Apple CEO Tim Cook says new services coming this year, talks iPhone XR 'flop,' more

Posted:
in General Discussion edited January 9
Coming off a bruising week spurred by a negative guidance revision, Apple CEO Tim Cook sat down with Mad Money's Jim Cramer on Tuesday to discuss a range of topics regarding the company's health.

Tim Cook
Apple CEO Tim Cook appears on CNBC's Mad Money.


While Cook toed the company line for a majority of the CNBC interview, issuing oft-repeated platitudes on Apple's customer-over-all-else mantra, he did reveal a few facts and figures that shed light on the tech giant's current situation.

Perhaps most intriguing, however, was a vague reference to new services Apple plans to announce in 2019.

"On services, you will see us announce new services this year. There will more things coming. I don't want to tell you about what they are," Cook said. "I believe it'll be material over time. I'm not gonna forecast precisely, the ramps and so forth. But they're things that we feel really great about, that we've been working on for multiple years."

The statement was in response to a question regarding a potential layering of existing services. Cramer suggested Apple could combine Apple Pay and healthcare initiatives like Health Records to maximize its payments services revenue stream.

Cook remained mum on what, exactly, Apple has in store for launch, but did say the projects have been in development for "multiple years."

The Apple chief consistently called out Apple's health initiatives, saying products like Apple Watch are impacting the lives of customers for the better. Cook said he regularly receives emails from users touting the wearable's features, some of which are proving to be lifesavers. For example, customers are saying Watch has fostered a more active lifestyle, while others are using new functions added to Apple Watch Series 4 and watchOS 5, like the ECG feature, to discover they suffer from atrial fibrillation.

Cook went so far as to say Apple will be remembered more for its contributions to health than technology.

"On the healthcare, in particular, and sorta your wellbeing, this is an area that I believe, if you zoom out into the future, and you look back, and you ask the question, 'What was Apple's greatest contribution to mankind,' it will be about health," he said.

iPhone sales

As expected, Cook was bullish on the health of iPhone, Apple's main revenue driver.

Apple stirred the hornet's nest last week when it announced earnings for the first fiscal quarter of 2019 would not meet guidance offered at the end of the trailing quarter. Specifically, Apple is now targeting $84 billion in revenue down from a forecast in November that anticipated results between $89 billion and $93 billion. In a note to investors, Cook blamed the downturn on weaker than expected iPhone demand in China and other developing countries.

Analysts, industry insiders and pundits fired off a barrage of hot takes that sent Apple stock tumbling. Most recently, The Wall Street Journal went so far as to call the iPhone XR, this year's mid-range handset, a flop.

"I say baloney. I call baloney on that," Cook said today. "Here's the truth, what the facts are. Let me tell you how I view this. Since we began shipping the iPhone XR, it has been the most popular iPhone every day, every single day, from when we started shipping until now."

With iPhone XR, Apple addresses the -- considerable -- market segment unwilling to pay upwards of $1,000 on a smartphone.

"Now, the best phones, we knew that, as we went to the X and then the follow-on of the XS and the XS Max, that everybody would not want to spend $1,000 for the phone. So we made the iPhone XR," he said.

Beyond iPhone XR, Cook said Apple is in the business of serving the customer, which will ultimately translate into device sales. Users who are loath to upgrade from an iPhone 5, for example, are considered happy customers who contribute to a thriving services ecosystem.

"Now, if she's not upgrading for another reason, maybe it's too much of a hassle for her to upgrade. Maybe she's worried about the transfer of data," he said, referencing Cramer's daughter who still uses an iPhone 5. "All of this stuff, we want to help on."

China

Echoing his letter to investors and subsequent interviews, Cook said the dip in Chinese iPhone sales during quarter one can be attributed in part to trade tensions with the U.S. China's economy was already on the downswing during the second half of 2018, but a brewing trade war exacerbated its effects on product sales.

Cook once again expressed optimism that the two countries will be able to find a trade resolution, and relatively soon, despite a bevy of inherent complexities in dealing with two world powers.

"I believe that's temporary," Cook said of China's economic downturn. "Because I think that, when you really look at it, it's in both countries' best interests to come to an agreement. It is a complex, very complex, trade agreement and it needs to be updated."

