During the earnings call to announce Apple’s Q2 2014 results, CEO Tim Cook revealed that Apple acquired as many as 24 companies in the last 18 months. Allaying investor fears whether Apple can still innovate, Cook said that Apple keeps on looking for opportunities but doesn’t publicly announce these acquisitions. He stressed on Apple’s plans to launch new product categories multiple times during the call.
Key takeaways from Apple’s Q2 2014 earnings call:
On iTunes: Apple has over 800 million iTunes accounts, most with credit card details. This is a staggering number and perhaps makes Apple one of the biggest online wallet. Cook’s mention of this number could hint at Apple’s plans to get into the mobile payment space.
On iPad: Cook also cited the decline in iPad sales numbers year-on-year on the way Apple handled iPad inventory during the two quarters. He mentioned Apple had increased iPad inventory in the March quarter last year and had a backlog of iPad mini units that were shipped during the quarter, none of which happened this time. “We continue to believe that the tablet market will surpass the PC market in size within the next few years and we believe that Apple will be a major beneficiary of this trend,” Cook said.
He also mentioned that the iPad has been one of the fastest selling products for Apple. The company has sold more than 210 million units of the iPad, which is almost twice the number of iPhones it sold during the same period.
On new users: Apple added 60 million new users, who did not have an Apple ID before, in the last six months. Two-thirds of iPad buyers were first-time iPad users, while half of iPhone users were first-time iPhone users. This is an important metric as Apple claims its products have the “halo effect” – users who buy an Apple product for the first time are more likely to buy other Apple products over a period of time.
On new product categories: Cook has been saying that Apple would enter into new product categories for the past few quarters now, but we are yet to see any new product coming out of Cupertino. He reiterated Apple’s plans during this earnings call as well. “We are expanding Apple’s products and services into new categories and we are not going to under invest in this business,” he said.
On Apple TV: Apple has sold 20 million units of the Apple TV. Cook is no longer calling it a hobby and mentioned that $1 billion worth of content was bought by Apple TV users in 2013.