Apple (AAPL) 2 Feb 232023 Q1 Earnings call transcript

Good day, everyone, and welcome to the Apple Q1 Fiscal Year 2023 Earnings Conference Call. Today's call is being recorded.

And now 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.

Apple's Luca Cook; Maestri. is followed he'll today CFO, by first CEO, and Tim be Speaking After questions from we'll analysts. that, open the call to

without to that the discussion March call I as during usual, December Before expense, our limitation, to expenses, today capital those results revenue, company's statements, weeks. quarter, will consist business the operating spanned and of business gross remind Please potential COVID-XX information XX like future hear other note quarter while and including, the the of income everyone the impact weeks, taxes, forward-looking allocation turning margin, and XX including on operations. has that regarding some over would outlook, Tim, you'll of of the

risks or uncertainties actual our and materially from cause may trends differ involve results forecast. that These to statements

information, Apple's in to press XX-K with forward-looking For of or the along factors to on most statements update the with recently refer their the Form as more which risk Form no annual information obligation X-K Apple filed assumes dates. report today, and the discussed respective speak any please SEC release. filed associated

to I'd for remarks. over the to turn introductory Tim call now like

everyone, afternoon, Good for Tejas. thanks you, Thank us. joining and

quarterly We of in for $XXX.X with we're number Today, revenue Brazil reporting revenue the set December and records markets, Canada, records billion and Indonesia, along Turkey Vietnam, quarter. including all-time India. of a in Mexico, Spain,

confident down do and revenue years, in we a several unforeseen, we year-over-year. every As remain the have and challenging team seen our the was I'm I X% circumstances, over proud and our and a our environment, day. the work incredibly navigated result But mission of way of in past

revenue the factors the that impacted X discuss me performance during our quarter. Let

vast exchange constant basis, the first headwinds, point have of On track. nearly grew impact. had the a basis grown we we year-over-year currency in would majority markets which was a and XXX foreign The

challenges, through December. of and anticipated. Max Because which was to significantly a than ship Pro we had beyond XX constraints, had we lasted less of second iPhone significantly Pro XX causing we November XX iPhone times impacted described and most which XX planned, Pro X supply in these and what supply factor, the we COVID-XX-related extend of update The Max iPhone far Pro iPhone

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was revenue constant a on currency flat. roughly iPhone basis, However,

of lineup The smartphone. can the to capabilities continue pushes astounding customers unprecedented a life the limits what of and battery rave features. iPhone and the health Our and suite do about groundbreaking users camera XX with safety

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environment and opportunity a headwinds. long-term challenging We remain on faced also foreign We confident exchange macroeconomic focused Mac. in for and the

introduced we and Pro MX newest developments silicon, but longest do not life Pro latest models a powered MacBook Mac. our the in the chips ever performance last for Apple so less battery in new energy, Pro Just by Max. unprecedented good enable month, only which gives with is MacBook MX and the These environment

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turn to With that, over I'll it Luca.

Thank good afternoon, you, everyone. Tim, and

last from results. X% mentioned, As factors A for impact year. quarter was revenue $XXX.X down on Tim December significant our a number the of billion, had

First, on a we difficult constant we other did which by in foreign environment, in points. grew nearly so markets. of we And faced majority very a performance currency the revenue fact, basis. words, XXX exchange basis vast In our affected

ago. markedly months Second, past the challenging macroeconomic this quarter XX more environment than was

for XX experienced Third, and iPhone through in significant Max and we Pro November supply Pro shortages iPhone XX December.

the other mentioned we just Tejas beginning impact had XXth call. in of the positive On week the the of that at hand, the quarter the

Products products. active to revenue just in strong who grew customers devices due our base. base proud billion to geographic satisfaction our the down each digits now is active each however, levels all-time high achieved I X and of number At extremely year called segment continued We're of customer product the X% from and billion, This to major the was loyalty devices due of installed in new a have are records and same $XX.X base and category. installed in factors double time, in over last our growth to out. installed

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Company categories, We also sequentially, and due partially was including in gross from offset exchange. basis foreign all-time records revenue quarter points up margin quarter last December XX.X%, Products gross many XX services, to set for Services services Services margin the was points to AppleCare. XX%, and the up impacted XX company both records XXX basis cloud that factors and favorable up And mix, total payment and margin points XX%, App records sequentially. basis music for due was gross gross margin. leverage by same Store

the the below than quarter was slower macro significantly per as $XX earnings of generated pace at in range very respond to beginning billion $XX.X grew cash past actions the expenses share Operating operating the to the strong Diluted guidance $XX Net of we environment. of billion. and we $X.XX, were income we took provided flow a at billion. current and were

