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 8:54AM

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.

Millie Giles2h

SpaceX’s compensation plan for Musk is partially tied to creating a permanent human colony on Mars, America’s favorite planet

The conditions of SpaceX’s pay package for founder Elon Musk were revealed in a confidential registration statement, which was reviewed by Reuters last week.

While the compensation plan, approved by the SpaceX board in January, includes a sky-high valuation target of $7.5 trillion, it turns out Musk will only be awarded 200 million in super-voting restricted shares if he also establishes a permanent human colony on Mars with more than a million people, according to excerpts from the statement.

Luckily, there might be some volunteers to become cosmic X-patriates, since Mars just so happens to be Americans’ celestial body of choice. According to a new YouGov survey, published Tuesday, Mars is Americans’ favorite planet (19%), followed by ring-laden Saturn (14%) and 143,000 kilometer-wide Jupiter (8%).

Americans favorite planet YouGov — Sherwood News

Respondents were less enthused by Mercury and almost-planet Pluto, with roughly 1 in 5 respondents calling one of these their least favorite planet — though a majority of US adults (55%) simply didn’t know what their least favorite planet was, like the 38% who couldn’t say what their top choice was.

Whether Mars is America's favorite because of manifold endeavors to colonize it, or whether its proximity to Earth, relatively livable climate (Mercury’s temperatures, for example, are a little more mercurial, hitting 800°F in the day then dropping to -290°F at night), and grip on pop culture, from Ziggy Stardust to chocolate bars, have given us a rosier view of the Red Planet, is unclear.

Ahead of the company’s highly-anticipated IPO, it had appeared that SpaceX’s priorities were shifting away from Mars, further towards the Earth’s Moon. But if the world’s richest man wants to ensure even more company shares come June, SpaceX’s path to Mars shouldn’t be eclipsed.

Rani Molla

John Apple

15h

Apple beats estimates on earnings and revenue

Apple reported second-quarter earnings after the bell Thursday.

Jon Keegan15h

White House said to oppose Anthropic’s plan to expand Mythos access to more companies

Anthropic is ready to invite a wider group of companies to gain access to Claude Mythos, the company’s powerful next-generation AI chatbot.

The tightly controlled model has been deemed something of a security risk by Anthropic itself, due to its ability to find thousands of software vulnerabilities and potentially be used for sophisticated cyberattacks.

About 50 companies have been given access to test the capabilities of the new model, and Anthropic wanted to expand that to 120, according to a report from The Wall Street Journal.

The Trump administration is blocking the move out of concerns that the new technology could fall into the wrong hands, per the report.

Yesterday, Bloomberg reported that Anthropic was in talks to raise money with a $900 billion valuation — higher than its archrival in the AI chatbot world, OpenAI, which was recently valued at $852 billion.

White House Opposes Anthropic’s Plan to Expand Access to Mythos Model

About 50 companies have been given access to test the capabilities of the new model, and Anthropic wanted to expand that to 120, according to a report from The Wall Street Journal.

The Trump administration is blocking the move out of concerns that the new technology could fall into the wrong hands, per the report.

Rani Molla20h

Alphabet, Amazon, Microsoft, and Meta plan to spend more than $700 billion on capex this year

Big Tech’s big capital spending continues to surge even higher than the companies had previously expected.

Alphabet raised its 2026 capex outlook to between $180 billion and $190 billion, up from $175 billion to $185 billion. Meta increased its 2026 forecast to $125 billion to $145 billion, up from $115 billion to $135 billion. Microsoft, meanwhile, said it’s planning on spending $190 billion this calendar year, about $55 billion more than the FactSet analyst consensus. Amazon, the lone outlier, didn’t boost its capex forecast, keeping it at a cool $200 billion.

Combined, Alphabet, Amazon, Microsoft, and Meta plan to spend more than $700 billion on capex in 2026, nearly double what they spent last year and $100 billion more than they’d expected just last quarter, as they continue to build out the AI infrastructure to support their AI futures.

big 4 tech capex meta microsoft google amazon — Sherwood News

Microsoft’s capex outlay this year would be enough to buy every outstanding share of Disney

CFO Amy Hood said on last night’s earnings call that the company will spend $190 billion on capex in 2026.

Jon Keegan20h