7 important things Tim Cook just said about iPhone 7, Apple Watch 2 and more

Apple CEO Tim Cook thinks Wall Street has it wrong: his company had “an incredible quarter” despite the fact that it experienced its first revenue decline in 13 years.

That’s not all. He dropped important hints about the iPhone 7, Apple Watch 2and expansion of key services while talking to CNBC “Mad Money” host Jim Cramer.

There’s a lot to take in from the Cook interview, and he’s extremely vague about everything except for the fact that Apple is “fairly secretive” company when it comes new products.

That’s why we parsed through the entire program in order to understand everything being said. Here are the seven big takeaways from this Apple interview.

1. Unfiltered iPhone 7 hype

There has been ample talk suggesting that the iPhone 7 will be a boring, iterative update, even though this year’s phone is due to be a major refresh that happens every two years. Not so fast.

“We’re incredibly excited about things we’re working on. Incredibly excited,” said Cook after Cramer asked about the iPhone 7 directly.

“We’ve got great innovation in the pipeline, new iPhones that will incent you and other people that have iPhones today to upgrade to new iPhones.”

Cook didn’t go into detail on the new iPhones (shocker), but we’ve been hearing plenty of rumors about a dual-lens camera for the iPhone 7 Plus, reworked antenna bands and no headphone jack. Of course, there’s hope among Apple faithful that’s there’s more to it than that.

“We’re going to give you things that you can’t live without that you just don’t know you need today,” Cook boasted when talking about future iPhones.

“That has always been the objective of Apple. To do things that really enrich people’s lives. That you look back on and you wonder ‘how did I live without this?'”

In other words, Cook promised that the next iPhone won’t be boring, contrary to the ho-hum predictions of newsmaking analysts. At the end of the day it’s his job to keep the hype train rolling, and we’ll likely have to wait until September to know who’s right.

2. Apple Watch 2 hints

Cook hasn’t directly acknowledged that the Cupertino company is working on an Apple Watch 2, but everything he said indicates that a second generation smartwatch is inevitable.

“You’ll see the Apple Watch getting better and better,” he promised. This statement could relate to a new Apple Watch for 2016, or possibly just watchOS 3 software. My bet is both.

Why? Because, right now, the Apple Watch is something we *can* live without, and no mere software update is going to dramatically change that. Yet Cook continues with promises that the Watch will be a must-have down the line.

“I think that in a few years we will look back and people will say, ‘How could I have ever thought about not wearing this watch?,'” he said to Cramer. Clearly, an Apple Watch 2 is the only way for this to happen.

With the current Apple Watch, Cook admitted: “We’re still in learning mode. We’re learning fairly quickly, though. We know a lot more than we did a year ago.”

Time to expand that “new category,” Tim, and make it something even more worthwhile.

3. Emphasis on services (which includes Android)

Apple is moving beyond phones and hardware with an intense focus on services, and it’s paying off in a big way.

“Services now is the second largest revenue segment at Apple,” said Cook. “Last quarter we were at 6 billion, up 20%. It is fast growing.”

This includes App Store purchases, Apple Music subscriptions, Apple Pay transaction fees (off of credit card companies, not you), and digital content, from movies to songs to e-books.

“This is huge,” Cook exclaimed, reminding everyone that there are over a billion active Apple devices with such capabilities out there.

What’s interesting here is that Apple can instantly double down on its revenue by opening some its services up to Android. It’s already done that with Apple Music on Android.

Many see this as a test case for more Android app integration. If services are as important as Cook claims, it’s almost a no-brainer to further expand to the biggest mobile OS, too.

4. Thinks Apple is doing just fine, thanks

Cook gave us every reason why Apple isn’t in trouble, despite the fact that Wall Street analysts have basically been writing the company’s obituary for the last seven days.

“We just had actually an incredible quarter by absolute standards, 50 billion plus in revenues and 10 billion in profits,” Cook pointed out.

“To put that in perspective the 10 billion is more than any other company makes so it was a pretty good quarter but not up to the Street’s expectations clearly.”

