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I think Apple has it's issues, but isn't this textbook Innovator's Dilemma? Newer vertical looks small compared to established vertical, thus dismissed.

$400 every two years (assuming 50% profit per phone!) is just $17/month. If Apple can convince you to pay for 2 or 3 of its services, then they're gold.

Where does the "11 years" comment come from though? How do you figure that?

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If you're counting profit on the phone, you need to compare that to profit from the service.

I doubt they are running Apple Music with a 50% profit. Most services are probably being priced close to cost to gain market share.

Yeah that's a good point. I don't really think these services are "at cost", though: isn't the whole point of this industry that marginal costs are super low?

I assume he means the P/E ratio which is 10.79 right now.

I would hesitate to interpret a P/E ratio as the number of future years in which we'd expect constant profits (wrt now)

Why hesitate? Isn't that a good definition?

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