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 posed 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 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.
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.
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 bologna. I call bologna 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.