First off, hats off to you—your write-ups are always a masterclass in cutting through the hype, and this one’s no exception.
Here’s my take on Apple. Sure, the bear case highlights real headwinds—maturing iPhone sales, antitrust heat on the App Store, a late start in generative-AI. All valid. Yet those clouds don’t block the bigger picture: Apple is the gatekeeper to a billion-plus devices, and that position is already monetised at software-level economics. Services contribute roughly 42 % of gross profit, and the cash-cow mechanics are hard to disrupt. Google’s $20 billion TAC payment proves that a mere default slot can mint high-margin dollars; extending that toll-booth model to “AI prompts” via Apple Intelligence could add a fresh, royalty-like stream without the cap-ex burden of training frontier models.
Add the $1.3 trillion in annual App Store-facilitated commerce (20 % CAGR since 2019) and the platform’s gravitational pull is obvious: developers go where the wallets are. Even if regulators shave Apple’s take rate, volume plus near-zero incremental cost keep the profit mix attractive. Meanwhile, a $100 billion free-cash-flow engine funds R&D, buybacks and strategic pivots on demand. In other words, every bearish dart can land and the model still works: high-margin services keep compounding, new AI revenue tolls slot on top, and the hardware base quietly refreshes itself. That asymmetry is why the long case still resonates.
Totally digging this series, keep it coming. I also like how you include actual tweets/examples.
Glad to hear it!
First off, hats off to you—your write-ups are always a masterclass in cutting through the hype, and this one’s no exception.
Here’s my take on Apple. Sure, the bear case highlights real headwinds—maturing iPhone sales, antitrust heat on the App Store, a late start in generative-AI. All valid. Yet those clouds don’t block the bigger picture: Apple is the gatekeeper to a billion-plus devices, and that position is already monetised at software-level economics. Services contribute roughly 42 % of gross profit, and the cash-cow mechanics are hard to disrupt. Google’s $20 billion TAC payment proves that a mere default slot can mint high-margin dollars; extending that toll-booth model to “AI prompts” via Apple Intelligence could add a fresh, royalty-like stream without the cap-ex burden of training frontier models.
Add the $1.3 trillion in annual App Store-facilitated commerce (20 % CAGR since 2019) and the platform’s gravitational pull is obvious: developers go where the wallets are. Even if regulators shave Apple’s take rate, volume plus near-zero incremental cost keep the profit mix attractive. Meanwhile, a $100 billion free-cash-flow engine funds R&D, buybacks and strategic pivots on demand. In other words, every bearish dart can land and the model still works: high-margin services keep compounding, new AI revenue tolls slot on top, and the hardware base quietly refreshes itself. That asymmetry is why the long case still resonates.
I disagree. None of the things you mentioned resonates with me. Growth will slow down, stock will collapse.
Honestly, I’m taken aback by such a terse, categorical dismissal.