“But on the positive side, we are seeing commodities behave fairly favorably for us. And so we believe we can offset the foreign exchange – the negative foreign exchange that we're seeing.”

In context

“h gross margin in Q4 and then I'll get to Q1. It was a September quarter record for the company. We did 42.3%, and that is in spite of, as you mentioned, very significant negative FX in -- for example, for Q4, on a sequential basis, FX was negative 70 basis points and on a year-over-year basis it was negative 170 basis points. Essentially every currency around the world has weakened against the dollar. Now, we have guided Q1 to 42.5% to 43.5% in spite of the fact that we have, on a year-over-year basis, 330 basis points of negative exchange. Sequentially, it's 120 basis points unfavorable. So obviously, the strong dollar makes it difficult in a number of areas. Obviously, our pricing in emerging markets makes it difficult, and the translation of that revenue back into dollars is affected. But on the positive side, we are seeing commodities behave fairly favorably for us. And so we believe we can offset the foreign exchange – the negative foreign exchange that we're seeing. And I think that the guidance that we provided reflects that. It takes into account, of course, FX. It takes into account some level of inflationary pressures. But I think the outcome is, I think, is a good one. Shannon Cross: Great. Thank you very much. Tejas Gala: Thanks, Shannon. Can we have the next question, please? Operator: Yes, sir. Our next question is coming from Erik Woodring with Morgan Stanley. Please go ahead, sir. Erik Woodring: Hey, guys, thanks very much for taking my questions. I have two as well. Maybe if we could just start. Luca, we saw quite the divergence in iPad and Mac performance this quarter. Both were relatively constrained from a supply perspective. So maybe can you just elaborate on some of the most impacted -- important factors that contributed to kind of th”