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geographic segments. continues iPhones grow nicely active at all-time and all high an is to of across base installed the Importantly,

we levels in installed in particular, and Mexico. had In and emerging India base in record digits, grew switchers double of markets, the

their latest customer the survey with U.S. from our Our indicating continue satisfaction for to customers consumers the family. love Research of iPhone products XX% XX experience of XXX with

$X.X Mac key line our results. drivers was down for were Mac XX% revenue There year-over-year our billion, X expectations. and with in

we of completely launch our the year's First, MX Max. compare MX first Pro against and Pros, with last MacBook notebooks challenging a had reimagined

performance. U.S. we installed same segments, of the very Macs And XXX latest that macro strong Second, consumers however, to see Mac XX% At environment time, the silicon. an we believe the activity exchange of Research. foreign and on Customer upgraded all we significant from base at our to all-time faced impacted headwinds. geographic continue across high reached third, the with very Mac survey based satisfaction remains strong active Apple

XX% was $X.X headwinds. billion, year-over-year items. up This driven FX was revenue iPad significant despite X performance by key

year a this we supply quarter December to we demand. had enough constraints, ago, while significant the during meet experienced First, supply year,

by during and a base we iPad iPad new powered installed high quarter. Pro our number The high, new loyalty of incredible reached and the launched a thanks MX to new all-time chip the Second, customers. iPad the customer

half In the during product. who of iPads customers fact, the new the were to purchased over quarter

billion, X% challenging Wearables, headwinds down $XX.X by a year-over-year FX year-over-year. significant macroeconomic Home and Accessories The environment. was revenue driven was decline and

the to base to quarter. category installed that all-time record of a thanks devices largest our new new had of a smartwatch given set However, the we've our number in in ever customers

the during the In Apple quarter X/X fact, nearly of were an new to customers purchasing Watch product.

for constant record offerings in categories difficult a We and Services a the all-time $XX.X exchange in Services. growing spite year revenue, certain generated digital top we double quarter new digits to Moving and billion environment, XX% foreign during gaming. of of a macroeconomic ago. in and impacting grew Services In advertising December total revenue currency, many on headwinds such as mobile

strength opportunity large continue the that and we to on focused remain long-term We several the ecosystem. reflect this in trends observe our of category,

saw double our we customer our Both grew new Services example, For all-time increased with record. accounts during each the paid accounts engagement digits quarter. setting a and year-over-year, transacting

more months XXX during have services across X up platform, the last more had nearly million alone we nicely. on our what Paid than Xx now the million than We just subscriptions ago. also XXX years XX grow subscriptions to and continued paid

the increase and And reach we offerings. to continue of quality the our improve

available For shopping Pay instance, of countries nearly using of and holiday is number season. Apple during a regions. globally in record-breaking Pay saw millions purchases the Apple to merchants And made XX we now

loyalty as attract active Mexico, foundation grow it double-digit segment, to devices future and emerging customer conditions, and and platform. and during represents billion Vietnam. strong of exceptionally with product levels of every for even our which growth Indonesia, increases our ecosystem, expansion the X high to geographic major Finally, our to macroeconomic base installed over The in a speaks Brazil, satisfaction and difficult from great of India, Thailand markets ability category customers new coming such to our is continues

the our like are to adoption for Essentials, Apple Tap Services. enterprise Pay market. of Turning Financial and to AppleCare, we seeing continued business Services Business Apple

provide not that AppleCare has manage significant iPads sites. Enterprise of process. savings on them assurance Meanwhile, HCA staff timely of ensures across leveraged Services fleet For for the the manufacturing use example, technology, of its provides their has its stay Mars annual to but annual their with support and This refresh Apple Financial Apple latest iPhones. also device expanded only entire deployed to Incorporated Healthcare the for current in

cash billion through now repurchases debt This commercial billion, in billion to the XXX debt included returned billion paper ended quarter maturing $XX program equivalents me us repaid our and We $XX $XXX business shareholders with Let flow. $X.X return generate $X.X and open turn total and and billion dividends to $XXX billion of in cash December market leaving cash securities. with million quarter to the very by in position. our marketable strong capital over as Apple of and We our We $X.X decreased during shares. billion. continues

the As we and of maintain was a net net cash-neutral cash result, at quarter, time. end our $XX becoming over billion goal of the

