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View All. But okay, so let's unpack that. My daughter has the 5.


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She said, "Listen, Dad. If you put it in the washing machine, like your wife did, I'll get a new one. What do we do about that? What do you do? Well, the most important thing, for me, is that she's happy. That is the most important thing. Now, if she's not upgrading for another reason, maybe it's too much of a hassle for her to upgrade.

Maybe she's worried about the transfer of data. All of this stuff, we wanna help on. And do you know, we've got the store that you're in that's very focused on having the best customer experience there, helping people set up their new phone, making sure all their data's transferred, and also-- allowing them to trade in their current phone, which begins to look like a subsidy that the carrier may have previously provided. And it offsets some of the cost of the new phone. Okay, so these issues are all occurring at the same time that we do have China.

You were very abject about China and the percent of the upside that went away. There are issues involving perhaps, not boycotts, we know that's off the table, but patriotism, in a strange way, meaning that, you know what? How long can that last? Well, I think here's what we saw in China in specifically. The Chinese economy, it seemed to us, began to slow, maybe, in the second half of the year. And it was on some sort of rational trajectory. We believe, based on what we saw and the timing of it, that the tension, the trade-war tension with the U.

I believe that's temporary. Because I think that, when you really look at it, it's in both countries' best interests to come to an agreement. It is a complex, very complex trade agreement.


And it needs to be updated. But as I've said before, I'm very optimistic that this will happen.

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And so that clearly will be good, not only for us, frankly, but I think more about the world in general. The world needs a strong U. My understanding is even the hardliners in the White House have moved on this issue. Now I know that President [Donald] Trump calls you a friend, I know that you go back and forth because you're represent the greatest that we have in America. And my understanding is that there are people who feel exactly like you, which means a deal's possible.

I think a deal is very possible.

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And I've heard some very encouraging words. Yes, yes, very recently. And I don't speak for them, obviously. I do talk with them. And I give them my ideas and thoughts. Okay, now, we gotta talk about some of these people who, the naysayers. And we've dealt with them before, when the stock was substantially lower. A Wedbush analyst said Apple's clearly the darkest days, representing a challenge in growth. Journal, It's too soon to call the XR a flop, only after a few months. But early indications are, of course, it's a flop.

What do you say to people who say XR flopped?

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What do you say to, say, darkest days? I say bologna. I call bologna on that.

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Let me tell you how I view this. Here's the truth, what the facts are. Since we began shipping the iPhone XR, it has been the most popular iPhone every day, every single day, from when we started shipping, until now. I mean, do I want to sell more? Of course I do. Of course I'd like to sell more. And we're working on that. But in terms of the product itself, it's an incredibly innovative product.

It has a bunch of advanced technologies in it from the chip with the neural engine to security embedded to an edge-to-edge liquid retina display, the first in the industry, longest battery life ever in an iPhone. I mean, it is unbelievable. And the photos that you can take of your life and of your loved ones, I mean, it beats many, many of the standalone cameras that you could buy now that nobody uses anymore.

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  • And so these things give a lot of value to the customer. So that's that. In terms of the naysayer, I've heard this over and over again, Jim. I've heard it in I've heard it in and '07 and '08 and '10 and '12 and ' You can probably find the same quotes from the same people over and over again. And I'm not defensive on it. This is America. And you can say what you want. But I'm giving you 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.

    Well, then you were surprised with the market reaction to both when you decided to not reveal units and when you revealed the shortfall. I'm never surprised by the market, to be honest with you. Because I think the market is quite emotional in the short term. And we sorta look through all of that. We think about the long term. And so when I look at the long-term health of the company, it has never been better.

    The product pipeline has never been better. The ecosystem has never been stronger. The services are on a tear. If you look at, let's just take wearables as an example, right? Wearables, it's mainly the Apple Watch and AirPods. If you look at this, and on a trailing basis. I'm not projecting. On a trailing basis, they've we've already exceeded the revenue for wearables is already more than 50 percent more than iPod was at its peak. Now, this is a product that I think everybody would say it was an incredibly important product for Apple, full of innovation, and probably, the trigger for the company getting on a very different trajectory and into other markets.

    And so already, exceeded it by 50 percent at its peak. At its peak. Also, if you take AirPods and the Watch separately, and you sort of back these up and align it to the launch date of iPod, as well, and, you know, where all of them have a comparable amount of time, you would find that each one, independently, is, like, four to six times ahead of where iPod was at a comparable period of time.

    And so AirPods are becoming ubiquitous out there. People love them. I get notes every day. They're chock full of tech. But they just work. It's the elegance of them, but with significant technology and built right in and an unbelievable user interface. I've been following stocks for 40 years, Tim. And you guys are a fountain of innovation. My wife said, "Tell him, what do they want?

    Time travel? The reason I mention it is because there are companies that sell at 22 to 23 times earnings, they are the consumer packaged goods companies. There are companies that tend to go from 1 to 4 percent. And yet, the analysts who follow your company continue to look for units of phones, they're not thinking about the revenue.

    Are you followed by the wrong people? I think that our story isn't well understood. I think Apple is not well understood in some of Wall Street. For example, I think there are several people that believe the most important metric is how many iPhones are sold in a given day period or what the revenues is.

    This is far, far, far down my list. The point is, if somebody decides to buy an iPhone a little later, because of the battery, huge discount that we gave, they decide to hold on a little longer, I'm I'm great with that. I want the customer to be happy. We work for them.

    And so the important thing is that they're happy. Because if they're happy, they will eventually replace that product with another. And the services and the ecosystem around that will thrive. It's the 62 percent. It is overwhelming. And they don't know what to do. And I understand their conundrum, Tim. They don't know what to do. Because the cell phone's such a big part of the pot. And in this last quarter, if you take everything outside of iPhone, it grew at 19 percent.

    Nineteen percent on a huge business. That's — again, it's a consumer packaged goods company but not a tech. Why not accept it and say, "You know what? We're just — we wanna be covered by other people"? Well, I don't know. You're a big company. Maybe you could. Now, I've got some ideas for you, okay? I talked to some people at Walmart yesterday. An arrangement with Walmart, Flipkart to take over India with a budget phone, rather than doing it piecemeal. For us, we're about making the best product that enriches people's lives.

    And so we're not about making the cheapest, right? We want to make a great value. But that's not necessarily the cheapest. And so for us, what we've seen is there's enough people in every country in the world that we play in that we can have a really good business by selling the best phones.

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    So we made the iPhone XR. And we put as many of the advanced technologies as we could in that phone And we priced it right between the 8 and the 8 Plus of the year before. But in India, in general, we are all in. It is a major focus. And so we have more work to do. We'd like to put stores there. We would like some of the duties and so forth that are put on the products to go away. And we're working closely with the team there.

    And I believe that we'll have better results at some point in the future. I'm not in the forecasting mode here today. But it's an important market for us. You have people who are naysayers. One of the naysayers is not an analyst. It's Qualcomm.

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