With Apple Back on Top, CEO Tim Cook Preps for Earnings Curtain Call

In his final earnings call as Apple CEO, Tim Cook is leaving the Mac-maker exactly as he found it: the biggest company in the world by market value.

Shares of Apple have risen 26% this year, enough to help it retake the market cap throne from momentary usurper Nvidia earlier this month, and push it past the $5 trillion market cap threshold for the first time ever this week. As Cook bows out and incoming CEO John Ternus prepares to take over, the company seems to have a renewed focus on what it has always done well: consumer products.

Home Is Where the Smart Is

In some ways, investors have nowhere to turn but Apple, which is blessedly (or, rather, strategically) removed from the capital spending craze now legitimately squeezing tech-giants-turned-hyperscalers. Google parent Alphabet announced the first quarter of negative cash flow in its history during an earnings call last week, and shares of Meta were hammered in after-hours trading yesterday following second-quarter earnings that trailed analysts’ expectations. Chip stocks, meanwhile, are caught between a brutal memory crunch and a seeming disbelief that the capex boom can and will continue as promised.

Even that memory crunch isn’t enough to sink Apple. Despite raising prices on iPad tablets and computers, Apple has held the line on the iPhone, a gambit that has paid off. The company is expected to report a 20% increase in iPhone sales during its last quarter, even as global smartphone shipments fell 11% in the same period to their lowest level since 2013, according to Counterpoint Research. Simply put, downstream players have less pricing power and less resilient customers than Apple.

With its core product on sales cruise control, Bloomberg reported this week that Apple now plans to renew its effort in the home-based smart device category:

• That includes a brand new “smart hub” device featuring a 7-inch display screen (placing it somewhere between a very large iPhone and a very small iPad), capable of FaceTime, home security monitoring, smart device control and more. The smart hub will be built around the company’s new Siri AI and can sit on counters or walls via a magnetic hanging system.
• Apple also plans to soon launch refreshed, AI-ified versions of its longstanding Apple TV set-top box and its HomePod Mini smart speaker, part of a product family it has sold since 2018. The goal, according to Bloomberg, is to convince users to have multiple interconnected iDevices throughout the home.

Scroll Now, Pay Later: Analysts expect Apple to raise the price of iPhones eventually, but the company has a plan to maintain sales volume, too. On Tuesday, it launched Apple Upgrade, a tie-up with Klarna that will allow consumers to lease devices; iPhones can be leased for up to two years at a price starting at $17.99 per month.