Qualcomm

Moving on to Apple's bitter legal struggle with Qualcomm, Cook addressed recent high-profile court losses in China and Germany. In December, Qualcomm won a Chinese sales ban against certain iPhone models that contain software in infringement of two owned patents. That court decision was followed by a similar finding in Germany, which resulted in a sales ban on all iPhone models save for the iPhone XR and XS series.

Following the pair of rulings, Qualcomm executives ramped up a public relations offensive, hinting Apple will soon be forced to settle the worldwide court battle. However, Cook today refuted suggestions that Apple is in active settlement discussions with the chipmaker.

"Look, the truth is, we haven't been in any settlement discussions with them since the third calendar quarter of last year," he said. "That is the truth. So I'm not sure where that thinking is coming from."

Cook reiterated Apple's position in the scrum, saying Qualcomm's business practices are questionable. Qualcomm has been under investigation since 2014 over concerns related to FRAND (fair, reasonable and nondiscriminatory) commitments on deemed standard-essential patents, issues that are at the heart of Apple's multiple lawsuits against the chipmaker. Beyond hefty royalty rates, Qualcomm refuses to sell chipsets to manufacturers until they first license the SEPs, often at "extortion-level" rates, Apple has claimed.

Qualcomm's questionable PR tactics are also a bone of contention for Cook. Late last year, reports found Qualcomm contracted a specialized firm to sling mud at Apple and its chief executive in a bid to say public opinion during the still ongoing court struggle.

Facts and Figures

Over the course of the interview, Cook rattled off a number of figures to prop up his argument that Apple is, indeed, in good health.

Though Apple does not break out sales numbers for its wearables division, made up of products like Apple Watch, AirPods and Beats, Cook offered a peek behind the curtain today.

"On a trailing basis, the revenue for wearables is already more than 50 percent more than iPod was at its peak," Cook said. "Also, if you take AirPods and the Watch separately, and you sort of back these up and align it to the launch date of iPod, as well, where all of them have a comparable amount of time, you would find that each one independently is four to six times ahead of where iPod was at a comparable period of time."

Siri is now on more than 500 million devices, with Apple processing over 10 billion queries a month.

India

Finally, Cook commented on Apple's stagnant India business. Cramer suggested Apple partner with Walmart's India-based Flipkart to distribute a budget iPhone. Cook balked at the idea, saying Apple is in the business of making the best products with the greatest value, attributes that do not necessarily amount to "cheapest."

Apple is looking for inroads into the burgeoning Indian market, but have so far been stymied by the country's duties and strict sourcing regulations. After rapidly growing from $100 million in revenue per year to just over $2 billion, Apple's Indian business remained flat over the past two years.

Cook reiterated hope that ongoing talks with local officials will bear fruit, allowing the company to open retail outlets in the region.
neil andersonbakedbananas
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Comments

  • Reply 1 of 81
    NY1822NY1822 Posts: 593member
    what new services do you guys think Apple should get into?
    AppleExposed
  • Reply 2 of 81
    robbyxrobbyx Posts: 474member
    NY1822 said:
    what new services do you guys think Apple should get into?
    That's a good question.  Other than video, what has mass appeal?  I'd be curious to hear what services people currently use.  It's hard for me to imagine what services Apple might launch outside of video and perhaps some kind of all-you-can-eat magazine subscription service (based on their acquisition of Texture).
  • Reply 3 of 81
    tzeshantzeshan Posts: 1,893member
    XR is a bad design decision. XR should be smaller than XS. 
    mike54AppleExposed
  • Reply 4 of 81
    mattinozmattinoz Posts: 1,021member
    NY1822 said:
    what new services do you guys think Apple should get into?
    iCloud for Teams
    Allow teams in teams or indeed a customer to be in multiple seperate teams.
    So I could have my family shared space, personal space on home computer, while work device has my department and company space.
    iPad, iPhone would have all but would mute Family space notifications while at work and vis versa.

    Team owners can buy storage, apps and services for their team and manage in one location.

    Single sign-on one iCloud account


    steveau
  • Reply 5 of 81
    NY1822NY1822 Posts: 593member
    doubt it will happen, but might Apple get into banking?

