Apple CEO Tim Cook Lauds Office On iPad, Chides Microsoft For Not Delivering It Earlier
“If it had been done earlier, it would’ve been better for Microsoft frankly,” Cook said about Office’s arrival on Apple’s tablet, which is indeed something users have been asking about for years, ever since the original launch of the iPad itself. To its credit, Microsoft did manage to deliver a solid product that really does nail the tablet user interface and a mobile user experience, even if it is a shame that its full functionality is locked behind the requirement for a recurring Office 365 subscription.
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9 Key Takeaways From Apple’s Surprising Earnings Call
Photo: Alex Washburn/Wired
Apple turned what could have been a deathly boring financial ritual into an occasion for celebration Wednesday, posting record numbers and making headlines with some unexpected moves.
Here’s our take on everything you need to know from the latest quarterly earnings call.
Apple is rich
First off, let’s take a look at the cash Apple has on hand — $150 billion to be exact. Tim Cook stressed that this enormous pile of money would be used to focus on Apple’s top priority: making amazing products and investing in the essentials (retail, marketing, new markets, supply chain). “We are not going to underinvest in this business,” he said.
Apple shares more wealth
Two massive initiatives will let Apple share all that wealth with investors. First off, Apple took the wraps off an almost unheard of seven-to-one stock split, causing one veteran financial reporter to tweet his surprise. “I’ve followed $AAPL for 18 years,” tweeted Arik Hesseldahl (@ahess247). “Rarely been as surprised by an earnings report as I was today.
Meanwhile, Apple is adding about $30 billion to its Capital Returns program. Usually cranky super-investor Carl Icahn (or is that iCahn?) sounds stoked about the boost to the stock-buyback program. “Agree completely with $AAPL’s increased buyback and extremely pleased with results,” he tweeted. “Believe we’ll also be happy when we see new products.”
Apple’s announcements received a ton of attention on Wall Street, and after-hours trading rocketed the stock price up 7.65 percent (about $40 per share) as of this writing.
Apple still knows how to innovate
Innovative new products are in the pipeline, Cook assures us, but for now, Apple fans (and stockholders) can try to wrap their heads around that crazy seven-to-one stock split. Seven-to-one? WTF? Cupertino’s innovative boardroom maneuvers prove Apple still possesses an uncanny ability to shock and awe — even when it comes to mundane matters like stock splits and capital returns.
The new CFO is dreamy
Everyone loves Luca Maestri, says our resident Italophile Nicole Martinelli. Listening to the incoming Apple CFO discuss gross margins and operating expenses was like relaxing in a soothing bath of Prosecco. Smart, dapper and loaded for bear with a tantalizing yet understandable Italian accent, Maestri stole the show from outgoing CFO Peter Oppenheimer.
The iPad is all-around amazing
Speaking of the smooth-as-silk Maestri, his take on the iPad was flattering, as he pointed out that two-thirds of iPads registered last quarter were snapped up by first-time iPad owners. It’s clear who’s winning the tablet wars. “iPad accounts for four times the web traffic of all Android tablet users combined,” said Maestri.
Similarly, Cook jumped in during the Q&A session near the end of the hour-long call to sing the praises of Apple’s tablet, telling investors, “I am very bullish on iPad.” He noted it’s the only Apple product to become an instant hit in three key markets: consumer, business and education. They’ve sold 210 million iPads in only four years. Even more surprising, iPads are used by 98 percent of Fortune 500 companies, and 91 percent of tablets activated at the enterprise level were iPads. Many businesses have written key proprietary apps that embed the iPad deeply within the companies’ operations.
The iPod is a dead man walking
The iPod started the mobile revolution, but it was only mentioned as a past achievement during Wednesday’s call. Sales of the music players continue to plummet as listeners move to streaming services like Spotify, Pandora and iTunes Radio. The iPod era is ending with a whimper, not a bang.
Apple TV is not a hobby
Amazon’s Fire TV might have stolen some brain share in the past couple of weeks, but Tim Cook isn’t worried. During the call, he reminded us all that Apple’s little no-longer-a-hobby set-top box is making so much damn money that we all have to take it seriously.
