Apple CEO Tim Cook calls doom and gloom 'huge overreaction,' turns sights to India

Posted:
in General Discussion edited May 2016
In an exclusive one-on-one interview with CNBC's Jim Cramer on Monday, Apple CEO Tim Cook said concerns that the company's best days are behind it are overblown, citing optimism in China and areas of huge growth potential like India.




Cook offered little in the way of new information during today's broadcast, instead reiterating international growth opportunities and an "exciting" upcoming product pipeline. As expected, a majority of the show focused on iPhone, Apple's bread-and-butter segment that last quarter saw its first ever year-on-year sales slowdown. For the second quarter of 2016, iPhone sales dipped to 51.2 million devices, pulling revenue down to $50.6 billion.

Like he did during an earnings conference call last week, Cook said the contraction was in large part due to comparatively slow upgrade rates, tough compares and macroeconomic headwinds, the latter of which impacted growth markets like China. Despite the decline, iPhone is performing well with switchers, or users who moved to Apple's ecosystem from platforms like Android. In China, for example, switch rates were up 40 percent for the first half of 2016.

While numbers were down year-over-year, China posted a "huge quarter" by absolute standards, which account for exchange rates and economic headwinds. In constant currency, Apple's Greater China business has grown 70 percent over the past two years, Cook said.



Interestingly, Cook more than once brought up Apple's prospects in India, saying this year's regional LTE rollout could play big for iPhone. Traditionally, Indian consumers shy away from premium smartphones, opting instead for budget devices running some flavor of Android. But Cook believes change is in the wind. About half of India's population is 25 years old or younger, a demographic Cook said is keen on buying "the best" products available. With LTE penetration at near zero, wireless customers didn't have a compelling reason to buy iPhone, but that too will change.

Looking at mature markets like the U.S. and Europe, the Apple chief expressed confidence in future upgrade cycles without revealing any juicy details. Cramer asked what Apple would include in a new iPhone that would make him need, not simply want, a new one, alluding to concerns that the company can no longer innovate.

"We're going to give you things you can't live without that you don't know you need today," Cook said.

On services, Cook commented on platform stickiness, saying ecosystem buy-in doesn't stop with hardware. Devices like iPhone and iPad are gateways to services purchases, from iCloud storage to apps, movies and music.

Finally, Cook addressed new product "flops" like Apple Watch, saying users will one day wonder how they ever survived without one. Commenting on lower than expected shipments -- estimates Apple never released -- he noted that Apple Watch is available in 14,000 locations, which compares to 200,000 for iPhone. The company is still in "learning mode" when it comes to wearables, but Cook is optimistic that Watch will one day be as pervasive as iPod and iPhone, products that got off to a slow start but are retrospectively viewed as overnight successes.
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Comments

  • Reply 1 of 77
    mj webmj web Posts: 918member
    A day late and a dollar short... Mr. Tim Cook.
    bdkennedy1002mvigod
  • Reply 2 of 77
    OK, cue Sog, stage right ...
    staticx57SpamSandwichcornchipcalijustadcomicssingularityireland
  • Reply 3 of 77
    bobschlobbobschlob Posts: 1,074member
    Just awful questions, followed by awful answers.
    Just downright awkward.
    suddenly newtonjonl
  • Reply 4 of 77
    ac1234ac1234 Posts: 138member
    OK, cue Sog, stage right ...

    Might you have any thoughts or insights to add on the status of Apple / Cook & Team?
  • Reply 5 of 77
    anantksundaramanantksundaram Posts: 18,871member
    bobschlob said:
    Just awful questions, followed by awful answers.
    Just downright awkward.
    Agree totally. I was particularly struck by the awkward amount of hemming and hawing from Cook. He really should practice giving more crisp, to-the-point answers to a wide range of questions that he should be able to fully anticipate by now. Most CEOs spend time training to do that. There was little evidence that Cook does/did. 
    edited May 2016 potatoleeksoupbdkennedy1002bobschlob
  • Reply 6 of 77
    jfc1138jfc1138 Posts: 3,090member
    mj web said:
    A day late and a dollar short... Mr. Tim Cook.
    Per federal regulations during the run up to the earnings report wouldn't this interview have been illegal?
    ration alcornchipcali[Deleted User]irelandpscooter63
  • Reply 7 of 77
    I think it is worth remembering when the touch ID was introduced what the market reaction was!

    Over the last four decades nobody thought apple products were that revolutionary, in the beginning. (1)PC (2) Window (3) mouse  and you know the rest.  
    Real problem for apple is the relentless pursuit by its imitators which try to bring products before they are ready which explains why Cook is so secretive.

    Revolutionary products take time to develop. Secretive does not equate non-innovative.  

    Remember Coke has not had second "successful revolutionary product" How about Clorox? Look at their valuation compared to apple.
    cornchipcaliradarthekatjustadcomicsirelandbadmonknolamacguy
  • Reply 8 of 77
    anantksundaramanantksundaram Posts: 18,871member
    jfc1138 said:
    mj web said:
    A day late and a dollar short... Mr. Tim Cook.
    Per federal regulations during the run up to the earnings report wouldn't this interview have been illegal?
    According to what federal regulations?
  • Reply 9 of 77
    focherfocher Posts: 637member
    There's nothing Tim Cook or anyone else is going to say that is going to convince short term traders of AAPL about anything. They're going to continue to be upset that Apple's fundamentals - revenue, profit, and growth cycles - are not sufficient to overcome the strange valuations of companies like Amazon and Google. Nothing is going to change that except if the market raises the price of AAPL.