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

Given quarter. the are and insights from continued the we what in the are world macroeconomic directional impacts revenue providing term, for guidance, based the not are COVID-related not to projecting the that we we around sharing assumption do today worsen some business our near outlook on uncertainty current the but

performance total, from our represents the to to This an as underlying year-over-year December benefited we the In our quarter. expect in acceleration business quarter week. extra revenue December March an quarter similar performance be year-over-year

percentage year-over-year to of expect continue negative X be we will exchange impact Foreign and a a points. headwind,

mobile and gaming. Services, to such face digital year-over-year headwinds continuing macroeconomic expect revenue grow to while advertising For as areas we in

performance December relative performance. we quarter revenue iPhone, year-over-year expect For to quarter our the year-over-year accelerate revenue to March

double compares digits for iPad, expect of both and revenue decline macroeconomic headwinds. and because to year-over-year Mac challenging we product For categories

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

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

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

has Finally, as on today, of payable a February Board shareholders XX, declared stock to of XX, cash record share Directors dividend of common $X.XX our XXXX. of per of XXXX, February

that, With questions. call let's to open the

Thank question, we Operator, [Operator you, first have the Instructions]. please. Luca. may

[Operator Instructions]. Certainly.

from our with ahead UBS. go take David question will first and We Vogt

Luca So Tim, this for maybe well. as and is

that tech the supply the products, builds you might a of seeing so, you maybe sort difficult insulate and these episodic chain or items inventory enterprise flow ultimately talked very but and we normal it's to your as about after returning margins disruptions sort of sheet about need Have back think levels you forward? You still business to of your whether supply November, your October, we're forward affect How does consumer-facing. across do chain how some go your view? And disruptions? of going from and sort changed that cash balance if or

see is most from supply be. disruption now a of This a of David. what is of view, November From Tim, from production need December. did a we supply it chain at where early we And point point we're to through point view,

the And problem so behind us. is

our the on build the in and coming the going assembly in different the from everywhere. world, chain, world just There parts iPhone. X many of terms supply products coming forward countries in In we from countries component are final

optimize to continue optimize it time We'll And continue over so to continue to it improve. change we it. and to

the years time in I been very difficult think from silicon COVID like. of a shortages a chain have it's And I aggregate. supply it, the back X out I we you and -- last resilient pretty the think between had have think up when zoom and sort and

I think points, which in supply the for quarter products was for I In terms quarter, currently. supply one decent most of your we're of on think this

Cross Shannon next Our Suisse. from of Credit question is

the especially on dig I XX.X%, into commentary obviously a guidance, to The is Luca, more at gross to XX.X% quite strong. bit margins. wanted

wondering what's And And follow-up. to there, hedge forward? I'm currency helping other how So think some we going I look do a what and out have about then is then should you assume mix things. as we and

business, leverage to Shannon, the we quarter yes, mix good across with. seasonality favorable but in benefit the because of of the of the I we've December we for also XX%. board. Obviously, reported mean, the had margin have had We start December,

a foreign exchange December basis the basis course, points. foreign In issue points negative an basis, us. it's was a for Of sequential right XXX basis, on And XXX is now. on year-over-year exchange quarter a

a the obviously, So during changed lot the XX environment FX has last months.

expansion, we that season. and will seen holiday XX.X%. we've For doing a of both continue away we're cost is Mix a as categories work the paying move lot a work cost, around on the doing from of March, of XX.X% to lot yes, services and We're margin But off. within to structure, course. help, mix

is weeks, Foreign bit. sequentially, a exchange last negative, weakened a the still mitigating. The points XX of has couple it's about basis dollar but

And on will as through correctly things you so hopefully, position year, a are good we as now, state, But the we in margins. go hopefully, improve. for

And had then, bit with production, can about a What you talk seeing issues the more demand on you've -- China? the you're Tim, obviously, mean I side. but

What through opening, New consumer are are about how And there? your back? position you Year gotten and the Chinese buying? thinking we've the seeing you I'm they wondering, As come just Chinese are

quarter, we last restrictions sort by constraints declined X% of And impacted was places country basis, the despite the COVID on obviously, different but the significant that during a demand basis. throughout about quarter. also throughout on actually currency various talked happened in And a China some supply we -- earlier. constant that the the the reported Shannon, we grew that

