Problem magnification: All Apple problems are dire

Apple’s faced a modest decline in its profit margin over a period of a few years. Must be time to overreact.

Writing for Bloomberg, Shira Ovide says “Honey, I Shrunk Apple’s Profit Margins.” (Tip o’ the antlers to a reader in Dallas.)

R&D spending is the culprit…

How dare they invest in the future!

…and it’s hard to tell whether it’s being put to good use.

You mean Apple isn’t detailing what it’s developing?! How very surprising.

Financial types trying to understand Apple is perpetual Groundhog Day.

But this isn’t another tale of Apple’s impossible-to-believe profit power, because Apple isn’t the powerhouse that it used to be.

If you look at just this one measure.

Ovide references Bloomberg’s own calculation of operating income as a share of revenue to show that Apple is at its lowest level since 2009. Apple’s own gross margin figure, on the other hand, shows the company at the same level it was at in 2017, 2016, 2014 and 2013.

Apple’s shifting profit character is dramatic.

Using Bloomberg’s numbers it’s down 6.7 percent over the last four years, which is not exactly a precipitous fall. Apple forecasts its margin will be flat for the current quarter.