HOW HARD THEIR SALES OF IPHONES AND OTHER THINGS WERE
HIT.
HIT. BUT HERE COME THE FIGURES FROM
APPLE.
APPLE. THEY ARE JUST CROSSING RIGHT
NOW.
NOW. SUSAN LI, WHAT DO WE SEE?
>> BEAT ON TOP AND BOTTOM LINES
FOR APPLE.
FOR APPLE. IN PROFIT, THE ACTUAL NUMBER,
THEY MADE 2.55 IN EARNINGS PER
SHARE.
SHARE. THAT WAS AHEAD OF ESTIMATES.
WE WERE LOOKING FOR 2.26 IN THE
QUARTER.
QUARTER. REVENUE AHEAD OF SALES,
58 BILLION THIS YEAR.
ANALYSTS WERE LOOKING FOR
54 BILLION.
54 BILLION. INCREASING BUYBACKS BY
$50 BILLION.
$50 BILLION. NOW IN THE QUARTER, YOU HAVE TO
CALL IT STRONG BECAUSE THEY SAW
GROWTH, EXPERIENCED PROBLEMS OF
COVID-19 FIRST IN CHINA AND THEN
SPREAD AROUND THE WORLD AND NOW
THE U.S. AS WELL ALL-TIME RECORD
WHEN SERVICES AND WEARABLES.
THOSE ARE SHALL WE SAY THE
BRIGHT SPOTS.
BRIGHT SPOTS. A FORTUNE 140 COMPANY ACCORDING
TO TIM COOK WHO I SPOKE TO ON
THE PHONE.
THE PHONE. BRING IN QUOTES FROM MY
CONVERSATION WITH TIM COOK.
HE HIGHLIGHTED SERVICES IN
PARTICULAR.
PARTICULAR. HE SAYS THE SERVICES BUSINESS
HAD AN ALL-TIME RECORD.
13.3 BILLION.
13.3 BILLION. 17% INCREASE YEAR ON YEAR.
WE HAVE OVER 515 MILLION PAID
SUBSCRIPTIONS ACROSS THEMA
PLATFORM.
PLATFORM. THAT IS 125 MILLION YEAR ON
YEAR.
YEAR. NO GUIDANCE THOUGH IN THIS
REPORT CARD.
REPORT CARD. IF WE BRING UP THE QUOTE ON
GUIDANCE, WE HAVE LOTS OF
CONFIDENCE ACCORDING TO TIM COOK
AT LEAST IN THE LONG TERM.
WE HAVE VERY LIST VISIBILITY IN
THE SHORT TERM.
SO BECAUSE OF THIS WE’RE NOT
GUIDING WHICH WE TYPICALLY DO AS
YOU KNOW.
YOU KNOW. WE HAVE, BUT WE’RE GOING TO DO
THIS NOT THIS PARTICULAR QUARTER
BECAUSE IT WOULD SEEM TO SEND A
SIGNAL WE KNOW WHAT IS GOING ON
WHEN IN REALITY IT IS HARD TO
SEE OUT THE WINDSHIELD WHAT IS
HAPPENING RIGHT NOW.
IN TERMS OF CHINA, IN MARCH HE
SAYS WE REOPENED STORES THERE.
WE ACTUALLY STARTED IN FEBRUARY
REOPENING STORES.
REOPENING STORES. THEY WERE ALL REOPENED BY
MID-MARCH.
MID-MARCH. WE SAW A BEGINNING NICE RECOVERY
IN MARCH IN CHINA.
WE’VE SEEN FURTHER RECOVERY IN
THE MONTH OF APRIL.
SO THAT IS HOW CHINA IS GOING.
OUR SUPPLY CHAIN IS BACK OFF,
BACK UP TO FULL SPEED BEFORE THE
END OF MARCH, WHICH I THINK IS
ENCOURAGING, GIVEN THEY RELEASED
THREE DEVICES DURING THIS
QUARANTINE AND COVID-19 SPREAD
AND INCLUDING THE AIR MAC,
MACBOOK AIR, PARDON ME, iPHONE
SE RELEASE.
SE RELEASE. IN TERMS OF THE ECONOMIC
RECOVERY HERE IN THE U.S. I’M
OPTIMISTIC ABOUT THE RECOVERY
HERE IN THE UNITED STATES
BECAUSE OF STIMULUS PROGRAMS
THAT HAVE BEEN SIGNED INTO LAW.
