“Following fiscal Q1 results that missed expectations on the top line, Apple [yesterday] evening held a conference call with CEO Tim Cook and CFO Luca Maestri in which the two addressed a broad weakening in global economies,” Tiernan Ray reports for Barron’s.
“Asked about the company’s outlook for the quarter, Maestri said growth in revenue was being hit by the rising U.S. dollar — to the tune of 4 percentage points,” Ray reports. “However, he also talked about broad weakness in the global economy: ‘The macroeconomic environment is weakening, particularly the commodity-driven nations, such as Russia, Brazil, Canada, Australia, clearly the economy is weaker than a year ago. One of the things we have done to respond to respond has been to increase the price of some of our products in certain international markets. That has protected our margins both in December and in our guidance, but inevitably over time, the higher prices affect demand. So we are capturing that in our guidance. These are the major reasons.'”
“Cook, asked about the ability to keep selling the iPhone globally, remarked that it is ‘now a dramatically different macro-environment’ from what it was a year ago,” Ray reports. “‘From the currency point of view, we’ve had to adjust pricing in several of these markets,’ added Cook. But he quickly added that the company was feeling the effect of ‘melees in virtually every country in the world.'”
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MacDailyNews Take: There’s no such thing as a free lunch.
Although things are fairly bleak in various countries, from Russia to Brazil, and some other economies tied to — oil-based economies — we do believe that this too shall pass, and that these countries will be great places, and we want to serve customers there. We are not retrenching, we don’t believe in that. Fortunately we are strong enough to continue investing. The downside of economic stress is that some asset prices get cheaper and that sort of thing, this is exactly the period that you want to invest and do so confidently. — Apple CEO Tim Cook, January 26, 2016
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