Get the latest tech news How to check Is Temu legit? How to delete trackers
NEWS
Tim Cook

Tim Cook on China: 'I could not be more optimistic'

Jon Swartz
USA TODAY
Apple CEO Tim Cook

SAN FRANCISCO — Apple is doing just fine.

In his first public appearance since Apple announced its first quarterly sales drop in 13 years, company CEO Tim Cook on Monday said reports and speculation of its slow fade are a "huge overreaction."

"We had an incredible quarter by absolute standards," Cook told CNBC's Jim Cramer on the Mad Money program. Apple reported a 13% decline in sales to $50.6 billion, and a 22% drop in profits to $10.5 billion, for its fiscal first quarter last week.

Cook appeared on the show after Apple shares (AAPL) recorded its eighth straight losing day on the market, its longest skid since July 1998, according to Bespoke Investment Group. Shares have fallen 10% in the past week.

His guest shot seemed to have stopped the streak. Apple shares edged up nearly 2% Tuesday, to $95.19.

Apple shares plunge 7% on first drop in iPhone sales ever

He touched on several topics that have Apple investors nervous about its immediate future: declining iPhone sales, a decline in its business in China and innovation. The disappointing quarter and sub par guidance had some Wall Street analysts speculating on whether Apple's best days are behind it.

For the first time in the device's 10-year history, iPhone sales dropped, year over year. Apple sold 51.2 million in the recently completed quarter, down 16% from a year ago.

Cook said that should change with new iPhone models, greater penetration of smartphones worldwide — it's at 40%, he said — and growth in the emerging India market through shipments of the low-cost iPhone SE.

"We're going to give you things you can't live without," he said of future iPhones. A new version, iPhone 7, is expected in September.

Last week, activist investor Carl Icahn said he sold all of his 45.8 million shares of Apple stock out of concern over its business in China. The company's sales in China were down 11% from the same quarter a year ago.

"I worry a tsunami could hit it," Icahn told CNBC.

For the most part, Cook reiterated talking points he shared with analysts on a conference call after the first-quarter announcement last week. Gartner analyst Brian Blau characterized the Mad Money appearance as a way to reassure investors, employees and Apple customers.

Cook said while upgrade rates in China lagged, the switcher rate — consumers moving from Android models to iPhone — was strong at 40%. His overall concern there is over a "softening" economy and "weakening" currency.

"The middle class (in China) is booming," Cook said. "I could not be more optimistic about its future."

Prospects in India, expected to be the most populous country by 2022, are even brighter as faster wireless networks become more prevalent, said Cook.

As for mergers and acquisitions, Cook said the company could buy innovative services. The company typically purchases a company every three to four weeks, he said.

"We're incredibly excited" about things we're working on, said Cook, who predicted long-term success for Apple Watch. He said its the growth should pick up steam, such as iPod and iPhone before it, and create a new product category.

"We're in great markets" with good technology, Cook said.

Follow USA TODAY San Francisco Bureau Chief @jswartz on Twitter.

Featured Weekly Ad