[ChuckMcM]

However Apple's product release schedule being as rigorous as it is tends to make quarters more comparable. Perhaps a better indication here is the drop from 40% gross margins to 37% gross margins. That comes right out of the business.

Generally lower revenues but same margins is a sign so constraints in the supply chain. Higher revenue but lower profits is a sign of margin erosion. Lower revenue and lower profits and lower margins is perhaps one of the most alarming situation.

It is good to push back on folks who thought he tablet was just a fad? You know the ones who said "There isn't a 'tablet' market so much as their is an 'iPad' market." Well those folks have been shown to be mistaken.

I don't own any Apple stock (well I might in my blind 401k but I wouldn't know if I did :-) I've been tempted to pick some up after it dropped from the 700's into the 400's. But the thing that I keep wondering about is their ability to execute in a contested market by a competent opponent. This coming quarter will be an interesting one for everyone I expect.

[downandout]

IMO, supply constraints mattered....and this quarter is different because Apple threw a lower margin iPhone into the mix: the 5c. These have been consistently available, while the 5s has not. That means that for all but a couple of days during the quarter, all they had to sell was the lower margin 5c, while revenue from the higher margin 5s was waiting in the wings and won't be seen until next quarter.

[ChuckMcM]

That is certainly a fair point, we can come back to this discussion in 3 months :-)

[gonzo]

Chuck,

If you really think that Apple will drop like that, you should short it.

[ChuckMcM]

I wouldn't short a stock for a single down quarter.