SO I’M OPTIMISTIC THAT THE U.S.
CAN RECOVER.
CAN RECOVER. I’M NOT AN ECONOMIST.
I’M AN OPTIMIST, THAT I AM FIRST
TO ADMIT.
TO ADMIT. HERE IN THE U.S. HE IS
OPTIMISTIC.
OPTIMISTIC. WHAT ABOUT STORES REOPENING?
THAT IS PRETTY MUCH LIMITED THE
DEVICE SALES THAT THEY HAVE SEEN
IN THE FIRST THREE MONTHS OF THE
YEAR.
YEAR. THEY REOPENED SOUTH KOREA A FEW
WEEKS AGO AND THEY ONLY HAVE ONE
STORE THERE.
STORE THERE. THE NEXT STORES OPEN WILL BE
AUSTRALIA, AUSTRIA.
AUSTRALIA, AUSTRIA. WE WILL HAVE ALL THE STORES OPEN
IN AUSTRALIA.
IN AUSTRALIA. THEN VIENNA, AS YOU SEE YAW.
THEN CITY BY CITY IN THE U.S.
THEY WILL HAVE STORES OPEN
SOMEWHERE MIDDLE PART OF MAY.
THAT IS JUST A FEW.
IT HAS TO RAMP UP FROM THERE.
ONLY IF IT IS SAFE TO DO SO.
HE IS OPTIMISTIC THINGS CAN
RECOVER HERE IN THE U.S. IN
TERMS OF DEVICE SALES HEADING
INTO YEAR-END, SEPTEMBER,
OCTOBER, THEY DON’T OBVIOUSLY
TALK ABOUT DEVICE RELEASES BUT
IT SOUNDS OPTIMISTIC.
CONNELL: REALLY GOOD INSIGHT
FROM SUSAN LI THAT CONVERSATION
APPLE FOR US AND CONVERSATION
WITH TIM COOK.
SUSAN, WE APPRECIATE THAT.
MELISSA, TAKE IT AWAY.
MELISSA: YEAH, GREAT REPORTING.
GARY B. SMITH AND LANCE ULANOFF
ARE BACK.
ARE BACK. LANCE, IT IS ALMOST ANNOYING HOW
GOOD TIM COOK IS.
I MEAN HE JUST CRUSHES IT.
THEY HAVE SO MUCH CHINA
EXPOSURE.
EXPOSURE. THAT WAS SUCH A BIG CONCERN, AND
HE ABSOLUTELY CRUSHED IT.
TALKING ABOUT REOPENING THOSE
STORES GIVES EVERYONE HOPE.
WHAT ARE YOUR THOUGHTS WHAT WE
JUST HEARD?
JUST HEARD? I WANT TO CRY I’M SO HAPPY?
>> YEAH.
>> YEAH. DEFINITELY DID WELL.
REALLY AN INTERESTING STORY
BECAUSE YEAR-OVER-YEAR iPHONE
SALES A LITTLE BIT DOWN.
SALES ON THE OTHER HARDWARE A
LITTLE BIT DOWN.
WINS ARE IN SERVICES AND
WASHABLES.
WASHABLES. SERVICES, WE’RE GOING TO USE A
LOT MORE SERVICES STUCK AT HOME.
JUST THE WAY I WAS THINKING WITH
AMAZON AND APPLE THERE IS A
LEVEL OF UNCERTAINTY NOW.
YES.
YES. THIS QUARTER THEY DID WELL.
I NEVER BET AGAINST APPLE.
WE NEVER KNOW WHAT PEOPLE’S
ECONOMIC SITUATION WILL BE OVER
NEXT SIX MONTHS.
APPLE IS WORKING ON THE NEXT
IPHONE.
IPHONE. IT DID DO SOMETHING REALLY
INTERESTING IN THE NEAR TERM.
WE HAVE THE iPHONE SE.
SECOND GENERATION iPHONE.
399-DOLLAR BRAND NEW iPHONE
JUST RELEASED WHICH COULD NOT BE
BETTER TIMING.
BETTER TIMING. APPLE MAY SET ITSELF UP FOR
SERIES OF STRONGER QUARTERS, THE
WAY IT IS POSITIONING THINGS,
EVEN IF FOR EXAMPLE, iPHONE
12, WHATEVER WE’RE CALLING IT,
DOES SLIP BECAUSE OF SUPPLY
CHAIN ISSUES.
