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Tim Cook on Jim Cramer: complete transcriptlogoSEARCH QUOTES MARKETSBUSINESSINVESTINGTECHPOLITICSCNBC TVJim Cramer interviews Tim Cook: the complete transcriptPUBLISHED WED, MAY 3 2017 7:30 PM EDT UPDATED THU, MAY 4 2017 12:11 PM EDTCNBC.com staff@CNBCSHARE amer-complete-transcript.html

Tim Cook on Jim Cramer: complete transcriptVIDEO 13:02Apple CEO Tim Cook says rumors hurt iPhone sales in China“Mad Money” host Jim Cramer interviewed Apple CEO TimCook on Wednesday about Apple’s recent earnings report,plans to create U.S. manufacturing jobs, and more. This is afull transcript, lightly edited for clarity.Cramer: Tim, last year at this time we sat down, the stockwas at 93, the headlines were all about how thecompany’s best days were behind it. You said that “thecustomers loved the product, as long as they do, then I’mnot gonna worry.” Do you feel vindicated?Tim Cook: “You know, I didn’t really worry about what peoplewere saying then because I care very much about our users,and I strongly believe that if they’re happy over the long term,other things will take care of itself. And so we had a lot ofconfidence and it’s good to be here today. But we don’t reallylook at the stock, you know? Because for us, it’s about the longterm. And so we’re very much focused on long termshareholder value, but not the short term kind of on-jim-cramer-complete-transcript.html

Tim Cook on Jim Cramer: complete transcriptBut there has to be a sense, when you read that thecompany is dead, that it’s a bit unfair.“Well, I just thought it was absurd.”OK.“And people just not understanding the company.”Do people understand the headlines today that it was adisappointing quarter even though every company in theworld would kill for what you just did?“Yeah. I look at that, honestly, and we had a great quarter. Ifyou get into the numbers just a little bit for a few minutes, theMac grew 14 percent. This is huge. Services continued thisreally fast growth. It grew 18 percent year on year and wecontinue to be on target to be a Fortune 100 company this yearwith our services business. The watch almost doubled year onyear. iPhone grew in revenue sense because the iPhone 7Plus was just off the charts. It’s so incredibly popular, so muchmore popular than we planned. We knew we had a killerproduct, but so many people love Portrait mode and the large,beautiful screen and all the other aspects of the phone, and it’sbecome such an integral part of their life that a lot of peopleare loving that 7 Plus. And so we grew strongly in four out offive of the operating segments, of the geographic segments.We didn’t grow in China, but we did remarkably better than wedid over the second half of last year, which is what weexpected, and it’s what we delivered. And we feel that we’ll doeven better this quarter.”Let’s think about that notion of the consumer and whatyou care about. Let’s say a consumer product companyhad 5 percent organic growth, 10 percent earnings pershare, beat by 0.08, and at the same time had im-cramer-complete-transcript.html

Tim Cook on Jim Cramer: complete transcriptincreases when all consumer products companies arestruggling with price decreases. I believe that you wouldsell at 24 times earnings, which coincidentally, is the sameprice-to-earnings multiple of Clorox, which is a bleachcompany. Do you find it somewhat ironic that the mostbasic commodity has a much higher price-to-earningsmultiple than the greatest consumer product of all time?“You know, for us, we look at that and we say, you know, wecan invest in our company and invest in our stock and we dobelieve it’s undervalued. And so we’re buying it back, and sofrom that point of view there’s an opportunity in that as well.But over the long haul, I think it will, I strongly believe that it’llbe at a fair value. And so, you know, that’s how we look at it.”But is it reasonable to think it’s the greatest consumerproduct technology company as opposed to a razor bladethat sells at 23 times earnings?“I think the iPhone is the best consumer product ever. That’swhat I feel about it. And it’s become so integrated and integralto our lives, you wouldn’t think about leaving home without it.It’s- your health data is there, it’s- you’re paying with it from anApple Pay point of view, you’re messaging your friends, thecommunity that you’re a part of. It’s your navigation system. It’syour news. For many people, they’ve moved all of their videoto watching on a mobile product. And, you know, the iPhone isat the center of that.”Plus, clearly, is a cord-cutter.“Absolutely. Absolutely. And so there’s so many of these thingsthat it has, that- it’s so integrated into all aspects of your life,that I think- I don’t know that there is a consumer product that’smade such a profound change in people. And with -cramer-complete-transcript.html

