- REUTERS/Toru Hanai
Apple may have hit its targets in its fiscal fourth quarter, but investors are clearly not dazzled by the shrinking shipments across all of the company’s key product lines.
Shares of Apple fell by about 3% in after-hours trading on Tuesday. And CEO Tim Cook struggled to convince Wall Street that the company was poised for a new growth spurt.
But the moment that best defined the company’s predicament came during the conference call on Tuesday, when Cook fielded a remarkable question from an analyst and reacted in what can best be described as a defensive manner.
Steven Milunovich of UBS Securities started by pointing out that Apple hadn’t released a major new product in a while, then asking: “The question is, A, does Apple today have a grand strategy for what you want to do? I know you won’t tell us what it us, but do you know what you want to do over the next three to maybe five years?”
Cook responded by saying, “We have the strongest pipeline that we’ve ever had and we’re really confident about the things in it, but as usual we’re not going to talk about what’s in it.”
The “strongest pipeline” phrase was standard Apple boilerplate language for these kinds of questions. But it was hard to miss a sense of annoyance in Cook’s voice, especially when he didn’t follow with any other comments, if even just some more platitudes about Apple’s focus on innovation.
Then something really interesting happened.
The unthinkable question
Milunovich followed up by pressing on whether Apple had a “stong sense of where technology is going” or simply reacted to changes to the market.
“We have a strong sense of where things go and we’re very agile to shift as we need to,” Cook said tersely.
It was a striking sign of how much Apple’s reputation has changed from even just a few years ago, as the company has experienced three quarters of declining revenue and struggled to unveil a new, game-changing gadget.
Apple was the undisputed leader of the tech industry during the Steve Jobs era. It would have been unthinkable for a Wall Street analyst to have the temerity to ask whether the company had a grand strategy.
Apple is the maker of the iPhone. The company does not react to others; it sets the agenda.
But these days the Wall Street analysts like those who asked questions on Apple’s call on Tuesday aren’t taking anything for granted. As a group, they pressed the company’s leadership for more information on the direction of the company – like the long-rumored Apple Car – or details about its financial operations.
The clearest takeaway from Apple earnings call: No one takes Apple’s word for anything anymore. On India potential, next growth drivers etc
— Shira Ovide (@ShiraOvide) October 25, 2016