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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.

One other point I might add on this, because I think this is interesting and I don't think it came out in our commentary so far is the market's very bifurcated on iPad. In the BRIC countries, iPad did extremely well. The growth was very high. Like in China, it was in the 50s, the Middle East it was in the 60s; in the developed countries, like the U.S., the market is clearly weaker there. It's interesting to note, however, that those--the U.S. as an example--we had a very, very strong Macintosh market in the U.S.

And so there's probably a bit of higher-ed kind of stuff beginning to play out too, where higher-ed is clearly still very much notebook-oriented; K-12, on the other hand, we sell 2.5 iPads for every Mac into K-12. And so we're headed, we're clearly headed into that season now, and it typically starts in graduation time-frame in fiscal Q3 for us, and that's probably another thing that we're seeing.

On China

China, honestly, was surprising to us. We thought it would be strong, but it well went past what we thought. We came in at 26 percent revenue growth, including at retail. And if you look at the units, the unit growth was really off the charts across the board. iPhone 48 percent off; that compares to a market estimate of 24, so growing at 2x the market. iPad was up as well, as I've mentioned before. The Mac was up 39 percent, and that's versus a market in China that's also contracting along with markets in those parts of the world; in China it was projected to contract by five percent.

And so we're seeing some substantial strength there, and the thing that's actually growing the most is the iTunes software and services category, which has the App Store in it, and that area is almost doubling year over year. And so it's very very exciting what we're seeing there.

We are still in the process of rolling out, along with our partner China Mobile, the TD-LTE, into more cities, and so we're still in the early going on that, that just started in January, as you know. And my understanding is that later this year, there will be a license for the other operators to begin shipping FTD-LTE, which I think is another big opportunity in China.

On trade-in programs for the iPhone

What I think is happening in the aggregate as you look across the world is that trade-ins are actually hugely beneficial for our ecosystem because people wind up...we have more people that are able to join the party when we have a trade-in, because in essence it winds up being used by...the prime example is someone else within the family, or in the example that has become more common in the last year, someone trades it in, and that goes to either somebody else in that country that is very price-sensitive, or somebody in a different country.


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