    However, it's not Apple that has changed. It has never talked about unannounced products. It has never released a new product category that didn't get slammed in the media as non-innovative. This whole assertion that Apple has lost its ability to innovate is a bit suspect, but whatever.

    The best advice was Cramer's last line. Own it, don't trade it. I guess I'm lucky because I care about AAPL's value in the next 15-20 years, not the next 15-20 days.
    potatoleeksoupsuddenly newtoncornchipRayz2016radster360loquiturbrucemcpscooter63
  • Reply 10 of 77
    hittrj01hittrj01 Posts: 753member
    jfc1138 said:
    Per federal regulations during the run up to the earnings report wouldn't this interview have been illegal?
    According to what federal regulations?
    I think he's getting confused with the regulations put on companies to require a quiet period leading up to an IPO. However, while it is completely unofficial, it is common practice and essentially an unwritten rule for publicly traded companies to have a quiet period leading up to a quarterly earnings report so as not to influence Wall Street or other investors with undisclosed information that will be in the report. Usually that quiet period ending time is the conference call or press release itself, but since it's unofficial, it's up to each company how they want to do it.

    So no, there is no regulation banning Cook from doing this interview beforehand per se, but it would absolutely be a terrible business practice to do so.
  • Reply 11 of 77
    rogifan_newrogifan_new Posts: 3,750member
    Oh yea another bash Cook thread. So innovative.
    cornchipcalipscooter63
  • Reply 12 of 77
    anantksundaramanantksundaram Posts: 18,871member
    hittrj01 said:
    According to what federal regulations?
    I think he's getting confused with the regulations put on companies to require a quiet period leading up to an IPO. However, while it is completely unofficial, it is common practice and essentially an unwritten rule for publicly traded companies to have a quiet period leading up to a quarterly earnings report so as not to influence Wall Street or other investors with undisclosed information that will be in the report. Usually that quiet period ending time is the conference call or press release itself, but since it's unofficial, it's up to each company how they want to do it.

    So no, there is no regulation banning Cook from doing this interview beforehand per se, but it would absolutely be a terrible business practice to do so.
    There is zero evidence that it is a "terrible business practice" either. It is one of those made-up things by lawyers with too much time on their hands. 
  • Reply 13 of 77
    anantksundaramanantksundaram Posts: 18,871member
    Oh yea another bash Cook thread. So innovative.
    Who's 'bashing' Cook?!
  • Reply 14 of 77
    canukstormcanukstorm Posts: 1,777member
    Oh yea another bash Cook thread. So innovative.
    speaking of which, this write, like Sog, is calling for Tim Cook's ouster

    http://lefsetz.com/wordpress/2016/04/27/apples-numbers/

    problem is that no one can come up with a specific person to lead a company as unique as Apple
    loquitur
  • Reply 15 of 77
    SpamSandwichSpamSandwich Posts: 30,558member
    jfc1138 said:
    mj web said:
    A day late and a dollar short... Mr. Tim Cook.
    Per federal regulations during the run up to the earnings report wouldn't this interview have been illegal?
    If he made any disclosures in private to Cramer and Cramer used it for personal gain, that would be trouble.
  • Reply 16 of 77
    bobschlobbobschlob Posts: 1,074member
    bobschlob said:
    Just awful questions, followed by awful answers.
    Just downright awkward.
    Agree totally. I was particularly struck by the awkward amount of hemming and hawing from Cook. He really should practice giving more crisp, to-the-point answers to a wide range of questions that he should be able to fully anticipate by now. Most CEOs spend time training to do that. There was little evidence that Cook does/did. 
    Yeah. Exactly.
  • Reply 17 of 77
    jonljonl Posts: 210member
    It's final. Tim is Apple's Jeb Bush.
  • Reply 18 of 77
    isammiisammi Posts: 8member
    Carl Icahn dumped all 46 mil of his shares of Apple stock in a down market. His reading of the tea leaves must see it getting nothing but worse.
  • Reply 19 of 77
    rogifan_newrogifan_new Posts: 3,750member
    Oh yea another bash Cook thread. So innovative.
    speaking of which, this write, like Sog, is calling for Tim Cook's ouster

    http://lefsetz.com/wordpress/2016/04/27/apples-numbers/

    problem is that no one can come up with a specific person to lead a company as unique as Apple
    Who is he and what does he know about running a technology company? Sad that John Gruber had to link to it and give him traffic.
    edited May 2016 cali
  • Reply 20 of 77
    quadra 610quadra 610 Posts: 6,741member
    How many record quarters has Apple
    enjoyed under Cook?

    https://en.m.wikipedia.org/wiki/List_of_largest_corporate_profits_and_losses

    So let's all RELAX, and look at things with a little more long-term perspective.
    cali
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