Apple CEO Tim Cook thinks Wall Street has it wrong: his company had "an incredible quarter" despite the fact that it experienced its first revenue decline in 13 years.
That's not all. He dropped important hints about the iPhone 7, Apple Watch 2 and expansion of key services while talking to CNBC "Mad Money" host Jim Cramer.
There's a lot to take in from the Cook interview, and he's extremely vague about everything except for the fact that Apple is "fairly secretive" company when it comes new products.
That's why we parsed through the entire program in order to understand everything being said. Here are the seven big takeaways from this Apple interview.
1. Unfiltered iPhone 7 hype
There has been ample talk suggesting that the iPhone 7 will be a boring, iterative update, even though this year's phone is due to be a major refresh that happens every two years. Not so fast.
"We're incredibly excited about things we're working on. Incredibly excited," said Cook after Cramer asked about the iPhone 7 directly.
"We've got great innovation in the pipeline, new iPhones that will incent you and other people that have iPhones today to upgrade to new iPhones."
'We're going to give you things that you can't live without that you just don't know you need today'
Cook didn't go into detail on the new iPhones (shocker), but we've been hearing plenty of rumors about a dual-lens camera for the iPhone 7 Plus, reworked antenna bands and no headphone jack. Of course, there's hope among Apple faithful that's there's more to it than that.
"We're going to give you things that you can't live without that you just don't know you need today," Cook boasted when talking about future iPhones.
"That has always been the objective of Apple. To do things that really enrich people's lives. That you look back on and you wonder 'how did I live without this?'"
In other words, Cook promised that the next iPhone won't be boring, contrary to the ho-hum predictions of newsmaking analysts. At the end of the day it's his job to keep the hype train rolling, and we'll likely have to wait until September to know who's right.
2. Apple Watch 2 hints
Cook hasn't directly acknowledged that the Cupertino company is working on an Apple Watch 2, but everything he said indicates that a second generation smartwatch is inevitable.
"You'll see the Apple Watch getting better and better," he promised. This statement could relate to a new Apple Watch for 2016, or possibly just watchOS 3 software. My bet is both.
'People will say, How could I have ever thought about not wearing this watch?'
Why? Because, right now, the Apple Watch is something we *can* live without, and no mere software update is going to dramatically change that. Yet Cook continues with promises that the Watch will be a must-have down the line.
"I think that in a few years we will look back and people will say, 'How could I have ever thought about not wearing this watch?,'" he said to Cramer. Clearly, an Apple Watch 2 is the only way for this to happen.
With the current Apple Watch, Cook admitted: "We're still in learning mode. We're learning fairly quickly, though. We know a lot more than we did a year ago."
Time to expand that "new category," Tim, and make it something even more worthwhile.
3. Emphasis on services (which includes Android)
Apple is moving beyond phones and hardware with an intense focus on services, and it's paying off in a big way.
"Services now is the second largest revenue segment at Apple," said Cook. "Last quarter we were at 6 billion, up 20%. It is fast growing."
This includes App Store purchases, Apple Music subscriptions, Apple Pay transaction fees (off of credit card companies, not you), and digital content, from movies to songs to e-books.
Apple can instantly double down on its services revenue by opening to Android. Sound crazy? It already did it for Apple Music on Android.
"This is huge," Cook exclaimed, reminding everyone that there are over a billion active Apple devices with such capabilities out there.
What's interesting here is that Apple can instantly double down on its revenue by opening some its services up to Android. It's already done that with Apple Music on Android.
Many see this as a test case for more Android app integration. If services are as important as Cook claims, it's almost a no-brainer to further expand to the biggest mobile OS, too.
4. Thinks Apple is doing just fine, thanks
Cook gave us every reason why Apple isn't in trouble, despite the fact that Wall Street analysts have basically been writing the company's obituary for the last seven days.
"We just had actually an incredible quarter by absolute standards, 50 billion plus in revenues and 10 billion in profits," Cook pointed out.
"To put that in perspective the 10 billion is more than any other company makes so it was a pretty good quarter but not up to the Street's expectations clearly."
'We just had actually an incredible quarter by absolute standards...but not up to the Street's expectations clearly.'
There are a few problems, according to Cook: People are upgrading at a lower rate than a year ago because last year's rate was "abnormally high" for iPhone 6 and iPhone 6 Plus.
He went on to twice mention that customers love Apple products, noting that satisfaction and loyalty rates are at an all-time high. That's the most important thing long term for the company, said Cook.