December from get to don't the included color traffic earlier. obviously January. a rather, is saw to look compared in did well. And -- provided that followed see And we compared our in you the started or I at the marked want November. through When guidance, demand opening to stores December, But in marked into to in that Luca a change we November. as happening January that We've as change

Morgan Erik is from question of next Stanley. Our Woodring

as the data you've I device one first figure, billion your that's in installed strongest year-over-year. That for those devices million XXX in base X That provided far basically back -- base points. as implies up, new Tim, annual Maybe, base you. installed installed believe, units gain

X cohort questions installed you that my in cohorts, a follow-up. anything And do ramp? guess are: demographic regions the new similar of I for the different look to or two, monetization one, there you or have by past that can this then -- then or either base users And provide iPhone at so year-end? is And might see I you

base as now category. over major billion installed X The set active mentioned. and you devices, is each segment records we Yes. product across And geographic

And so Two we broad-based reported a it one was The XXX change. report you up correct said, I'll over last year-over-year. -- million it's thing to be over X.XX.

it's proud XXX we're million, so And which very of.

We us. also which to of saw markets, several the in strong very emerging is double-digit important

For X examples. Brazil example, India and just as

very So for it very, strong. bodes And future. obviously, well the

rather far later so And just you're quarter? March this year broadly? the by pushing demand you into unpackage perhaps iPhone about obviously, challenges. then the negatively inventory channel iPhone today that upgrades levels Luca, iPhone than of quarter telling And the deferral production December the across seeing quarter me. are And was where Can is what into then, kind the impacted maybe you data for of that's destruction versus and some kind it demand the

quarter. one related as a Not same we on Pro ago, inventory but range given not mind of the below -- iPhone our ended as year in inventory that XX ago supply iPhone, below Pro also point. The as Max. the supply target and our December on quarter December because the year this, take just think levels Erik, challenges in Yes. channel exited I'll a about target range XX issue, the well. we the keep you quarter challenges But obviously iPhone that

hopefully that gives some so flavor of that. And you

have provided to would thinking. the those hard recapture what we're seeing very In people many happened have get know while January, our our -- down. takes of that to what a reports bought exactly get in terms in that included during in it of estimate kind we've the to you It's because quarter. how Luca And color and to

made guess at our it. best And so we've

believe thought terms In is the it the -- we precision, shortages. we not have of grown quarter had we although the would the what that been in constraint not I QX, iPhone estimate, during would of for with sizing supply

that hopefully, little bit color. of a So provides you

from Wells Our Fargo. comes question next Rakers of Aaron

embedding of well, I if just I two line. unpack kind you're the that you're seeing at gross little margin as going any of far bit as guidance around March in first I'm into you good component curious if have the guidance, as this maybe question, quarter. I pricing the point. back a from Pretty specific guess that on this what benefits can. if

Yes.

Of course, with our every structure. cost to components guidance, of portion we obviously, our And big capture a aspect that. are of try

So keep the Shannon, earlier, a XX I basis foreign points. moved a in has year mentioned the lot again, it's -- basis exchange U.S. that I And negative definitely, ago, that's to points, included. mind, versus that Obviously, dollar think FX sequential over on is XX XXX the last months.

to provide to the order in able guidance. of to this So obviously, and kind negative we need to be more FX offsets find

are components a obviously, big that. of so And part

the of how not given as seeing Yes. some Tim, strategy you abilities things the I'm the curious, in perspective, within AI, out about And not see monetization in -- base you far your of whether a AI the bit that subscriber it your is group, kind you're peer role segment, something of from paid strategic we're excel opportunities you're of implementing there. then kind that think and a to as in or particularly Services more whether strategically

literally ours. of crash announced It's with lives. some the And no we that have saved focus lives. in can further major of you a fall terms ECG. these people's a and things is fall the of with than enrich things incredible detection detection in It back customers' ways it Yes. can or mean look how I

do. we so virtually see everything affect an It's not vertical. technology, space horizontal we potential to And enormous this obviously in a a

affect and product every will have. that it so service we every And

of next comes Amit Evercore. from Our question Daryanani

tough happen, to comments have on high-end issues do get it's the down think end when But I production December iPhones earlier the it's impact typically? the has a I the historical see models phone the Just production I that that historically, around. one models. that defer think would I'm or you've tend this perspective, guess ex the the they challenges Or Do Tim, the issue your or grown billion had had production? deferred you quarter based recover typically lower that maybe behavior implied I in production time and so what's they towards on have no? consumer from happens just out this things like first to go you from $X is, being I what want quickly? think a or what sure do they

a because and It's very hard view answer it's that more only real have know in have it. to usually lot to hindsight the you a reasonable of estimate of is you data,

