The Back Page: Tim Cook, now with absolute candor

Luca: …and with that, let’s open the call to questions.

Operator: Our first question comes from Jan Key from Key Blur Financial. Go ahead.

Jan: Thanks for taking my question. Tim, you said that you’re facing a lot of headwinds in the next quarter. Can you talk about what impact that might have on gross margin?

Tim: Jan, this is Tim. You know we don’t provide specific guidance for gross margin. But what I can tell you is: yes, we expect to lose exactly 200 basis points in the next quarter, dropping our gross margins to about 33 percent.

Jan: … Uh. What?

Tim: 33 percent. That’s 5 percent less than this quarter. Not great, if you ask me.

Jan: That is very specific.

Tim: You’re welcome.

Jan: And you’re not concerned about that?

Tim: Of course I’m concerned.…