There are a few problems, according to Cook: People are upgrading at a lowerrate than a year ago because last year’s rate was “abnormally high” for iPhone 6 and iPhone 6 Plus.

He went on to twice mention that customers love Apple products, noting that satisfaction and loyalty rates are at an all-time high. That’s the most important thing long term for the company, summarized Cook.

5. India is the new China

Here’s another reason Cook thinks Apple has room to grow: India hasn’t reached peaked iPhone. In fact, it hasn’t even been able to properly use it due to a lack of LTE coverage.

“India will be the most populous country in the world in 2022,” said the facts-dropping Cook. “India today has about 50% of their population at 25 years of age or younger.”

In this “very young country,” Cook summed up the vibe: “People really want smartphones there. And this year, the first year, LTE begins to roll out.”

Previously, without LTE, the Indian population hasn’t been able to tap intoiPhone‘s potential, or the potential of any high-end smartphones.

Cook put it into perspective for the Cramer and the Western world: “So many of your viewers here in the United States, they’re used to using LTE and streaming video. And hopefully they’re getting a good experience there. In India you can’t do that long – there is no LTE. And so that’s changing.”

This echoes what Cook said during his latest quarterly earnings call. He referred to India as “where China was maybe seven to ten years ago.”

He ended his India discussion during today’s interview with three words: “Huge market potential.”

Of course, what Cook didn’t say is that companies like Samsung, Xiaomi and Motorola already have a brand presence there among lower-end devices. Motorola is even holding its next launch event for the budget-friendly Moto G4 in New Delhi.

6. Still growing in China, even if the market isn’t

Everyone is hurting in China in wake of the its economic downturn, but Apple’s revenues are larger than any other foreign company in the country, according to the Apple CEO.

“Economy, clearly not as strong as it was a year ago. Softening. Currency weakening,” was the curt way Cook laid it out before putting on the best pair of rose (gold) colored glasses.

“However, here’s the way I look at it. Two years ago we had enormous sales. And so last year and last year we did even better, 80% better. So we grew 80% over the previous year,” he said.

“This year in constant currency in mainland China, we were down 7. So if you look at it on a two-year basis, Apple grew 70% in China. It’s hard-pressed to say those aren’t good results.”

He conceded that, in general, China’s smartphone industry isn’t growing. How is Apple growing, then? “There’s movement between different suppliers of smartphone,” he explained.

“The great thing is, the [Android] switcher rate in China is huge. 40% up over the first half of last year, the first half of this year. This is huge. So these are people switching from Android smartphones to iPhone in China.”

7. Apple buys a company every 3 to 4 weeks

Another way that Apple can excite us with the iPhone 7 is by buying emerging companies. To be clear, it’s never been in Apple’s DNA to scoop up large, established companies.

“We’ve bought some companies to help us in services,” admitted Cook. “We generally acquire a company every three to four weeks on average.”

“It’s a rare month that there’s not a company being bought,” he said to the surprise of a lot of viewers, I’m sure.

They’re usually companies you’ve never heard of: Motion capture studio Faceshift, Machine learning firm Perceptio and augmented reality startup Flyby Media. All joined Apple within the last eight months.

None are household names and may not sound very exciting today. But Apple did buy Siri in 2010, and now that’s a cornerstone of its iPhone and iPad operating system.

“We typically buy for technology and really great people. But you know, we’ll see. We’re always looking,” said Cook.

Apple in 2016

Clearly, the Apple CEO remains bullish about the company’s worldwide goals and its upcoming products, even Wall Street and some investors think otherwise.

It comes to down two reasons: the new iPhone and Apple Watch 2. He side-stepped naming the iPhone 7 when Cramer brought up the phone, but he did say it’ll be worth the upgrade.

That’s good news for Apple faithful, because the Samsung Galaxy S7, Galaxy S7 Edge and LG G5 have come up with nifty tricks and better cameras.

The head of Apple has the positive thinking to make 2016 sound exciting. Now they just need to back it up.

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