Jason Snell digs into the transcript of yesterday’s earnings call:
If I had to describe Tim Cook’s attitude during the call, it would be “optimistic.” But only because he referred to his optimism eight different times over the span of an hour. (Maestri added another three on his own.) Then again, when your company just broke a 13-year streak of year-over-year revenue growth, expressing your optimism about the future is probably a smart move.
With that in mind, file all of this away for three months from now: Apple says it won’t grow next quarter, either. When you look at the data, it’s clear that 2015 was a record-breaker for Apple, and a severe outlier. The release of the iPhone 6 seems to have supercharged Apple’s sales just when they were starting to slow down, but a year later those numbers are proving impossible to match.
This means that for the rest of this year, Apple will be putting up numbers that are lower than the ones it put up in 2015–and people who look to the company for growth will be unhappy, even as the company posts quarters with $10 billion in profit and adds to its $200 billion in cash.
The problem is that investors want growth (the “G” word), want a reason to be optimistic that growth is still possible. Growth, on a percentage basis is much, much easier when you are small. Doubling $100 is easy. Doubling $1 million, much harder. Doubling $1 billion requires a much more complex business mechanism that needs to be firing on all cylinders. And once you reach Apple’s size, continued growth is almost impossible.
But the market continues to require growth, especially when you’ve delivered impossibly steady growth for such a long time.