CHAIN ISSUES. MELISSA: GARY, DRILL DOWN ON
THAT A LITTLE BIT.
WE’RE LOOKING AT NUMBERS UP ON
THE SCREEN.
THE SCREEN. YOU SEE A BIG HUGE BEAT THERE,
ON BOTH EARNINGS AND REVENUE.
I WILL SAY IT AGAIN, LOOKING AT
MY GOSH, THIS THING STARTED IN
CHINA.
CHINA. IF ONE COMPANY WILL GET HIT VERY
HARD IS APPLE BECAUSE THEY HAVE
SO MUCH EXPOSURE.
LOOK THE WAY HE MANAGED OUT OF
IT.
IT. >> EXACTLY.
>> EXACTLY. LANCE MADE GOOD POINTS ABOUT HOW
MUCH OF THEIR GROWTH I THINK IS
COMING FROM SERVICES.
THIS IS REALLY A TALE OF TWO
COMPANIES, MELISSA.
COMPANIES, MELISSA. IT IS KIND OF A HALF OF A
HARDWARE COMPANY.
HARDWARE COMPANY. AND I KIND OF DISCOUNTED IT
BECAUSE I HAD AN iPHONE 7 ALL
ALONG, MY GOSH, IN THE LAST
WEEK, MAYBE I WAS, KIND OF
PREDICTER OF THE SUCCESS.
I GOT AN iPHONE 11.
THE POINT ABOUT THAT IS, THEY
ARE KIND OF THIS HALF HARDWARE
COMPANY BUT IT IS KIND OF
HARDWARE PEOPLE CAN’T SEEM TO
LIVE WITHOUT.
LIVE WITHOUT. YOU KNOW IT, I KNOW IT.
YOU GO OUT AND SEE PEOPLE
STANDING AROUND, EVERYONE IS ON
AN iPHONE, NOT AN iPHONE BUT
PHONE LIKE THIS, WHETHER IT IS
THAT OR SAMSUNG, BUT MOST ARE
iPHONE.
iPHONE. YOU HAVE THAT SERVICES PART.
THEY HAVE GOTTEN IN EVERYTHING
FROM APPLE PAY TO APPLE MUSIC.
THEY’RE NOT AFRAID TO TRY NEW
THINGS.
THINGS. APPLE TV LOOKS LIKE KIND OF A
WHIFF TO ME.
I DON’T THINK THERE IS BUZZ
ABOUT THAT.
ABOUT THAT. YOU’RE EXACTLY RIGHT.
TIM COOK MANAGED HIS WAY HAVING
SO MANY FINGERS IN SO MANY
DIFFERENT AREAS, YOU KNOW, LANCE
IS RIGHT.
IS RIGHT. WHO KNOWS WHAT THE CONSUMER
SPENDING ON THE HARDWARE SIDE IS
GOING TO BE LIKE COMING OUT OF
THIS.
THIS. IT IS KIND OF LIKE AMAZON.
ARE PEOPLE STILL GOING TO SHELL
OUT THE DOLLARS.
AGAIN, THIS IS ANOTHER, THIS IS
KIND OF WAY BELOW ITS ALL TIME,
NOT WAY BELOW, BUT BELOW ITS
ALL-TIME HIGHS.
ALL-TIME HIGHS. THIS IS ANOTHER STOCK YOU HAVE
TO JUST BUY AND HOLD.
MELISSA: CONNELL?
MELISSA: CONNELL? CONNELL: I’M LISTENING TO YOU
GUYS TALK.
GUYS TALK. I THINK A "FOX BUSINESS ALERT"
ON CONSUMER SPENDING.
IF GARY B. SMITH FEELS GOOD
ENOUGH ABOUT THE WORLD TO GO
FROM iPHONE 7 TO AN 11, THEN
EVERYTHING IS GOING TO BE OKAY.
>> I’M AN INDICATOR.
CONNELL: WE’RE GOING TO BE OKAY.
SO APPLE DID, GARY, BOOST ITS
DIVIDEND, RAISED IT TO 82 CENTS.
OKAY’D A BUY BACK PROGRAM A
50 BILLION-DOLLAR BOOST IN THE
BUYBACK PROGRAM.