And so that provided. views kind put our in would of That's I what Luca we the say. best color

And so? those ARPU you? do drives the as it think as last you going Is forward? I'm you of X you in forward. know Services go All the I curious, for how maybe Services, be it really what growth over expansion just base? I driven to more I buckets installed several then think forward the you think, had in right. Services, I by go go as more good higher growth about you do your going Or if is about years. think guess But you

of and a things, Amit, call. them few mentioned during of I've the a number there's

markets, always lot and very the in larger that pool customers. us the is gives base addressable for step of growing growing nicely, emerging base first a is a fact it's of growth. The Services Installed is that engine it's the even base. And faster, installed growing installed the

important. So that's incredibly

digits. that second We that of our grew accounts ecosystem and the mentioned both grow. is accounts customers that continues -- double paid one in The are level already our engagement seeing I transacting we of to

very for well accounts over a lot of the that we moved time. have And of future. paid kind transacting to so accounts bodes that And

is improve great The other it's to give aspect which for off the because the to that of a And services. United in continue very I example Apple us of is reach the started primarily our important we quality States. example constantly Pay, the and

markets, XX of to it merchants. taken we've millions Now

for And so time the continue set -- obviously, all payment services new to highs us. are

to promising the at growth. of And Services services our you've think that the we over growth few We're installed and when the as then very look excited. And behavior launched very business. time, of continued seen last also we contributes new it's years, for the our obviously base, over we

question Piper next Kumar comes of Our Harsh Sandler. from

Tim, wanted of sort in in kind you some had lot what relative to presence. quick understand you're countries share seen India. your be revenues? in share have markets. draw China achievable to hoping like making a Seems iPhones Potentially territories, was you've of other And maybe the on had what that, but whether would a question of strides to India. I it's on And emerging experience you've longer or aspirational in where those I and units in your and

strong And digits the a we looking India, year-over-year. at record set quarterly very business and double grew revenue in

very headwinds about. in that's us -- market XXXX. so we that feel we for despite brought Taking store and And that online good step there was and is the a how we've hugely major about back, India is focus. talked performed, the a exciting a We

there. retail Apple bring will We soon

more from There's we're a done people the financing buy. market. trade-ins of affordable to give So been putting a more emphasis options make and to lot options products lot and a on

there's a going there. on And lot so

bear. we've share grew in to have And side. last see We the years are, of we learned what that despite would markets. in scale of we to view bringing China that market a in that supply we but despite wouldn't market front a expect point and difference and world on you essence, I in have around the don't from iPhone shares those exact me, to had on China the challenges X -- how And the taking I quarter I ago think that

Understood. a pricing. question of on And I sort had my theoretical for interesting follow-up,

bunch passed, gauge that you manufacturing the potentially whole are and U.S. demand -- get any a studies that there's now, elasticity of in done other products? territories to somewhat Act in CHIPS your ones of we than the be company happens you increases and the might small have relative expensive has Assuming more to the price

that very take I don't say draw in, terms what that. all necessarily the in TSMC conclusion know point exactly have what will in We the you of the have about part at wouldn't would we be, Arizona. this being experience that. that for but the proud but in I'm in customer That's -- largest we're in same terms cost to of of product. I that, I

comes next Bank from Our America. question Wamsi of Mohan of

I consumer cycles Pro products in spending the a for portfolio. consumer iPhones environment? sustainable? to towards this from segment higher-end choice Or is cycle to And have you move your the done higher do a a compare would of driving do Tim, you past tighter follow-up. the were reverses within versus phenomenal ASPs How few this it you've you years? think job if models non-Pro And think you versus

the Pro the Max -- couldn't and demand. them been has of provide well Pro the extremely done the where until we a -- up had shortage have provide total a couldn't Pro and XX supply point the The XX

