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Apple’s ‘Great’ Could Be Better
Apple on Thursday reported what it was probably fair to call mixed results for a holiday quarter clouded by concerns around the company's foothold in China and a less-than-impressive opening push into AI.
Revenue was $124.3 billion for the period, ahead of estimates, but not by enough to impress anyone.
Sales growth versus the 2023 holiday season was 4%. It was the third straight period during which Tim Cook grew the top-line. Recall that Apple saw sales fall for five of six quarters across 20
Thanks to my experience in the open source software movement in the late 80s and 90s, I’ve never been a big fan of the company. But I respect how they focussed on easy to use and good enough to lure users into their walled garden.
So it may surprise you that I think that Apple was damn right NOT to waste billions developing their own LLM models. Even when the geniuses on Watt Street (who could not tell you just what AI is or how it works) were all screaming that Apple had “missed” AI. DeepSeek and IBM’s experience shows that what Apple “missed” was pouring huge money down the LLM rathole. Well done, Cupertino!
Now use some of they money saved to buy Intel along with Berkshire to secure your chip supply and allow you to truly be a Made in the USA company.
I couldn’t tell what turned the stock around during the call. I guess someone will put the aftermarket chart up against the transcript and figure it out.
Efficient inference could reward AAPL’s architecture of AI compute on-device, commoditized AI models could validate AAPL’s decision to use ChatGPT rather than invest in it, and with enough model efficiency it could be that AAPL has the proprietary AI silicon that others are rushing to develop and at far lower cost than others. That all feels too long-term to matter aftermarket.
Another comment I learned form on the H program…
Well manicured financial engineering by AAPL’s CFO & CEO.