“When you look at the sales of the Apple TV box itself and the content bought off the Apple TV,” he said, “for 2013 that number was over $1 billion. It didn’t feel right to me to call something that’s making $1 billion a hobby.”
As for Amazon? “Apple TV compares extremely favorably to the content that is on the Amazon FireTV,” Cook said. So there.
China is the new Wisconsin
Apple is making inroads in new corners of the world. “There’s a number of markets out there where we’re beginning to really catch on to a number of customers,” said Cook in response to a question. “I am particularly proud of the results in these markets. These have not been historic strong points for Apple.”
Perhaps most encouraging: China sales grew 13 percent year-over-year, Cook said, with an all-time revenue record in greater China of $9.8 billion. iPhone sales rose 28 percent and Mac units rose 13 percent in the country. All of this, Cook pointed out, far outpaced predictions made by market research firm International Data Corporation. iTunes services revenues more than doubled year-over-year and iPad demand has grown by 6 percent (IDC predicted flat tablet growth). “I feel like there’s still loads of opportunity there,” Cook said.
Tim Cook is fierce
Every time our new fearless leader took the lead during the earnings call, he sounded rock-solid. When answering questions, he was direct, clear and unerringly optimistic. For example, when Office for Mac came up, his answer was, basically, bring it. “If it had been done earlier it would have been even better for Microsoft, frankly,” he said.
Is Cook finally stepping out from the shadow of Steve Jobs? If nothing else, the current Apple CEO is tough, no-nonsense and as fierce as a lioness defending her cub. If, of course, her cute little furball was the biggest company in the world.
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Apple Sold 20 Million Apple TVs, Which Are Now Far From A Hobby
“We’ve got a pretty large installed base there,” Cook said, speaking to competitors. He feels the Apple TV stands “extremely favorable” against other streaming devices like the new Amazon Fire TV.
Cook failed to go into future plans in the space. He didn’t reveal any upcoming Apple TV features or partnerships. But with this sort of traction, why change course?
Daily Roundup: Samsung's love of plastic, Siri for Apple TV and more!
By the numbers: a breakdown of Apple’s Q2 2014 earnings call
But, as with any earnings call, the numbers that define Apple’s success or failure in the market took center stage. Here are some of the big ones you might have missed:
$150.6 billion – The size of the cash pile Apple is current sitting on
98% - Customer satisfaction rating for the iPad Air and iPad mini with Retina Display
95% - iPad’s current share of the U.S. education tablet market
4x - The amount of web traffic generated by iPad users in comparison to Android devices. As in, all Android devices. Every single one combined.
24 – The number of companies Apple has acquired in the past 18 months
800 million - The number of iTunes accounts in use worldwide
60% – The percentage of new iPhone 5c users who made the jump from Android
62% - The percentage of users who switched from Android to the iPhone 4s. Yeah, that’s right. The iPhone from 2011.
50% – The iPhone’s current market share in Japan
Filed under: AAPL Company Tagged: 4S, 5C, Angela Ahrendts, earnings call, iPad, iPhone, iTunes, luca maestri, Market share, Q2 2014, Tim Cook Visit 9to5Mac to find more special coverage of AAPL Company, iPhone, and iPad.What do you think? Discuss “By the numbers: a breakdown of Apple’s Q2 2014 earnings call” with our community.
Apple CEO Tim Cook Lauds Office On iPad, Chides Microsoft For Not Delivering It Earlier – techcrunch.com
Gawker Killer Asteroid Coming Relatively Soon | Jezebel Heads Up: Lots of People Have Herpes. – gizmodo.com
9 Key Takeaways From Apple’s Surprising Earnings Call – cultofmac.com
Apple Sold 20 Million Apple TVs, Which Are Now Far From A Hobby – techcrunch.com
Daily Roundup: Samsung's love of plastic, Siri for Apple TV and more! – engadget.com
By the numbers: a breakdown of Apple’s Q2 2014 earnings call – 9to5mac.com