Products gross margin was 40.7%, up 450 basis points sequentially, driven by favorable mix and leverage.
  Services gross margin was 76.5%, up 120 basis points sequentially, driven by mix.

Apple is paying 50% more for memory, yet maintaining product margin thanks to reduced royalties to Qualcomm for cellular radios and Broadcom for WiFi radio. As more Apple devices switch over Apple modems, margins will increase.

Hardware OEM competitors will likely pay >50% more for memory and continue paying full price for Qualcomm and Broadcom radio IP.