Kyle Baxter:

I think we need to abandon the idea that Apple can (or should) sustain such high rates of growth in the future. Lower rates of growth should not be the concern—what should be is if Apple’s iPhone business begins to decline.

The typical response to the situation Apple finds itself in would be to milk as much money out of the iPhone cash-cow as possible and to sustain the business as long as possible, but that is exactly the wrong path for Apple to take. Going forward, Apple has to build such great new versions of the iPhone, or new devices that obviate its need for existing, that people have little choice but to purchase them. That’s the only way they’ll be able to stay out in front of the industry and to avoid the risk associated with one product accounting for more than half of revenue.

98% of the stuff that’s written about Apple’s quarterly earnings has been crap. However, Kyle (who is an accountant) gives a take that balances both knowledge of what it takes for a company to be financially successful and how Apple has succeeded over the past decade.

Let us never forget that Apple is Apple because they eschew Wall Street and focus on building great, profitable products. Investors are purely focused on getting a return from their investments. That doesn’t always mean the price going up or even building great products that might cannibalize their existing businesses.