8 takeaways from Apple’s Q4 2016 earnings call

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Apple's Q2 earnings weren't that impressive.
iPhone sales were down in Q4 2016.
Photo: Ste Smith/Cult of Mac

Apple can’t make enough iPhone 7 devices to satisfy demand from customers (and from Wall Street to make more money).

During Apple’s Q4 2016 earnings call today, Apple CEO Tim Cook and CFO Luca Maestri hinted that big things are in the pipeline that should put the company back on track to growth — and it all starts Thursday with the MacBook Pro.

Here’s what we learned from the Q4 earnings call:


MacBooks are coming

Touch bar
The Magic Toolbar would be perfect for Siri.
Photo: Ste Smith/Cult of Mac

Mac sales declined slightly to 4.9 million last quarter, but the install base is at an all-time high. Apple CFO Luca Maestri hinted that new products introduced this quarter should give the category a boost. Tim Cook opened by raving about the MacBook, so you can expect new units are on the way. (As if the Russian trademarks and leaked images in macOS Sierra weren’t enough proof.)

Services are growing

Apple’s slumping iPhone sales have been aided by its booming services business, which includes iCloud, iTunes, the App Store and Apple Music. Services revenue climbed 22 percent in Q4 2016. Apple projects its Services business will be big enough to be its own Fortune 100 company by the end of 2017.

Apple Car non-denial

Apple's car project has stalled.
Apple’s car project has stalled.
Photo: Motor1

The latest Project Titan rumors suggest Apple faces some serious roadblocks with its car initiative, but Tim Cook seemed optimistic when asked about how Apple is looking to get into the space.

“I can’t speak about rumors, but as you know we look for ways that we can improve the customer’s experience on different sets of products,” said Cook. We’re always looking at new things…. For the car space in general it’s clear that technologies will revolutionize the experience…. But nothing to announce today.”

Apple is investing heavily in R&D

Even though Apple’s R&D spending has doubled over the last three years, profits haven’t been up by the same margin. Cook was asked why the R&D investments aren’t making Apple any money yet, and the CEO teased that some cool stuff is in the works.

“There’s clearly some amount of R&D that are on products that are in the development phase that have not reached the market,” said Cook. “We feel really great about the things that we got.”

iPhone 7 demand is huge

jet black iphone 7 plus
Apple can’t crank out enough jet black iPhone 7 Plus units.
Photo: Apple

Apple should be dominating the market now, considering Samsung’s Note 7 flameout. So an analyst asked Cook and Maestri why iPhone sales are still flat while the competition is struggling.

“We are selling everything that we can produce,” Luca said. The CFO explained that demand for the jet black iPhone 7 Plus exceeded Apple’s expectations — and the company isn’t certain when supply will finally catch up.

More original content is coming

A few days ago, Apple VP Eddy Cue said Apple would have made Game of Thrones if it had the opportunity. During today’s earnings call, Cook reiterated that the company is still considering a lot other TV options.

“Television is an intense interest with me and many other people here,” Cook said, noting that Apple is focusing on some original content and he “thinks it is a great opportunity.”

Siri speaker may not happen

google home speaker
Google Home is taking on the Amazon Echo, but so far there’s no Siri challenger.
Photo: Google

Google Home and Amazon’s Echo smart speaker have been the darlings of the tech world lately, but Apple sounds confident that Siri on iOS and macOS is still the way to go. Siri currently gets 2 billion requests per week.

“Most people would like an assistant with them all the time,” said Cook. “The advantage of having an assistant on your iPhone is it’s with you all the time. That doesn’t say there is not a nice market for a home one…. I think the usage of the [assistant] on the phone will be much greater.”

Apple does have a plan for the future

Perhaps the most interesting part of the call was when an analyst asked Cook if the company had a strategic plan for the next three to five years, or if it just reacts to the market.

“We have a strong sense of where things are going to go and we’re agile enough to shift if we need to,” Cook responded sternly, adding that he is supremely confident in Apple’s product pipeline, but he’s not going to talk about it.