And definitely a strong cycle. so Pro it's

I at we for for product September and to think I but themselves. And to that, and announced of product shipping is product. always the good about important one innovations very point there's the are think be now number we most a reasons And feel the where the a demand. in we're speak that the the happy back

environment do you move you've is very ASPs that that Tim, last tough few it of macro in to sort Or happened sustain this sustainable? cited? years that And this higher over the think could has

vehicle want their lives. wouldn't smartphone their and would but to their many smart I -- of and different information the and predict, banking has parts their for people's home payment become us, contacts information iPhone that their and lives, into many health their integral and contains for I so so say the people. It

best they afford stretch can so people the to willing that in get to category. And I really are think

about years of emphasize think the the X from absolute billion Tim, to importance base over you billion If grit And clearly base. Great. should focus the device Okay. installed from X the how installed we of X standpoint, and a or decreasing? the is think installed paying we on overall that of services growth growing to growth increasing frame? base? of relative customers the Is rate about or that the in fast How that penetration or time the penetration services

course, Wamsi, for It's keep we track it's us. Luca. really of that. Yes, important of

of X on then Over to transacting we've as on years, installed accounts. and all, the platform. by our customers base, a the paid first customers moving growing of platform the happens, seen the doubled last That engagement we

over starting to paid pay reasons engaged platform. of markets. for markets. We some in That of So get tends emerging to made see in that we our including services. some for explaining time. on fact And the I earlier, the We've the it to percentage that it the grow developed to was that seen of customers easier it accounts is due

multiple last we in made payment services many lot added the methods countries. services explore because And we've offer example, platform more a years. X of for to over easier For it we've the on

over question, your of means engagement accounts higher paid to So time. percentage of a higher course,

of Our Arete LLP. next question comes from Kramer Research Richard

move on next? Operator, can we to the

we'll Citigroup. from hear Jim Suva of Next,

kind underrepresented India any chain, it speed with overall. And appears little a tremendously of exited country, at earlier risk you're Luca, there. opportunity both We've I out operational just you specific and Tim countries your market mentioned supply but was And higher entering about the India. bit now its transmissions. different build to on Q&A COVID the even shares wondering seen exited we've -- COVID, is we've not looking of if more because a situation we're diversifying also criteria. with

stores see up COVID now stuff. many you additional start it your look just the X or you way stores And complete for now that's challenges at you more on as over supply green we've opening Am look years? a and there, I navigated so adoptions up view chain it's opportunity potentially you Now and past and on prime commentary any the even shoot ever? could of once India opening at is right that, than

other more Yes. that's the even COVID We're bullish bringing there I'm Jim, very side of actually India. on significant there did of and side I'm amount of there. we're energy or other And retail we why India. fairly bullish it, the through online And reason on and well a it. hopefully, investing there. the in the store now bringing on putting

quick India, Services not was challenged And Services, chain that follow-up, mentioned more then expected. my necessarily expected. better supply overall were than as but course, And you specific of had than to

like on advertising So was expected of surprised it the apps on factor what you Or subscriptions? kind or of upside? Was that bridge upside the were being Services? things paid or the better really to monthly Services than what

in saw was services. the, It payment was reflects of It's saw, subscriptions. the Music primarily this We said, you into our Luca. Jim, cloud as -- level in -- good results business very which engagement then very we paid it's the strong. services

expecting records. set all-time had beginning at categories that we quarter. records, new did of of And So a better than they bit were the we a number the

ago. mentioned of during, remarks constant we that services currency, at it that Tim in so top increase year XX% double that digits. a his think, And And was prepared look a I when you grew on

So it's we're seeing. that very sustained growth

Cowen will and next question Krish Our come of from Sankar Company.

X. have I

and their had when mentioned The products biggest where did an follow-up. And macro quick your from macro? businesses, I first across how tighten Luca, impact least softening one, you Tim look the the and and has And where a the service seeing you impact as it consumers the then are you belt, hardware soften, are and impact. seeing you

Probably, Wearables. were the saw most impact and we and We think impact there products some the Mac the in across Services. were ones that on

would those least been in have that numbers. see probably, can And the You iPhone.

PC expecting And in just it. Very the the decline a give to a Got end of expecting think like to about quick Is year PC kind Mac The the this you that? where Tim. industry there on it. a is up? the shipments helpful, can as shipments on any whole relative industry color you follow-up then also. do Got Mac. PC is How

contracting. challenged, The you industry -- as the very say. is is It's industry

play know But the advantage share, is a we want competitive have to a -- Apple reasonable-sized market, how us, over market a and don't out, will have long And we don't I from is with low think though, market. so we this that I silicon. and predict the big I year. run, a have year

we're a so strategically, positioned in think it rough well will little albeit be think the I I market, the in short term. And

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And once your again, this today's conference. do does participation. appreciate conclude We