    "This is not brand-new information….a survey in 2015 stated that 73% of people in their 20s-30s were more excited by a financial services product offered by a technology company rather than a traditional bank."

    https://www.finextra.com/blogposting/14337/is-apple-about-to-take-a-bite-out-of-the-retail-banking-industry
    neil andersonsteveauapplesnorangeswatto_cobra
  • Reply 6 of 81
    NY1822 said:
    what new services do you guys think Apple should get into?
    Video seems to be on he horizon and as mentioned above some sort expansion of News. Also, a service doesn't have to be sold to end users. For example the work they are doing with healthcare records could be sold to healthcare providers? 
    applesnorangesracerhomie3radarthekatwatto_cobra
  • Reply 7 of 81
    New services?

    Video streaming seems obvious. I'd like a Netflix style service, except with better content (Netflix always seems to have old movies/shows I don't care about). I'd pay more (like $29 or $39 a month) if I got access to the latest movies/shows.

    Banking is another possibility. So is Apple as a carrier. Get your phone and cellular service from a single provider. They could even offer their service with extras (no tracking by your carrier or better data plans).
    edited January 8 neil andersonmattinozradarthekatwatto_cobra
  • Reply 8 of 81
    NY1822NY1822 Posts: 593member
    Does Apple have to pay these television manufacturers to have ITunes on their tvs? or vice versa? 
    muthuk_vanalingamwatto_cobra
  • Reply 9 of 81
    NY1822NY1822 Posts: 593member
    Will Apple ever rebrand the name "iTunes" especially now it will be on most tvs? Seems outdated to reflect what it is actually/becoming...the name Apple Video has more synergy.
    radarthekat
  • Reply 10 of 81
    A trustworthy VPN that ‘just works’?
    steveauapplesnorangesradarthekatpontavignonwatto_cobrajony0
  • Reply 11 of 81
    fastasleepfastasleep Posts: 2,559member
    mattinoz said:
    NY1822 said:
    what new services do you guys think Apple should get into?
    iCloud for Teams
    Allow teams in teams or indeed a customer to be in multiple seperate teams.
    So I could have my family shared space, personal space on home computer, while work device has my department and company space.
    iPad, iPhone would have all but would mute Family space notifications while at work and vis versa.

    Team owners can buy storage, apps and services for their team and manage in one location.

    Single sign-on one iCloud account


    I would love an iCloud alternative to G Suite. I fucking hate Google's software.
    mattinozbshankMplsPAppleExposedwatto_cobra
  • Reply 12 of 81
    elijahgelijahg Posts: 830member
    DoctorQ said:
    A trustworthy VPN that ‘just works’?
    They used to have that, at least between Macs: it was Back to My Mac. It used IPv6 tunnels internally and was fully auto-configuring and included support for Bonjour advertisements over the tunnel. But they removed it in Mojave for apparently no reason.
  • Reply 13 of 81
    robbyxrobbyx Posts: 474member
    elijahg said:
    DoctorQ said:
    A trustworthy VPN that ‘just works’?
    They used to have that, at least between Macs: it was Back to My Mac. It used IPv6 tunnels internally and was fully auto-configuring and included support for Bonjour advertisements over the tunnel. But they removed it in Mojave for apparently no reason.
    That's not really the same thing as a VPN service, though.  I can't see Apple getting into the VPN business.  What would the point be?  And it would put them under a lot of scrutiny.  Back to My Mac was cool when it worked, but it had compatibility issues with a lot of routers.  My guess is, they have the data on how many people actually used it, as well as the support call data for all the people who couldn't get it to work, and decided it wasn't a feature worth supporting, especially now that they are out of the router business.
    watto_cobra
  • Reply 14 of 81
    robbyxrobbyx Posts: 474member

    NY1822 said:
    Will Apple ever rebrand the name "iTunes" especially now it will be on most tvs? Seems outdated to reflect what it is actually/becoming...the name Apple Video has more synergy.
    Perhaps when their video service launches?  I wish they'd split iTunes into two apps, one for audio, one for video.  The current iTunes UI is so clunky.
  • Reply 15 of 81
    robbyxrobbyx Posts: 474member

    New services?

