In an interview with CNBC’s Mad Money host Jim Cramer, Apple CEO Tim Cook discussed his thoughts on innovation, the future of the iPhone and the Apple Watch, the growth of Apple services, Apple’s performance in China, and more.
Firstly, when questioned about the first ever dip in iPhone sales and the smartphone reaching its peak, Cook said he “couldn’t disagree more.” He said the dip in sale is due to a large number of people upgrading to the iPhone 6 in 2014. Perhaps more importantly, the CEO teased some “great innovation” that is in the pipeline. He said that the new iPhones “will incentivize you and other people that have iPhones today to upgrade to new iPhones”.
Jim Cramer: Let’s talk about shorter term that has captivated the narrative. Tony Sanguinetti good analyst on your call all the time tells the New York Times there’s no question that Apple’s best days are behind it the company grew at astronomical rates and it is now so big that its ability to grow at these rates doesn’t exist anymore. There’s an obituary.
Tim Cook: Yeah, I couldn’t disagree more. Here’s what I see. We are in some incredible markets the smartphone market eventually everyone in the world will have a smartphone. Penetration today is in the 40s a long way to go. Emerging markets like India LTE penetration is zero we’ve got great innovation in the pipeline new iPhones that will incent you and other people that have iPhones today to upgrade to new iPhones.
He reiterated Apple’s future plans later in the interview when questioned on whether Apple is still innovating. “We’re fairly secretive,” he said, “but I would tell you we’re incredibly excited about things we’re working on”.
We’ve got great innovation in the pipeline. New iPhones that will incentivize you and other people that have iPhones today to upgrade to new iPhones.
We are going to give you things you can’t live without that you just don’t know you need today. That has always been the objective of Apple. To do things that really enrich people’s lives. That you look back on and you wonder how did I live without this.
Talking about the Apple Watch, Cook said that the smart watch will keep “getting better and better” and the company still in learning mode about it. He then compared the success of the Apple Watch to that of the iPod, which was not deemed as a success initially, but is now viewed 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. […]
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.
On China, Cook said he “could not be more optimistic” about the country. The CEO said that the Android-to-iPhone switching rate in China has been “huge” in the first half of 2016 compared to the same period in 2015. He also revealed that Apple is working closely with Chinese regulatory authorities to bring back the iTunes Movies and iBooks store back online in the country.