People Walk Past Apple Store Displaying iPhone 17 Pro Poster in Chengdu

People in front of an Apple Store featuring a large poster of the iPhone 17 Pro in Chengdu, China, in October (Cheng Xin/Getty Images)

Apples to apples

Apple is becoming more of a services company and less a product company

Apple reports earnings Thursday.

Rani Molla

10/30/25 7:54AM

Apple is a giant company with lots going on, but for the top-line numbers it reports Thursday, the company divides itself into two main categories: Products and Services. Products includes the hardware Apple is most known for, including the iPhone, iPad, and Macs.

Its Services revenue is a bit squishier and encompasses everything from the money it makes off the App Store, iCloud storage, Apple TV, and the not insignificant ~$20 billion a year Google pays it to be the default search engine on Apple’s products.

Further in its earnings report, Apple provides iPhone revenue, which makes up the bulk of its Products revenue. We believe that’s both a good proxy for products and also for what’s going on at Apple: revenue from its main product, the iPhone, has been stagnating and even declining, while services have increasingly become a more important part of the company’s sales. For the company’s earnings today, the Bloomberg analyst consensus estimate has Apple’s Services revenue at $28.3 billion and iPhone revenue coming in at $49.3 billion.

That transition is probably fine with Apple, since its Services segment is much more profitable than its Products segment: Apple’s gross margin on Services is roughly double that of Products. Last quarter, for example, its Services gross margin was 75.6% compared with 34.5% for Products.

That’s why its fights with Epic Games over outside App Store fees as well as its involvement in Google’s monopoly case are so important to Apple and its stock price.

Regardless of what happens with the company’s latest iPhone today, which so far is seeing better demand than recent models, expect Apple to also emphasize how well its increasingly important Services segment is doing.

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Trump AI executive order is a “major win” for Open AI, Google, Microsoft, and Meta, says Ives

President Trump’s new executive order aiming to keep states from enacting AI laws that inhibit US “global AI dominance” is a “major win” for OpenAI, Google, Microsoft, and Meta, according to Wedbush Securities analyst Dan Ives. Big Tech companies have collectively plowed hundreds of billions into the technology, while seeing massive stock price gains, and Ives believes they stand to gain much more.

“Given that there have been over 1,000 AI laws proposed at the state level, this was a necessary move by the Trump Administration to keep the US out in front for the AI Revolution over China,” Ives wrote, adding that state-by-state regulation “would have crushed US AI startup culture.” The presidential order would withhold federal funds from states that put in place onerous AI regulations.

This morning, Whitehouse AI adviser Sriram Krishnan said in a CNBC interview that he’d be working with Congress on a single national framework for AI.

Despite Ives’ rosy read-through on the order, with the exception of Nvidia, which jumped on a report of boosted Chinese demand, many AI stocks are in the red early today. The VanEck Semiconductor ETF is down nearly 1% premarket, as the AI trade struggles thanks to underwhelming earnings results from Oracle earlier this week.

Ensuring a National Policy Framework for Artificial Intelligence

This morning, Whitehouse AI adviser Sriram Krishnan said in a CNBC interview that he’d be working with Congress on a single national framework for AI.

Rani Molla12/11/25

Epic scores two victories as “Fortnite” returns to Google Play and appeals court keeps injunction against Apple

“Fortnite” maker Epic Games notched two wins Thursday in its drawn-out battle against Big Tech’s app stores. “Fortnite” returned to the Google Play app store in the US, Reuters reports, as Epic continues working with Google to secure court approval for their settlement.

Meanwhile, a US appeals court partly reversed sanctions against Apple in Epic’s antitrust case, calling parts of the order overly broad, but upheld the contempt finding and left a sweeping injunction in place — keeping pressure on Apple to allow developers to steer users to outside payment options and reduce its tight control over how apps can communicate and monetize on iOS.

So many reasons to drop in this month... and now we're on Google Play in the U.S. too!

Android: https://t.co/Z6pkYqYsRI
iPhone: https://t.co/JNpTVneGMN
PC: https://t.co/CPsjp3XNdo pic.twitter.com/TV9b1ZlqfJ
— Fortnite (@Fortnite) December 11, 2025

Jon Keegan12/11/25

Report: AI-powered toys tell kids where to find matches, parrot Chinese government propaganda

You may want to think twice before buying your kids a fancy AI-powered plush toy.

A new report from NBC News found that several AI-powered kids toys could easily be steered to dangerous as well as sexually explicit conversations in a shocking demonstration of the loose safety guardrails in this novel category of consumer electronics.

A report out by the Public Interest Research Group details what researchers found when they tested five AI-powered toys for kids bought from Amazon. Some of the toys offered instructions on where to find matches and how to start fires.

NBC News also bought some of these toys and found they parroted Chinese government propaganda and gave instructions for how to sharpen knives. Some of the toys also discussed inappropriate topics for kids, like sexual kinks.

The category of AI-powered kids toys is under scrutiny as major AI companies like OpenAI have announced partnerships with toy manufacturers like Mattel (which has yet to release an AI-powered toy).

AI toys for kids talk about sex and issue Chinese Communist Party talking points, tests show

The category of AI-powered kids toys is under scrutiny as major AI companies like OpenAI have announced partnerships with toy manufacturers like Mattel (which has yet to release an AI-powered toy).

Jon Keegan12/11/25

OpenAI releases GPT-5.2, the “best model yet for real-world, professional use”

After feeling the heat from Google’s recent launch of its powerful Gemini 3 model, OpenAI’s response to its “code red” has been released, reportedly on an accelerated schedule to keep up with the competition.

The company’s new flagship model, GPT-5.2, is out, and the company is calling it “the most capable model series yet for professional knowledge work.”

OpenAI CEO Sam Altman called it the “smartest generally-available model in the world” and shared benchmarks that showed it achieving higher scores than Gemini 3 Pro and Anthopic’s Claude Opus 4.5 in some software engineering tests and abstract reasoning, math, and science problems.

In a press release announcing the new model, the company said: “Overall, GPT‑5.2 brings significant improvements in general intelligence, long-context understanding, agentic tool-calling, and vision — making it better at executing complex, real-world tasks end-to-end than any previous model.”