Hello everyone. Apple reports FY1Q23 earnings (results from October to December) on Thursday. Today’s update contains the second half of Neil’s earnings preview. The first half is available here. The update begins with Neil’s granular financial estimates. The discussion then turns to qualitative explanations for each of Apple’s product categories. We conclude with Neil’s updated Apple earnings model and how the model has changed over the past three months. Access to Neil’s Apple earnings model is a benefit associated with Above Avalon membership at no additional cost.

Let’s jump into today’s update.

My Apple 1Q23 Estimates

Here are my granular estimates for Apple’s 1Q23:

Revenue: $123.0B (consensus: $121.2B)
Overall gross margin: 42.8% (guidance: 42.5% to 43.5%)
Gross margin (HW): 37.0%

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