Apple CFO Expects Sales Growth to Return

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Bloomberg May 2 21:33 · 12.8k Views

Apple Inc. sales declined less sharply than feared last quarter, helped by stronger-than-expected demand in China, sparking optimism that the company’s slowdown is easing. Chief Financial Officer Luca Maestri says the company will return to sales growth in the current period. Bloomberg's Emily Chang spoke to him by phone and reports on "Bloomberg Markets: The Close."

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Transcript

  • 00:00 Just off the phone, I'm told with the CFO of the company of what did he have to tell you?
  • 00:04 Emily,
  • 00:05 Hey there Roman Main, thanks.
  • 00:07 Obviously very good point that a lot of the bad news was already priced in.
  • 00:10 Therefore you're seeing that reaction in in the stock and and you know revenue beat, iPhone beat, but you are seeing some still significant declines across product categories with the iPhone in particular.
  • 00:21 Luca Maestri told me one of the the big difficulties here is a difficult comp of $5 billion
  • 00:28 disruption that was due to some supply chain issues that led to some delayed sales, which means again the comparisons are a little more difficult.
  • 00:35 But the headline from our call really was that he said
  • 00:38 we expect to grow low single digits in the June quarter and they're going to be talking about that
  • 00:44 a little bit more on the call.
  • 00:45 So all the folks out there wondering is Apple still a growth company at least for the June quarter?
  • 00:50 Apple is predicting they will be.
  • 00:53 Let's talk about China.
  • 00:55 Romain was mentioning earlier, Greater China revenue in the second quarter
  • 00:58 $16.37 billion, down about 8% from a year ago when analysts were looking for 15.87 billion.
  • 01:04 So that is a better than expected print for Greater China.
  • 01:07 But
  • 01:08 that region, that market for Apple has been a source of a lot of concern for investors.
  • 01:13 Did he give any color on what their prospects are in China?
  • 01:17 Absolutely.
  • 01:17 Scarlett, you're looking at a 1 1/2 billion dollar decline in China and
  • 01:21 APAC
  • 01:22 separately in China specifically.
  • 01:24 He talked about that disruption.
  • 01:25 You're seeing some impacts there.
  • 01:27 But he said we're actually happy with our results in China, specifically said this is the most competitive smartphone market in the world without a doubt, but we feel good about the results.
  • 01:36 He talked about Tim,
  • 01:37 Tim Cook being in China recently, the new store they opened in Shanghai, the level enthusiasm for the brand being very strong,
  • 01:44 the fact that they had the top two
  • 01:46 top selling smartphones
  • 01:48 in the quarter, they set a record for upgraders.
  • 01:51 So he said the reality is very different from what you read at times.
  • 01:55 So Emily, I'm scouring right now through these press release and presentations to get all those fat numbers that we're supposed to see off that vision.
  • 02:03 Pro heads, I don't know if you have one of these things here, but
  • 02:06 talk to me a little bit about the wearable strategy.
  • 02:08 I mean, I'm kind of being facetious.
  • 02:10 We know
  • 02:10 it did not quite take off as quickly as maybe they expected here,
  • 02:14 but are they standing by that strategy?
  • 02:16 What did Luca tell you?
  • 02:17 I've tried the Vision Pro and I thought it was awesome, but I didn't buy one myself, so maybe that tells you something.
  • 02:24 You know, the wearables category was weaker despite the launch of the Vision Pro and some of the mixed reports about the Vision Pro.
  • 02:32 We talked about that and again he said it's a tough
  • 02:35 comp.
  • 02:35 He said that last year they released some new Airpods, some new watches.
  • 02:39 Those were very popular, but overall that they're still very excited about the category.
  • 02:43 It's grown a lot over the years.
  • 02:44 In fact, it's doubled in revenue
  • 02:46 over the last five years.
  • 02:47 So
  • 02:48 that launch compare was tough.
  • 02:50 And we also talked a little about a bit about AI.
  • 02:53 Obviously WWDC, their big developers conferences coming up, they're going to be talking a lot about
  • 02:59 AI there.
  • 02:59 He he he said they think it's a great opportunity, it has a lot of potential.
  • 03:03 It's where they're making significant invest.
  • 03:05 This is going to be really important for Apple.
  • 03:07 Can they build in new features?
  • 03:09 You know, better software that gets people really excited about
  • 03:13 upgrading, replacing, or even, you know, coming over
  • 03:17 to iOS as a platform.