As you might expect, Apple’s recently reported drop in iPhone sales for the first time ever has caused some corners to suggest that the iPhone has reached its peak, and that the good times are over for the Cupertino-based company. CEO Tim Cook clearly disagrees, and has hit back at industry analysts and financial pundits by declaring that Apple had “an incredible quarter by absolute standards”. As part of an interview, the enigmatic CEO also set the seed for excitement levels to be raised by proclaiming that Apple has “great innovation in the pipeline”.
Apple’s most recent earnings report has managed to cause a higher-level of doom and gloom than normal. The earnings call saw Apple report a year over year decline in profits, which is the first time that’s happened in the last thirteen years. Sales of the iPhone also dropped by 16-percent during the same period, which staggeringly represents the first decline in iPhone sales in the product’s history.
Those announcements were enough for Apple’s share price to nosedive, but also enough for so-called financial and industry experts to predict that the iPhone has reached its maximum potential, and that the only way the company can go now is down.
We’re used to seeing Tim Cook with a smile on his face, and it seems that not even the generally negative predictions of the experts can cause that to disappear. In typical form, Cook used his media time to wax lyrical about future products. Speaking about product innovation, he said:
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 at Apple, to do things that really enrich people’s lives. That you look back on and you wonder, how did I live without this.
Cook also took the opportunity to apply some context to the recent earnings call:
We just had an incredible quarter by absolute standards, $50 billion in revenue and $10 billion in profits. What we’re seeing is that people are upgrading at a lower rate than they did last year, but still higher than the year before. And so we had this abnormally high upgrade rate last year as people bought into the iPhone 6, and now we’re comparing to that along with the other things going on that many companies are facing, with currency rates and macroeconomics etc.
So, we have $50 billion in quarterly revenue. We have a pipeline of innovation that hopefully we will learn more about in the coming future. We have internal enthusiasm for the Apple Watch and the development of the range. Is Apple in trouble? The Mac-maker may be forty years old with a long history behind it, but as I’ve said previously, it really feels like this company is just getting started.