Apple Inc. (NASDAQ:AAPL) is being meticulously analyzed in nearly every way possible at the moment, but one thing’s clear: Cupertino’s latest quarter was a beat. See our full recap of Apple’s Q2 earnings release here, where we discuss things like: Apple Inc. (NASDAQ:AAPL)’s decision to increase their buyback and boost dividends while using debt in the process, in addition to the current balance of the company’s total cash position.
Apple stock has traded relatively sideways in the after-hours markets, as there were likely a few investors disappointed that Tim Cook and Co. didn’t announce what its next major product category would be, or if there was a specific time-frame for it. The fact that Apple’s share price briefly jumped after the beat was announced indicates that investors had optimism of a big reveal, only to be left hanging by 6pm EDT. Nonetheless, we thought it was important to take you through a few key points from Apple Inc. (NASDAQ:AAPL)’s Q&A session of the conference call.
When asked about low-cost products from Apple in general, Cook and Peter Oppeheimer had a couple interesting points to make:
“We believe deeply that there are people in every part of the world that want great products […] we’re willing to make short-term trade offs and profits where we see long-term potential.”
When the duo was asked about Apple’s future in the so-called ‘phablet space,’ with the question, “Whats your thoughts of the 5-inch phone market […] versus your 4 inch product,” Tim Cook’s response was a bit surprising.
He said, Apple Inc. (NASDAQ:AAPL)’s “iPhone 5 has the absolute best display in the industry […] some customers value large screen size, others value other factors such as resolution […] compatibility with apps, many things. Our competitors have made significant trade offs in many of these.” More importantly, he stated “We would not support a larger-size iPhone while these trade offs exist,” which implies that there may be a future where those “trade offs” do not exist. We’ll have to wait and see.
Every one’s favorite Apple analyst, Gene Munster, asked the question that everybody in the world knew he’d ask: clarity about if Cook’s mention of “new product categories” earlier in the call was correct.
Tim Cook’s response to the question was as to be expected: “I did, Gene, I said that one of our areas for growth are potential new categories, and we’re very excited about those […] I didn’t announce a specific time frame.”
More cryptically, Apple Inc. (NASDAQ:AAPL)’s Cook shed a bit of light on how he sees these products being used, which again, is no surprise to anyone: “When we integrate things well, people use them a lot more. Those concepts by themselves are huge advantages from a customer-specific point of view, and from the metrics you’re talking about [new products].”
It could have also been reasonably guessed that any Apple earnings call would be met with a question on the struggling state of the PC market.
Continue reading on the next page for Apple and Cook’s comments:
Cook had this to say about Apple’s place in the PC market:
“The market for PCs are incredibly weak […] the largest decline I can remember. At the same time we also sold 20 million iPads, and it’s also true that some of those cannibalized Macs […] I personally don’t think it’s a huge number […] with that said, I don’t think this market is a dead market […] we’re going to continue to innovate in it […] the huge growth in tablets may end up benefiting the Mac […] people may be even more willing to buy a Mac. We’re going to continue making the best personal computers. Our strategy’s not changing, and we fell really good about it.”
“This is an area we’re continuing to invest in.”
For a longer take on Apple Inc. (NASDAQ:AAPL)’s latest conference call, read about it here, on Insider Monkey.