#tim cook

We would like to thank all of our customers for making this our best launch ever, shattering all previous sell-through records by a large margin. While our team managed the manufacturing ramp better than ever before, we could have sold many more iPhones with greater supply and we are working hard to fill orders as quickly as possible.
Tim Cook, announcing that Apple sold over 10 million iPhone 6 and iPhone 6 Plus’ over the weekend. 

Quick Observations On Apple’s Q2 2014

In no particular order:

  • A 7-for-1 stock split is insane (in a good way).
  • 800 million iTunes accounts and almost all of them have credit cards attached. This is perhaps the most important (and to some extent, most overlooked) part of Apple’s business going forward. They’ll hit a billion very soon.
  • Tim Cook’s second explanation on the iPad “miss” was better than his first. At first, he said it was channel inventory and sell-through. But later he spoke about how fast it grew — faster than any other product Apple has ever done — and implied that it’s hard to maintain such growth. Both explanations may be true, but the first is a technicality, the second is something everyone should be able to understand.
  • iPad revenue for the quarter was $7.6 billion. If my math is correct, the iPad has brought it roughly $32 billion in revenue in the past 12 months. If it were a stand-alone business, those numbers would place it in the top 100 of the Fortune 500. Think about that for a second.
  • By the same count, the iPhone as a stand-alone business would be in the top 25 of the Fortune 500.
  • Overall, this quarter was only the 15th best in terms of profit in the history of any company in the world.
  • Apple cash horde was actually down this quarter due to the buybacks. But it was almost all U.S. cash that was down — Apple still refuses to repatriate the overseas cash and instead is borrowing debt to pay for these massive buybacks. At one point, it sounded like Apple was basically (but indirectly) asking the U.S. for a tax holiday to bring some of their money back to the U.S.
  • The iPhone ASP decreased by quite a bit. But it wasn’t because the iPhone 5c is selling well, it’s because the iPhone 4S continues to sell well.
  • That said, margins overall were still amazing at 39.3 percent.
  • Angela Ahrendts is starting next week, nullifying reports to the contrary.
  • Tim Cook continues to sound more confident about the Apple TV as a product category as he announced “about” 20 million units sold. If I had to guess, I think we’ll see a new Apple TV product announced well before the iWatch this year.

Yes, that’s Tim Cook narrating. As Rene Ritchie notes:

My best guess as to why Tim Cook narrated the “Better” video is because it speaks to Apple’s core values, and speaking to Apple’s core values is both deeply important to Tim Cook, and how he’s been positioned atop and within Apple.

You can say Tim Cook is not a product guy, but there’s no question that he knows better than anyone how Apple does what it does. And because he cares about it, he’s made that process… better.

Yukari Iwatani Kane on Apple under Tim Cook:

Apple under Jobs was a roller coaster, but Cook’s operations fief was orderly and disciplined. Cook knew every detail in every step of the operations processes. Weekly operations meetings could last five to six hours as he ground through every single item. His subordinates soon learned to plan for meetings with him as if they were cramming for an exam. Even a small miss of a couple of hundred units was examined closely. “Your numbers,” one planner recalled him saying flatly, “make me want to jump out that window over there.”

Cook had made a particular point of tackling Apple’s monstrous inventory, which he considered fundamentally evil. He called himself the “Attila the Hun of inventory.”

Meetings with Cook could be terrifying. He exuded a Zenlike calm and didn’t waste words. “Talk about your numbers. Put your spreadsheet up,” he’d say as he nursed a Mountain Dew. (Some staffers wondered why he wasn’t bouncing off the walls from the caffeine.) When Cook turned the spotlight on someone, he hammered them with questions until he was satisfied. “Why is that?” “What do you mean?” “I don’t understand. Why are you not making it clear?” He was known to ask the same exact question 10 times in a row.

No one questions that Tim Cook’s leadership is vastly different from that of Steve Jobs. But that doesn’t necessarily mean he’s any easier to work for. This paints him as demanding, but in different ways.

Apple CEO Tim Cook, talking to Daisuke Wakabayashi:

Last year, we grew (revenue) by $14 billion to $15 billion. Yes, those percentages are smaller compared to a year earlier and two years earlier and so forth. But that doesn’t mean that you’re not a growth company. We were in hyper-growth, or whatever is above growth. We went from $65 billion to over $100 billion to $150 billion to $170 billion. These are historic, unprecedented numbers. I don’t know any companies adding growth at that level. So when you say $14 billion to $15 billion compared to those numbers, it’s clearly smaller and a smaller percentage, but, to put it in some context, that’s like adding three Fortune 500 companies in a year. I think that’s hard to say that’s not a growth company.

This is another way to articulate the Law of Large Numbers issue that Apple faces. And it’s certainly hard to argue with.

Tim Cook:

We urge senators to support the Employment Nondiscrimination Act, and we challenge the House of Representatives to bring it to the floor for a vote.

Protections that promote equality and diversity should not be conditional on someone’s sexual orientation. For too long, too many people have had to hide that part of their identity in the workplace.

Those who have suffered discrimination have paid the greatest price for this lack of legal protection. But ultimately we all pay a price. If our coworkers cannot be themselves in the workplace, they certainly cannot be their best selves. When that happens, we undermine people’s potential and deny ourselves and our society the full benefits of those individuals’ talents.

How on Earth could you argue with this?

Henry Blodget:

If Apple continues to focus on products and customers, in other words, Apple’s stock price will take care of itself. But I know that is not what you are hearing these days from another Apple shareholder, Carl Icahn. Mr. Icahn, who just bought your stock last month — and owns only a fraction of one percent of the company — is demanding that you immediately engage in a massive financial engineering scheme to boost your stock price and give him and other short-term traders a quick payoff.

I definitely don’t agree with all of this, but it’s mainly level-headed thinking against some of Icahn’s ridiculous ideas. (Which Apple undoubtedly knows are ridiculous too, of course.)

Joshua Brustein:

The biggest prize for Nike may have come last week, when Apple (AAPL) said its new iPhone would have sensors allowing people to use their phones to keep track of their Fuel points. Apple’s oft-predicted, never-confirmed smartwatch would presumably be a major threat to the FuelBand, but the two companies seem pretty cozy right now. Nike said on Tuesday that it still has no plans to make a Nike+ app for Android, and Olander indicated there are too many devices on the Android operating system to offer a consistent user experience. (He didn’t mention anything about Apple Chief Executive Officer Tim Cook’s presence on Nike’s board.)

Maybe this is naiveté, but given all the signals between the two companies recently (number one being that Tim Cook is still on Nike’s board), I’m starting to be more sure that any wearable Apple does will be in cooperation with Nike, not opposed to them.