In an exclusive interview with CNBC’s Jim Cramer earlier today, Apple CEO Tim Cook has addressed the negative sentiment around his company following the recent revenue forecast downgrade, saying that Apple’s growing ecosystem of devices and services is “probably underappreciated” by naysayers on Wall Street.
“In terms of the naysayer, I’ve heard this over and over again,” said Cook during the interview. “I’ve heard it in 2001, I’ve heard it in 2005, in ‘7, in ‘8, in ’10, in ‘12 and ’13. You can probably find the same quotes from the same people over and over again”, Cook continued. “I’m not defensive on it. This is America and you can say what you want”.
“But … my honest opinion is that there is a culture of innovation in Apple and that culture of innovation combined with these incredible, loyal customers, happy customers, this ecosystem, this virtuous ecosystem, is something that is probably underappreciated.”
“I’m never surprised by the market, to be honest with you, because I think the market is quite emotional in the short term,” Cook said when asked about Wall Street’s reaction to the news. “We sort of look through all of that. We think about the long term”.
Meanwhile, veteran analyst and former Apple employee Ben Thompson has explained Apple’s failure to predict its holiday quarter by ‘three errors’ in a recent article over at Stratechery.
According to Thompson, below are the three main errors Apple made:
- The company failed to appreciate the iPhone’s status in China
- It also failed to see the signs that pointed towards the iPhone XR’s struggle
- It blindly believed that iPhone growth is the default state of affairs
At the same time, however, the analyst also believes there are three reasons for optimism about Apple’s future.
- The next iPhone hardware revision should sell better in China, simply by virtue of being new (and the implication of it being easy to switch away from iOS is that it’s easy to switch back).
- Customers still prefer Apple’s flagship iPhones, no matter how expensive they are.
- Headwinds like currency and battery replacement programs will go away, and phones, thanks to their centrality in people’s lives as well as the greater likelihood of harm, will always have a faster replacement cycle than PCs.
Apple will officially report its first-quarter earnings on Feb. 7.