During the quarterly earnings call, Apple CEO Tim Cook was asked a broad question on how Apple evaluates products and opportunities before entering the new markets.
Apple posted a strong quarterly result this morning. The company hit $111.4 billion in quarterly revenue, with a profit of $28 billion. Sales of iPhones, iPads, Macs, and even the home products increased significantly this year. Tim Cook was extremely happy with the results Apple achieved, but said that the company could’ve done better if the pandemic wasn’t there.
During the earnings call keynote, Morgan Stanley’s Katy Huberty asked Tim a question on how the company evaluates the new opportunities and when a new market might be attractive. Here’s what Tim said:
“The framework that we use is we ask ourselves if this is a product or service we’d want to use. That’s a pretty high bar. Is it a big enough market to be in? Unless it’s an advanced product, it’s about customer experience. There’s no set way that we’re looking at it, no formula kind of thing. We’re taking into account all of those things.”
Tim said that Apple loves to work on products where hardware, software, and services intersect.
“The kinds of things we love to work on are those where there’s a requirement for hardware, software, and services to come together. Magic occurs at that intersection.”
Apple CEO said that there are ‘some good opportunities’ for Apple to explore and that Apple needs to work in the big markets where the company’s market share is low (like India). He also said that the company is ‘feeling good’ about the services area, which Apple has been working on for quite some time. Apple’s services sector revenue increased a whopping 41% this year, with the revenue increasing from ~$12 billion to ~$16 billion this year.
Apple is reportedly working on a number of products. The company is said to be working on Apple Glass, a product that could offer various AR and VR features. The company is also expected to announce Apple AirTags, an object tracking product that is a new accessory category for Apple. The company is also expected to be working on the Apple Car project. Many leaks over the past couple of weeks have hinted that Apple is in finalizing stages of the project.
Our Take
This has been Apple’s ‘mantra’ so far. The company has far beaten all the companies in optimizing its products. The kind of approach Apple takes to develop its products is unique, and the products say it all.
What are your thoughts on Tim’s statements? Which category do you think Apple is working on? What are your thoughts on Apple’s Q1 2021 results? Do let us know in the comment section below!
