Apple CEO Tim Cook had a few interesting things to say as part of the company’s 2015 Q2 earnings calls, including his view on the Apple Watch launch and why it’s making less money than most people think.
Watch launch going well
Cook is generally pleased with the launch of the Apple Watch so far. It’s been well-reviewed, sold incredibly fast and even impressed internally when torn apart.
He also pointed out that the number of apps available at launch are “far ahead” of expectations. Apple was hoping to match the 1,000 launch apps the iPad shipped with, but there are approximately 3,500 Watch apps available already.
Apple improving supply
The Apple Watch has clearly proved more popular than Apple anticipated, with demand far outstripping supply so far. While this is good for sales, Cook acknowledged that Apple needs to up its game in terms of supply and is “working hard to remedy that”.
He adds that the company is “learning quickly about customer preferences”, which should enable it to prioritize manufacture of the most popular models to match the demand quicker. Still, it’s unlikely the second wave of launch countries will be stocked until at least June.
Don’t believe cost breakdowns
Cook was dismissive of online cost breakdowns and estimated ‘bill of materials’ analyses. He says the reality is far different and he’s “never seen one that is anywhere close to being accurate”.
Apple Watch profit margins are in fact much lower than other Apple devices, he says – for the moment at least, while the product goes through “a learning period”. We can only assume he’s not talking about the $17,000 model here.
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