Tim Cook: loyalty rates have never been higher
The once untouchable Apple has recently become the subject of the same kind of scrutiny, even prophecies of doom, that its rivals, like Samsung, have been enduring for the past years. All for a series of numbers for the past months that have failed to meet analyst projections. Some are going as far as saying that Apple, or at least innovation in Apple, is dead. Unsurprisingly, CEO Tim Cook remains undaunted. In an interview with CNBC, the chief exec tried to correct the perspective, claiming that what's important for Apple right now, more than its first quarter earnings, is customer loyalty.
A huge overreaction. That's how Cook characterized how the media has been stirring things regarding Apple's recent market performance, both at home and abroad, particularly in China. Lower than hoped for iPhone sales, even with the iPhone SE, and a recent block to its services in China are all being portrayed as the writing on the wall. Apple has risen too high, too fast and now there is nowhere else to go but either stay or go down.
Tim Cook wants to correct what is to him a rather skewed perspective. Although it fell short of expectation or even compared to last year's first quarter, it still earned 10.5 billion in the past three months, which is more than what other companies have made. He attributes this disappointing state of affairs to factors that affect the industry as a whole, not just Apple, including generally slower smartphone adoption rates and weaker currencies.
He emphasizes, however, that what is important for the company right now is customer satisfaction, and there he claims Apple is passing with flying colors. "Customers love our products," claims Cook. Loyalty has never been higher and satisfaction is at its highest. It's probably stating the obvious, though, as Apple users are known to be a very loyal bunch. Some might even say fanatical. Nonetheless, that loyalty goes a long way in keeping sales from tanking.
The CEO also had a few words to share about the company's two biggest, newest markets, China and India. He explains that the Chinese smartphone market is also experiencing a slowdown, which was already predicted by many market analysts years before. However, Apple is also seeing a much higher migration rate, from Android to iPhone, as much as 40% compared to last year. India is also a key market. The country only recently got LTE services, which means that Apple's iPhones will finally be of more use there. While the smartphone does function on 3G or lower, much of its appeal and strengths are found in the services that require fast and decent Internet connections.
And that is another reason why Cook is shrugging off media's doom and gloom scenarios. Much of the coverage have revolved around the iPhone and while Apple is still primarily a hardware company, it has grown beyond that. App Store revenue, Apple Music subscriptions, and Apple Pay usage all drive profit towards Cupertino. Services have become an equally important and profitable part of Apple's products and will continue to do so as long as there are Apple devices in people's hands.
SOURCE: CNBC