    Video streaming seems obvious. I'd like a Netflix style service, except with better content (Netflix always seems to have old movies/shows I don't care about). I'd pay more (like $29 or $39 a month) if I got access to the latest movies/shows.

    Banking is another possibility. So is Apple as a carrier. Get your phone and cellular service from a single provider. They could even offer their service with extras (no tracking by your carrier or better data plans).
    The problem with them getting into he carrier business is that they would be biting the hand that feeds them in many respects.  They need the carriers to promote and push their devices.  I can't see how alienating their carrier partners would ultimately benefit them.
    muthuk_vanalingamwatto_cobra
  • Reply 16 of 81
    mattinozmattinoz Posts: 1,021member
    mattinoz said:
    NY1822 said:
    what new services do you guys think Apple should get into?
    iCloud for Teams
    Allow teams in teams or indeed a customer to be in multiple seperate teams.
    So I could have my family shared space, personal space on home computer, while work device has my department and company space.
    iPad, iPhone would have all but would mute Family space notifications while at work and vis versa.

    Team owners can buy storage, apps and services for their team and manage in one location.

    Single sign-on one iCloud account


    I would love an iCloud alternative to G Suite. I fucking hate Google's software.
    To me Apple's advantage is they can do it as a platform for 3rd parties (in a way G-Suite and Office365 can't) as much as it's a sales pitch to their own hardware and services. 
    watto_cobra
  • Reply 17 of 81
    robbyx said:
    NY1822 said:
    what new services do you guys think Apple should get into?
    That's a good question.  Other than video, what has mass appeal?  I'd be curious to hear what services people currently use.  It's hard for me to imagine what services Apple might launch outside of video and perhaps some kind of all-you-can-eat magazine subscription service (based on their acquisition of Texture).
    That’s an easy one. The service that is ripe for takeover is something to rival Facebook that doesn’t steel, sell or absconded with your private data and still allow you to be in contact with your friends and family.
    mygigAppleExposedwatto_cobra
  • Reply 18 of 81
    d_2d_2 Posts: 55member
    mattinoz said:
    NY1822 said:
    what new services do you guys think Apple should get into?
    iCloud for Teams
    Allow teams in teams or indeed a customer to be in multiple seperate teams.
    So I could have my family shared space, personal space on home computer, while work device has my department and company space.
    iPad, iPhone would have all but would mute Family space notifications while at work and vis versa.

    Team owners can buy storage, apps and services for their team and manage in one location.

    Single sign-on one iCloud account


    ... adding on to the “iCloud for teams” bit - a document sharing and storage service could be an easy one for them, far better usability and integration vs Dropbox and all docs / files available for all Apple devices, including Watch and AppleTV

    mattinozapplesnorangeswatto_cobra
  • Reply 19 of 81
    robbyxrobbyx Posts: 474member
    robbyx said:
    NY1822 said:
    what new services do you guys think Apple should get into?
    That's a good question.  Other than video, what has mass appeal?  I'd be curious to hear what services people currently use.  It's hard for me to imagine what services Apple might launch outside of video and perhaps some kind of all-you-can-eat magazine subscription service (based on their acquisition of Texture).
    That’s an easy one. The service that is ripe for takeover is something to rival Facebook that doesn’t steel, sell or absconded with your private data and still allow you to be in contact with your friends and family.
    I disagree.  Several companies have tried to create such a service and failed.  It's a nice idea, but people simply aren't willing to pay for it.
    beowulfschmidt
  • Reply 20 of 81
    mattinozmattinoz Posts: 1,021member
    robbyx said:
    NY1822 said:
    what new services do you guys think Apple should get into?
    That's a good question.  Other than video, what has mass appeal?  I'd be curious to hear what services people currently use.  It's hard for me to imagine what services Apple might launch outside of video and perhaps some kind of all-you-can-eat magazine subscription service (based on their acquisition of Texture).
    That’s an easy one. The service that is ripe for takeover is something to rival Facebook that doesn’t steel, sell or absconded with your private data and still allow you to be in contact with your friends and family.
    To me the Facebook/Twitter/... replacement wants to be an open source open platfrom almost as an extension you add to your email server.  
    watto_cobracornchip
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