Beyond The Numbers: What Tim Cook Really Said In Apple's Q3 2012 Financial Call | Cult of Mac

Beyond The Numbers: What Tim Cook Really Said In Apple’s Q3 2012 Financial Call


Beyond just offering up the latest quarterly financial numbers, Apple CEO Tim Cook gave us glimpses of where Apple is heading.
Beyond just offering up the latest quarterly financial numbers, Apple CEO Tim Cook gave us glimpses of where Apple is heading.

Beyond the numbers, there were some tantalizing tidbits about Apple and the company’s future plans during today’s quarterly financial call. While nothing quite lived up to Tim Cook comparing Windows 8 to someone trying to converge a toaster and a refrigerator into a single device during the last call, there were several choice comments.

The iPhone and iPad both saw gains in business according to Cook and Apple CFO Peter Oppenheim.

According to Apple estimates, the number of iPhones used by Fortune 500 companies has doubled since the same time last year and high-profile companies like Pepsico are committing to the platform with internal iOS apps. This is one of Apple’s first major announcements about in-house apps created by major corporations.

iPad use in the Fortune 500 has done better and tripled since last year according to estimates. Apple singled out British Airways and their deployment of “thousands” of iPads throughout their organization.

Cook showed no hesitation in responding to a question about the new Google Nexus 7 tablet though he didn’t reference it specifically in his response. Speaking of competing tablets as a whole, he said that he and Apple have “yet to see any of them gain what I would call anything like traction” and that customers are “looking for an iPad” rather than simply a tablet.

Asked about the decision to offer the iPad 2 at a $100 discount and iPad price elasticity, Cook said that the reduced iPad 2 appealed to a “buyer that really wanted the best product” but needed it at a lower price point than the $499 price point Apple established for the iPad two years ago. He also noted that this price drop has helped drive Apple sales in the education market, particularly the K-12 market where Apple has sold over a million iPads, and that he was “really glad we did it.”

Education was a big focus of the earnings call. Part of that was due Apple’s education event in January and the upcoming back to school season. More of it was due to the immense success that Apple is seeing in education. Cook and Oppenheim noted that this was the best quarter ever for Apple in education with record numbers of Mac and iPad purchases. Mac purchases mentioned specifically included school districts in Colorado and North Carolina investing in thousands of MacBook Air notebooks for students.

iTunes U has had significant success since its relaunch as a full featured remote education tool rather than a repository of recorded lectures. The new iTunes U app has been downloaded over 14 million times and there are now 750+ courses available for free through the app.

Asked about whether the Passbook feature in iOS 6 is a precursor to Apple launching its own mobile payments solution, Cook refused to comment. Instead he reiterated the abundance of paper tickets, plastic loyalty cards, and individual apps for each store that Passbook is intended to streamline.

There were no other details about iOS 6 save that it will “significantly enhance” the iOS experience.

Despite months of rumors about Apple launching its own HDTV, Tim Cook reiterated the description of the company’s current $99 set-top-box as a “hobby” though he also acknowledged that 4 million sales of the device so far this fiscal year wasn’t a small number overall even if it was dwarfed by iPhone and iPad sales. For this particular quarter, Apple sold 1.3 million Apple TV units. That represented year over year growth of 170%. It’s easy to think that many companies would love to have that kind of “hobby.”

On the subject of how speculation about new products impacts Apple’s sales of iPhones, iPads, and Macs, Cook noted that he and his company “try very hard to keep our product roadmaps secret.” He did follow that up by saying the he and Apple are “not going to spend any energy” in an effort to stop the tech and mainstream media from speculating about Apple’s plans. Given the free publicity that such speculation generates for Apple, it’s hard to disagree with that position.

International markets seem to have been a mixed bag for Apple this quarter. Sales across most of Europe were flat, a fact that Apple attributes to the ongoing euro crisis. Apple sales in China, however, more than doubled compared to last year though factors like the delayed launch of the new iPad and MacBook Pro with Retina Display likely restricted overall growth in China.

Several markets, however, including many in Latin America have experienced “triple digit” iPad growth year over year that Cook described as “bordering on shocking.”

On the subject of emerging markets, where Apple could be seen as pricing itself out of the game because of the cost of the iPhone, Cook said that “people in emerging markets want great products” and that Apple will stick to that core aspect of its DNA in both developed and developing markets.

When asked about the iPhone and mobile carrier subsidies, Cook chuckled good-naturedly and reiterated that Apple’s “role is to make the best smartphone in the world.” Apple expects that to pay off because “carriers want to provide customers what customers want to buy” – a comment that seems to echo T-Mobile USA’s desire to offer the iPhone. He also pointed out that iPhone customers are more valuable in the long run for carriers and that Apple works very closely with carriers to deliver the best iPhone experience possible to customers.

In the end, the biggest statement wasn’t quite the “one more thing” Apple followers grew used to hearing from Steve Jobs, but there are “more amazing products in the pipeline at Apple” – and that’s a pretty exciting comment to hear.





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