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This is Tim: Apple's CEO on iPad sales, China, Beats, IBM, and more

Serenity Caldwell | July 24, 2014
Apple CEO Tim Cook discussed the company's Q3 numbers and much, much more in his remarks to analysts Tuesday. Here's what he had to say.

When I look at the top-level numbers, I get really excited when I see that more than 50 percent of the iPads we're selling are going to someone who's a first-time tablet buyer. I get excited when I see that the retail share according to NPD for the month of June was 59 percent in units, and over 70 percent in terms of dollars.

And of course, [CFO] Luca [Maestri] had mentioned in his preamble that our education share is 85 percent. We also are in virtually all Fortune 500 companies--99 percent of them to be exact--and 93 percent of the Global 500. However, when we dig into the business market deeper, though our market share in the U.S. in the commercial sector is good--it's 76 percent, according to IDC--the penetration in business is low, it's only 20. And to put that in some kind of context, if you looked at penetration of notebooks in business, it would be over 60.

apple q3 2014 ipad unit sales

So we think that there's a substantial upside in business, and this was one of the things behind the partnership with IBM that we announced last week. We think that the core thing that unleashes this is a better go-to-market, which IBM clearly brings to the table, but even more importantly, apps that are written with mobile-first in mind. Many of the--not all, but many of the Enterprise apps that have been written for iPad have been essentially ports from a desktop arrangement and haven't taken full advantage of mobile. And so we're excited about bringing that to business along with partnering with IBM which we think is a first-class company, and seeing what that can do to sales of business, which I honestly believe the opportunity is here.

The market is still predicted in 2018--I think these are Gartner numbers--to be about 350 million in size, and to put that in some context, I think the PC market right now is about 315. And so I think our theory that has been there, honestly, since the first time we shipped iPad--that the tablet market would eventually surpass the PC market--that theory is still intact. I just think we have to do some more things to get the business side of it moving in a faster trajectory, and I think we're now on to something that can really do that.

So as I look at it, and back up from the 90-day clock kind of thing, I'm incredibly excited, excited about the plans we have on the product side, and also on the go-to-market side, in particular the IBM announcement.


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