BUYBACK PROGRAM. YOU MENTIONED BUY THE STOCK,
RIGHT NOW AT THESE LEVELS, YOU
WOULD BUY MORE APPLE?
>> YEAH, ABSOLUTELY.
THE OTHER POINT, YOU TALK ABOUT
THE BUYBACK THIS, IS VERY
SIMILAR TO AMAZON.
THEY ALSO HAVE SO MUCH CASH ON
HAND, IT IS LIKE THEY CAN
WEATHER ANY STORM.
IT IS REALLY, THEY’RE TWO REALLY
INCREDIBLE COMPANIES.
INCREDIBLE COMPANIES. CONNELL: LANCE, FINISH US OFF
HERE ON THE FUTURE BECAUSE
APPLE, YOU KNOW, AS MELISSA
SAID, HE IS UP FRONT ABOUT IT,
THIS IS WHAT WE’RE DOING NOW,
NOT REALLY SURE WHAT THE NEXT
QUARTER WILL LOOK LIKE.
LONGER TERM PRETTY OPTIMISTIC
AMERICAN ECONOMY BOUNCES BACK.
HE DIDN’T GIVE US AN OUTLOOK.
MAYBE THE STOCK IS NOT OFF TO
THE RACES.
THE RACES. WHAT IS IT REASONABLE TO EXPECT
PRODUCTWISE FOR THE REST OF THIS
YEAR FROM APPLE?
5G, WHAT IS REASONABLE TO
EXPECT?
EXPECT? >> SO I FEEL LIKE WE’RE A LITTLE
BIT IN UNCHARTED TERRITORY
OBVIOUSLY.
OBVIOUSLY. WE’LL NOT HAVE APPLE’S WORLDWIDE
DEVELOPER CONFERENCE WHICH KIND
OF IS SORT OF A TABLE SETTING
FOR HOW THE YEAR IS GOING TO GO
BECAUSE IT LETS US KNOW ABOUT
THE BIG CHANGES WE’RE MAKING.
OPERATING SYSTEM, LEADS TO
CHANGES THEY MAKE IN HARDWARE.
WE’RE NOT HAVING THAT.
DIGITAL VERSION OF SOMETHING
LIKE THAT.
LIKE THAT. EVERYTHING IS A LITTLE BIT OUT
OF SYNC.
OF SYNC. I HEARD SOME RUMORS WHETHER OR
NOT THE iPHONE 12 WILL SHIP ON
TIME.
TIME. MOST RECENT ONE, MAYBE IT IS A
MONTH LATE.
MONTH LATE. I DON’T THINK IT REALLY MATTER,
BECAUSE THEY WILL STILL BE ABLE
TO BY THE FALL INTRODUCE THAT.
THEY WILL HAVE PROBABLY AN
UPDATE TO THE AIRPODS, WHICH ARE
SUPER, THAT IS WASHABLE, SUPER,
SUPER POPULAR.
SUPER POPULAR. PROBABLY AN UPDATE TO THE APPLE
WATCH.
WATCH. ALL THESE THINGS ARE ON THE
DRAWING BOARD NOW AND PROBABLY
SOME OF THOSE THINGS ARE IN
PRODUCTION.
PRODUCTION. THOSE WILL HAPPEN.
THE BIG QUESTION IS TIMING AND
CONSUMER INTEREST.
CONSUMER INTEREST. LIKE I SAID APPLE IS RELEASING
SOME PRODUCTS.
SOME PRODUCTS. WE HAVE A NEW iPAD.
WE HAVE THE iPHONE SE AS I
MENTIONED TO KEEP PEOPLE IN THE
APPLE LOOP.
APPLE LOOP. WHAT ARE PEOPLE BUYING A LOT OF?
APPLE MUSIC AND iCLOUD
STORAGE.
STORAGE. THEY HAVE A BUNCH OF PRODUCTS
THAT FILL THE GAP.
THE BIG QUESTION WHAT WE SEE
BRAND NEW IN THE FALL?
I THINK THERE IS A LITTLE BIT OF
UNCERTAINTY THERE.
UNCERTAINTY THERE. CONNELL: SPEAKING OF
UNCERTAINTY, AFTER INITIALLY
GAINING GROUND STOCK AFTER-HOURS
FLUCTUATING NOW BETWEEN GAINS