Apple Inc. (AAPL.US) Service business grows strongly, showing strong profitability resilience against rising memory costs. Stock price rises more than 3%.

On Friday, Apple Inc. (AAPL.US) stock price closed up 3.24%, as the company's quarterly performance and latest revenue guidance exceeded market expectations, boosting investor confidence. CEO Tim Cook stated in the earnings conference call that despite global semiconductor supply shortages driving up costs, the company's overall operational performance remained strong. He also confirmed that he will step down in September after leading the company for 15 years. Apple Inc. expects revenue for the third fiscal quarter ending in June to increase by 14% to 17% year-on-year, significantly higher than the market's previous expectation of around 9.5%. Cook stated that the new generation of smartphones continues to be popular with consumers and has become one of the most popular product lines in the company's history. Sales of various personal computer products also continue to show strong momentum. The new low-cost laptop launched in March this year has performed impressively. Cook said that the market feedback for this product has been "far beyond expectations" with very strong demand. In the previously announced second quarter results, Apple Inc.'s overall performance exceeded market expectations. The company's revenue for the quarter increased by 17% year-on-year to $111.18 billion, higher than the market's expected $109.66 billion. In terms of business segments, revenue from personal computers, tablets, and services all exceeded expectations, while smartphone sales were slightly below market forecasts. Nevertheless, the company's overall profitability continued to steadily improve. The service business continues to be an important growth engine for the company. Revenue from this segment increased by approximately 16% to $30.98 billion in the quarter. With a massive user base of over 2.5 billion active devices, Apple Inc. continues to monetize its services by providing digital content subscriptions, mobile payments, cloud storage, and after-sales services. Compared to hardware products, the service business has higher profit margins, contributing more to overall profitability. Despite the cost pressure from rising semiconductor prices, Apple Inc.'s overall gross margin continued to trend upward. The latest quarter's gross margin rose to 49.3%, higher than the previous quarter's 48.2%. For the upcoming third quarter, the company expects gross margin to be between 47.5% and 48.5%, indicating a slight narrowing of profit margins in the context of rising costs. Cook stated that the company will consider various ways to address the ongoing increase in semiconductor costs, but did not disclose specific measures. Morgan Stanley analysts believe that despite cost pressures bringing some uncertainty, the strong latest performance has significantly strengthened market confidence in Apple Inc.'s ability to maintain profitability, leading to an upward revision of the company's full-year profit expectations. Meanwhile, KeyBanc Capital Markets analysts pointed out that the current gross margin guidance does not fully reflect the potential impact of rising storage costs.