Apple CEO Tim Cook believes the negative sentiment around his company lately is overblown.
Speaking with CNBC’s Jim Cramer, Cook defended Apple’s performance after billionaire investor Carl Icahn sold his position in the company. “I think that’s a huge overreaction,” Cook said. “We just had an incredible quarter by absolute standards.”
Icahn’s move was largely due to Apple’s lagging performance in China, the investor told CNBC. The Cupertino, Calif. company revealed in its most recent earnings report that its revenue there, its second-biggest market, fell by 26%. Still, Cook told Cramer that he “could not be more optimistic about China.”
Apple’s iPhone sales, down 16%, also disappointed Wall Street analysts in the most recent quarter. Additionally, the firm offered a less rosy view of its future than analysts expected. “It was a pretty good quarter,” said Cook. “But not up to the street’s expectations clearly.”
Cook defended the lower iPhone sales by arguing that customers are upgrading their devices at a slower rate than last year, but at a faster rate than the year before. “And so we had this abnormally high upgrade rate last year as people bought into the iPhone 6, and now we’re comparing to that,” Cook said.
Over the past year, experts and critics have questioned whether Apple has become too reliant on iPhone sales. The iPhone is responsible for 65% of the company’s revenue, prompting some to question whether there’s room for growth. Cook argued that there is.
“We’ve got great innovation in the pipeline from new iPhones that will incent you and other people that have iPhones today to upgrade to new iPhones,” said Cook. “We’re going to give you things that you can’t live without that you just don’t know that you need today.