Apple’s (AAPL, Financial) fundamental strength reflects the proliferation of the iOS platform across the global mobile phone, tablet, and personal device landscape. With its huge installed base, Apple is now benefiting from rapid growth in service business subscriptions (apps, music), which are a key source of recurring revenue. The services business is the company’s fastest-growing and highest-margin business segment. Investor sentiment about Apple seems to have become less focused on near-term declines in the flagship iPhone business and more defined by a growing willingness to discount near-term lackluster top-line results in anticipation of a potentially robust product cycle that incorporates 5G wireless standards in 2020.
From Spiros Segalas (Trades, Portfolio)' Harbor Capital Appreciation Fund fourth-quarter 2019 commentary.
