constantly are of to in geo to but them current kind significant other some as be pressure have go to into we're view of production environment. those in don't And

you both. Thank

you. Thank

two today. Thank the you These can replay available Josh on XXX-XXX-XXXX Time P.M. apple.com/investor XXXXXXX. at replay numbers available webcast approximately code are weeks or questions contact A Ben. questions XXX-XXX-XXXX. Rosenstock of as Pacific additional Apple me be Please a you, for Members can contact on enter again for X the analysts will additional and telephone. press confirmation call at us. telephone in Thank by Podcast replays XXX-XXX-XXXX. via will The today's of be with joining Financial XXX-XXX-XXXX. for with

your We This concludes today's conference. appreciate participation.