Future iPhones are going to be so amazing, you probably haven’t even thought of the features Apple is going to add, Tim Cook claimed in a recent interview.
The Apple CEO appeared Monday on Mad Money in an effort to abate the company’s bleeding stock price following last week’s less-than-stellar earnings call. Cook reassured investors that the rumors of Apple’s demise have been greatly exaggerated once again.
While lackluster iPhone sales last quarter have scared off mega-investors and analysts alike, Cook promised some incredible innovation is in the pipeline. In addition to touting upcoming iPhone features, Cook’s wide-ranging conversation with Mad Money host Jim Cramer touched on everything from the Apple Watch being (inaccurately) dubbed a flop to Apple’s growing interest in India and much more.
Here are the highlights:
Wall Street is overreacting
“Yeah, I think that is a huge overreaction,” Cook said of Wall Street’s pullback on Apple stock. “Look we just had actually an incredible quarter by absolute standards — 50 billion plus in revenues and 10 billion in profits. To put that in perspective, the 10 billion is more than any other company makes so it was a pretty good quarter but not up to the Street’s expectations clearly.”
New iPhones are going to be amazing
“We’ve got great innovation in the pipeline for new iPhones that will incent you and other people that have iPhones today to upgrade to new iPhones,” said Cook, tossing in some iPhone 7 hype. “We are going to give you things that you can’t live without that you just don’t know you need today.”
Apple services are underrated moneymakers
“Services now is the second-largest revenue segment at Apple,” Cook said. “It was for last quarter, it was for the first half of the year as far as that goes. And so last quarter we were at 6 billion, up 20 percent. It is fast-growing. You look at what it is, it is things like the App Store, you go and you buy apps far after the sale. You might have subscribed to Apple Music. You might use Apple Pay, you might buy songs, you might rent movies, and so it is all of these things and it really adds up.”
China loves iPhone SE
Cook said he was thrilled with the iPhone SE’s launch in China — and that he screwed up during the conference call by not talking up the prospects presented by the country’s growing middle class. “I could not be more optimistic about China,” Cook said. “I think the long-term thesis is intact: There has never been anything like it in the history of the world. And I’m still as optimistic as I’ve ever been.”
Trust in Apple’s guidance
“There are many different viewpoints [on Wall Street]. And I’m not sure there is a common one,” Cook said. “I mean, that’s the beauty of the Street, is there’s a diverse group of thoughts. But in terms of what we think, which is what I can really attest to, we’re reasonably good at estimating what we think we’re going to do. I’m not saying we’ve always been right or always will be right. But I think if you look back versus our guidance, we’re pretty good with that.”
iPhone has tons of room to grow worldwide
“There are other markets in the world where I think that people sitting here in this country look at it through just a lens of what’s happening in the United States,” Cook said. “And but there are a lot of people in the world who don’t have the pleasure of owning an iPhone yet. And now, the second thing I would point out is the number of switchers that we — switchers are people that were using an Android phone, they switched to an iPhone. Largest ever in the last six months.”
Apple Watch rollout has been sloooooow
“We wanted to roll out [the Apple Watch] slowly,” said Cook. “To put it in perspective, you can buy Apple Watch in 14,000 locations. You can buy the iPhone at over 200,000. And so we’re still in learning mode. We’re learning fairly quickly, though. We know a lot more than we did a year ago. And you’ll see the Apple Watch getting better and better.”
Seriously, Apple has crazy innovations en route
“I would tell you that we’re incredibly excited about things we’re working on,” Cook said. “Incredibly excited. And so I don’t want to be more specific than that. But I think that the other thing maybe that’s worth pointing out is, if you kind of look at all the things Apple has done over time, at the time they were done they were rarely ever seen like they were in retrospect.”
History will judge Apple Watch as an overnight success
“If you look at iPod, iPod wasn’t viewed as a success, but today it’s viewed as an overnight success,” Cook said. “The iPhone was the same way. People were writing about there’s no physical keyboard. Obviously nobody would want [the iPhone]. And so I think that in a few years we will look back and people will say, ‘How could I have ever thought about not wearing this watch?’ Because it’s doing so much for you. And then it will all of a sudden be an overnight success.”