Apple reported a 12% increase in revenue for the quarter ending in September, slightly exceeding Wall Street expectations. Its closely watched gross margin of 47.9% also slightly beat analysts' expectations. However, Apple's high-margin services business continued to slow. Its stock fell 4% in after-hours trading as guidance from executives suggested that price increases protecting this quarter might not be enough to sustain the market for the next few quarters. As devices become increasingly expensive, Apple needs to give people a reason to buy its products. Without compelling new features, a major question is whether consumers will upgrade their iPhones less frequently. Apple will need to find new growth avenues as a reliable growth engine under Cook—its services business—is slowing. Global courts and regulators have limited Apple's ability to charge developers hefty app distribution fees through the App Store, the largest component of the company's services segment, and one of its revenue sources is ChatGPT. Around the time Apple accused OpenAI of stealing trade secrets this summer, OpenAI began directing potential subscribers to its website to pay instead of through the App Store, thus bypassing Apple's payment hurdle.
