At the beginning of this year – January 2nd to be exact – Apple revised its earnings guidance, downward. It was the first time in 15 years that the company had to do this.
Tim Cook’s letter to shareholders, which can be found here, focuses a lot on China and its “economic deceleration.” But M.G. Siegler of 500ish Words believes that a greater pivot could be underway. His piece can be found here. It’s a good read.
Firstly, Apple’s current growth period is probably over. And secondly, the company is likely going to need to diversify away from high margin hardware/software sales and continue to grow its Services business (something that Microsoft has, ironically, already done).
Here is an excerpt from M.G. Siegler’s essay (Apple’s Precarious and Pivotal 2019