Sunday, November 20, 2016

Timmy will make zillions off his goggles project

Apple's gross margins on iPhone sales — a measure of the raw underlying profitability of its business — have declined from 57.7% in 2009 to just 41% today, according to analysts at Bernstein Research (see chart below). They expect it to sink to a "mere" 39% in 2018.
Apple is the single most profitable company on the planet. In January of this year, it famously posted the biggest quarterly profit of any company, ever. So it is unusual to see analysts worrying about where future profits might come from.
To put this in context: Apple is going to stay very, very profitable. No one is saying those profits are going to disappear. But at least four teams of analysts said in recent notes to clients that it was becoming harder to see how Apple would sustain its massive gross margins.
Have no fear, by  this time next year we will have a bunch of lunatics wearing goggles  with their hands waving erratically. 

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