Apple CEO Tim Cook says reaction to Q2 earnings a huge overreaction

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Apple CEO Tim Cook appeared on CNBC’s Mad Money yesterday and talked with host Jim Cramer at-length about a variety of topics ranging from China, India, the company’s Q2 earnings and more.

Cook offered little in the way of new information, instead reiterating international growth opportunities and an “exciting” upcoming product pipeline. A majority of the show focused on iPhone, Apple’s bread-and-butter segment that last quarter saw its first ever year-on-year sales slowdown. For the second quarter of 2016, iPhone sales dipped to 51.2 million devices, pulling revenue down to $50.6 billion.

Cook said the contraction was in large part due to comparatively slow upgrade rates, tough compares and macroeconomic headwinds, the latter of which impacted growth markets like China. Despite the decline, iPhone is performing well with switchers, or users who moved to Apple’s ecosystem from platforms like Android. In China, for example, switch rates were up 40 percent for the first half of 2016.

Cook more than once brought up Apple’s prospects in India, saying this year’s regional LTE rollout could play big for iPhone. Traditionally, Indian consumers shy away from premium smartphones, opting instead for budget devices running Android but Cook believes change is in the wind. About half of India’s population is 25 years old or younger, a demographic Cook said is keen on buying “the best” products available. With LTE penetration at near zero, wireless customers didn’t have a compelling reason to buy iPhone, but that too will change.

Looking at mature markets like the U.S. and Europe, the Apple chief expressed confidence in future upgrade cycles without revealing any juicy details. Cramer asked what Apple would include in a new iPhone that would make him need, not simply want, a new one, alluding to concerns that the company can no longer innovate.

“We’re going to give you things you can’t live without that you don’t know you need today,” Cook said.

On services, Cook commented on platform stickiness, saying ecosystem buy-in doesn’t stop with hardware. Devices like iPhone and iPad are gateways to services purchases, from iCloud storage to apps, movies and music.

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