Tim Cook on Jim Cramer: complete transcriptecosystem behind it, the fact that it’s unleashed millions ofdevelopers to develop their passion and provide to customerssomething that they’ve been, maybe it’s been a hobby forthem, but now they’re unleashing it around the world. And it’sunbelievable.”But on the conference call you mentioned two troublingissues. You talked about how we are working on gettingChina better. And then you also talked about the idea thatyes, people are holding back. Some are waiting, perhapsbecause of a new phone. These were things youaddressed. So I’d like to just flesh them out with thepeople who watch who own the phone who are confusedby this.“I think the last one is kind of simple, honestly. It’s that thereare more rumors floating and more press articles and mentionsof new things, and when that happens, a percentage of peopledelay. And so, yeah, we see a piece of that. That probablyaffects us more in China than other places because there’s atendency there to buy the latest thing, although I have to say,the 7 Plus has done extraordinarily well there, and it’s updouble-digit from the previous year, comparing to the previousgeneration product. But we didn’t do as well on some of theprevious generation iPhones there, and we’re looking at whyand trying to address that.”Now, the 7 Plus, had you had enough, the quarterwould’ve been a different-looking quarter.“No, I wouldn’t say that, because I feel that we were in supplydemand balance at the beginning of the quarter. But when Iback up from China, what I see is the Mac business grew 20percent. You know, this is extraordinary. The Watch grewnicely. Services is just on a tear there. Chinese -on-jim-cramer-complete-transcript.html

Tim Cook on Jim Cramer: complete transcripthave really done a great job of delivering apps that peoplereally want there. And so there’s a whole set of things that’sgoing well, and we just have to get them all to head. In thescheme of things, though, you know, if you back up from it,we’re probably, we’re one of the largest foreign companiesthere. And we’re really proud to be there and serve the market,and we’re going to keep working on it.”You’ve mentioned the service revenue stream severaltimes. I think, okay, so you have say 150 million, which isa conservative number, of subscribers who, like me, don’teven look at the price of the bill like we do for Netflix andAmazon. I’m thinking, what else can you put in there? Iknow that you’ve been talking original content. I knowthere’s the possibility of using some of the 256 billionyou have to augment that stream. The stream is one thatwe are very excited about on Wall Street, and theconsumer is excited about. Wouldn’t it be a natural to putmore money on that horse and bet that I could change thecomplexion of the company’s valuation?“First of all, for this year, we think we can become a Fortune100 company without adding something new, so that’s lookingat our existing sort of services. We’ve also said that we’regoing to double the services business. Our objective is todouble by 2020. And, you know, that projection is a sum ofnew services and existing services. On video in particular, wesee that the video world has kind of hit an air pocket. Andwhere cord-cutting has been happening on some kind of basis,we think it’s accelerating massively and that it’s clear what theend story looks like here. The trajectory is a debate. But we’dlike to play in this. Because we do think that the bestexperience for a customer is to view things when they want,the way they want, and have many different -on-jim-cramer-complete-transcript.html

Tim Cook on Jim Cramer: complete transcriptinformation around what they’re watching, you know, not justthe linear TV feed. And so we are working on some originalcontent now. We’re learning, and we’ll see where this takesus.”Now, is there a possibility that someone could say, “Youknow what? These numbers are great. Samsung had thefire phone, and now they’ve got a new edition.” Butmeantime you’ve picked up a lot of your ecosystem.You’ve always talked about people switching to Apple. Areyou concerned about people switching back to Samsung?“No, we don’t see much of that. We don’t want to see any ofthat, and we try really hard to retain people by giving them anexperience that they really love. That’s our objective. Butgenerally speaking we measure that fairly closely, and we don’tsee very much of that. On the switcher side, we were verypleased that we set a record for switchers outside of China forthe first six months of this fiscal year. As you know, we start inOctober and we just finished the first half in March. And we seta record there and we set a record for upgraders across theworld. And so this felt really good.”VIDEO 12:09Exclusive: Apple just promised to give US manufacturing a 1 billion im-cramer-complete-transcript.html

Tim Cook on Jim Cramer: complete transcriptTim, let’s talk about Apple’s role in the world. You’re ahuge company. What are you doing to create jobs?“That’s a good question. You know, a lot of people as me, ‘Doyou think it’s a company’s job to create jobs?’ and myresponse is a company should have values because acompany is a collection of people. And people should havevalues, so by extension, a company should. And one of thethings you do is give back. So how do you give back? We giveback through our work in the environment, in running thecompany on renewable energy. We give back in job creation.And so if you look at job creation in particular, we’ve nowcreated two million jobs in America. Two million. And so let megive you a little bit of information on this – and this doesn’tinclude the multiplier effect, by the way, that would make it aton more. As you look around this campus, we now have80,000 people in the United States, so about 25,000 are heredoing R&D. but we have a huge facility in Austin as well thathas 6,000 people that does everything from engineering tocustomer support to financial services, et cetera, and, ofcourse, we have stores across the United States. In addition tothis, we buy a lot from U.S. suppliers, and this includes thingslike we manufacture here, our suppliers manufacture here.Corning is an example of this. We buy the glass from iPhoneand iPad from Corning. But there’s many other examples. Webuy adhesives from 3M. 3M manufactures in my home state ofAlabama and many other places as well. And so we actuallyspent over 50 billion last year in this country. I mean, this isincredible. And then we have a developer community. And thisdeveloper community is almost 1.5 million people now. im-cramer-complete-transcript.html