Having declared in March 2014 that the Apple TV business was no longer a “hobby” – a term used by Steve Jobs, his predecessor as CEO – current incumbent Tim Cook has said he feels confident about it and where it could go, confirming that Apple would continue to improve the product.
Speaking during Apple’s Q2 2014 Earnings Release Conference Call, Cook said the reason he stripped off the hobby label was that when you look at the sales of the Apple TV box itself, and you look at a content that was bought directly off of Apple TV for 2013, that number was over $1 billion. “And so, it didn’t feel right to me to refer to something that’s over $1 billion as a hobby. Also from an investment point of view, we continue to make the product better and better. And so it doesn’t feel right from that point of view either,” he explained.
Responding to the day’s earlier news of a major carriage deal between HBO and Amazon for its Prime Instant Video service and Fire TV device, Cook noted that Apple had HBO GO already on Apple TV. “You have to authenticate in order to use it, but you have to do that with Amazon service as well from my brief read of their announcement. I think they in addition to that [have] got some older content from HBO to put on there,” he said.
“I haven’t had a chance to evaluate exactly what it is and don’t have a personal point of view on that yet. But if I look broadly at the content on Apple TV, I think it compares extremely favourable to the content that is on the Amazon box.”
Cook said that Apple had sold “about 20 million of the Apple TV” adding that it had “a pretty large” installed base. “I’m feeling quite good about that business and where it can go,” he concluded.
The Company posted quarterly revenue of $45.6 billion and quarterly net profit of $10.2 billion, or $11.62 per diluted share. These results compare to revenue of $43.6 billion and net profit of $9.5 billion, or $10.09 per diluted share, in the year-ago quarter. Gross margin was 39.3 per cent compared to 37.5 per cent in the year-ago quarter. International sales accounted for 66 per cent of the quarter’s revenue.
“We’re very proud of our quarterly results, especially our strong iPhone sales and record revenue from services,” said Cook. “We’re eagerly looking forward to introducing more new products and services that only Apple could bring to market.”