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Apple worries 'an overreaction' - Cook

Do Not UseDo Not Use 3/05/2016 By Dave Lee
Tim Cook © Getty Images Tim Cook

Apple doesn't do media interviews unless it really has to.

The last time Tim Cook took to screens in the US, it was because of a looming crisis with the government over encryption.

On Monday, it was because of a looming crisis on Wall Street.

Last week, I reported on how Apple had suffered its first quarter of negative growth for 13 years.

Since that news came out, Apple's stock price has been dropping, for eight consecutive days, the first time that's happened to the company since 1998.

So naturally, Apple is trying to stem the flow. Mr Cook appeared on Mad Money, a CNBC show presented by the charismatic Jim Cramer.

'Incredible quarter'

Mr Cramer presents his show like a sports broadcaster might, with sleeves rolled up and a shout-shout-shout interview style that is a rite of passage for America's top CEOs.

It's arguably the toughest interview Mr Cook has ever subjected himself to - although that's not exactly saying much.

Still, Mr Cramer was blunt: After a bad quarter, and warnings of another one on the way, is Apple on the way out?

"I think that's a huge overreaction," Mr Cook replied.

"We just had an incredible quarter by absolute standards, but not up to the Street's expectations, clearly."

Concerns about the iPhone being "dead" are unfair, Mr Cook argued, as the mediocre (by Apple's standards) sales of the iPhone 6S range are only poor when put into the context of incredibly good iPhone 6 sales the year before.

'Can't live without'

Mr Cook insisted that Apple wasn't losing its popularity with consumers. He made reference to Apple's impressive customer retention rates - if you're an iPhone user you are far more likely to get another iPhone than head to another device from Samsung or similar.

Which is true, but it's in hardware sales where Apple makes its serious money. So, if the iPhone is slowing, it needs another hit.

"We're going to give you things that you can't live without that you just don't know about today," Mr Cook said.

"That has always been the objective of Apple."

He went on to suggest the company's newest line, the Apple Watch, was that hit.

"I think in a few years we will look back, and people will think, 'How could I have ever thought about not wearing this watch?'" he said, adding that the Watch is only on sale in 14,000 stores worldwide, leaving plenty of room for growth.

"We're still in learning mode," he added. "We're learning quickly. You'll see the Apple Watch get better and better."

Watch out

The question is whether Mr Cook's confidence was true faith in the product, or a brave face.

The company still hasn't told us how the Watch is performing, but analysts suggest about four million smartwatches were sold in the first three months of 2016, up three million on this time last year. The Apple Watch accounted for just over two million of them.

Pretty incredible by any other company's standards (Samsung has around 14% of the smartwatch market, for example) but minuscule compared with the 70 million iPhones shipped in the same period.

So, if it's not the Watch, then what's next?

"We don't talk about futures as a company," Mr Cook told CNBC.

"We don't talk about products on the roadmap. I'm incredibly excited about things we're working on. I don't want to be more specific than that."

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