“We’ve put our current thoughts in the gross margin guidance that we gave you, the 41.5% to 42.5%. I would tell you that we are seeing a significant increase in freight costs. And I would assume that that is pretty consistent across different companies. And so, we’re clearly seeing some inflation there.”

In context

“last quarter, we grew on upgraders and switchers in the double digits. And so, both were very meaningful for the iPhone results last quarter. And so, there’s significant momentum in iPhone. And I would clearly characterize the demand that we’re seeing currently as robust, as you can tell from the -- some of the quotes that we’re quoting on the online store. Samik Chatterjee: Okay. And as a follow-up, I guess, back to the supply chain but I wanted to just ask more relative to cost implications there. And what we’re hearing is not only delays but also component cost going up. So, as we look through -- as I think about this upcoming cycle, how are you looking to manage component cost related headwinds? And is that something you’re seeing coming through the supply chain? Thank you. Tim Cook: We’ve put our current thoughts in the gross margin guidance that we gave you, the 41.5% to 42.5%. I would tell you that we are seeing a significant increase in freight costs. And I would assume that that is pretty consistent across different companies. And so, we’re clearly seeing some inflation there. Operator: We’ll take our next question from Jim Suva with Citigroup. Jim Suva: Thank you. And I’ll ask both my questions at the same time. Probably the first one is for Tim. On the services revenue, much better than expected. Can you give us some details about what drove that? Was it Apple Stores more open, so more AppleCare or more Apple One or Arcade or TV or Fitness? And then, probably for Luca on supply chain, when you mentioned supply chain headwind is going to get worse and you mentioned $6 billion this quarter, there’s two ways to think about your terminology of worse. Is it the delta from $2 billion that you identified three months ago that went to $6 billion, so therefore, the delta of $4 billion gets worse, or are you just saying -- and therefore, it’s above $10 billion for Dece”