I want to go to the morning evaluation
where you give me a hefty sum of the parts.
You've got the service sector to 1.5 trillion of 4 trillion, which is $257
per share. What's the total sum of the parts?
Is it above 257? 12 months out?
Yeah, it's closer to 300. Some in the you just can't go to 5
trillion because you don't want to, you know, be inflammatory.
The big thing is really the services is going to be the key over the next year.
The rerating that we're going to see in app I think numbers moving higher is
going to be services driven and I think that's where the 1.5 to 1.6 trillion
comes in. But I do think we're starting to happen
now in the space with John to in terms of like some of the China issues, you're
now seeing unit growth come up. ASP is going up to me right now in
Cupertino. They're popping the champagne, getting
ready for a phenomenal year ahead. Buried in the CFA is is a is a barbell
and one is are you running is a revenue growth story or are you running as a
profit making story to me apples almost out of Graham Dot and Cogdell they're
running this thing for profit right and that's how that's how to do jobs that is
how they done it and I but I think the difference too to your point it's the
modernization the install base is unparalleled 2 billion iOS devices so
now are in my house continue and look in near one of the cross-selling
opportunities for customers. And the thing is is that now what we're
starting to happen is that if you look at the services piece and you look at
the penetration, the average Apple customer is still 20 to 25% penetrated.
From a services perspective, that's going to continue to up.
And then I believe the big thing here is the App Store that I think they
introduce over the next year. That's going to be the new shiny object.
Okay. Before we get to the new shiny object,
let's talk about the old shiny object, the iPhone.
If I told you where revenue was and where it would be at the start of the
year for the end of the year, would you have said the stock was up 52% year to
date? Yes.
Okay. So what I'd say is that part has
definitely been an upside surprise in terms of where the stock I think the
difference it really it rests on the services business and what I believe is
the margin story. So even though from a unit perspective,
there have been some choppiness over the last quarter or two, if you look at the
margins are up. I mean, so they've been able to expand
gross margins in this environment, which, you know, we've talked about this
in the show, but that just shows that they have control over their ecosystem.
From a chip perspective, that's been a key to the board.
You think they can go back to growth but still retain a growth multiple?
I think they this past year they were able to go X growth and get to growth
multiple this next year. The renaissance of growth happens in
Cupertino on services back double digit unit from an iPhone unit perspective
continues to do as a single digit. And the China story despite all the
worries, despite many yelling fire in a crowded theater, we see we're going to
see china growth.
