AAPL

Structural read: Apple is the only vertically integrated stack in consumer compute - silicon (M/A/S/R series), OS, distribution, payments, and identity all in one P&L. Services run at ~74% gross margin vs hardware ~37%, and the mix has drifted from 16% (2018) to ~28% of revenue (TTM).

Apple Intelligence routes most inference on-device via the Neural Engine, with Private Cloud Compute for heavier prompts and a ChatGPT fallback - making AAPL the largest distributor of edge-AI inference by unit volume.

- Services ~$110B run-rate at ~74% GM; >1B paid subs across the base

- Installed base 2.35B+ active devices; iPhone replacement cycle elongating but ASPs rising (Pro/Pro Max mix)

- Apple Silicon owns the M-series Mac stack end-to-end; A-series + Neural Engine = on-device AI distribution moat $NVDA can't touch on phones

- ~$110B/yr buyback + dividend; net cash target zero = mechanical EPS tailwind

- Vision Pro is an optionality call on spatial compute, not modeled into the multiple