Apple Q3: Cook talks future product line-up; IBM, Beats deals

Apple Q3: Cook talks future product line-up; IBM, Beats deals

Summary: Apple's third-quarter earnings were a splattering of hits and misses. What's coming up for the second half of the year is slated to be the most exciting.

TOPICS: Apple, IBM, iOS, iPhone, iPad
(Image: Apple)

It's been a busy few months for Apple — not so much on the new product line-up side of things, but building the company even more from within.

In the past few months, we've seen Apple acquire Beats for $3 billion in a mix of cash and stock, and Apple and IBM spark a collaboration that will see exclusive industry-specific applications built for the iPhone and iPad.

And that's not all for the rest of the year.

We've got the iPhone 6 on deck for later this year, new desktop and software landing in the August-September timeframe, new iterations of its existing hardware range, and a highly-anticipated wearable, dubbed the iWatch.

Maybe that's good enough reason for the quiet patch. Apple's been busy, just rather quietly.

On the follow-up earnings call with members of the media and analysts, Apple's senior management fielded questions on its current progress, and dished out some details on recent developments.

And it didn't take long for the beans to spill.

"We've got a busy fall... we're very excited about what we've got in the pipeline," Apple's chief financial officer Luca Maestri said in response to a question. Chief executive Tim Cook followed up by saying he was excited for the "incredible pipeline of new products and services."

Here's what else happened on the call.

Apple on Beats acquisition

It was one of the leakiest expected acquisitions of the year. Apple snapped up Beats for a cool few billion, which Apple chief executive Tim Cook said that music is "part of Apple's DNA."

He added: "Beats provides Apple with a fantastic streaming service, rare talent, and products we can build on."

But for $3 billion for a subscription service and a headphone unit? It seems like a lot. That said, Cook said he doesn't let the massive cash pile "burn a hole in our pockets," and will only acquire when it's complementary to Apple's own products and services. 

Besides the Beats deal, though, Apple had completed 29 acquisitions since the start of 2013, and five acquisitions at the end of the March quarter.

The Beats deal is expected to close this quarter, ending mid-September.

Apple on IBM deal

The Apple-IBM deal may well be one of the more lucrative technology deals of the year for both firms.

In case you missed it, the two companies will build more than 100 vertical-focused enterprise apps built for Apple's iPad and iPhone, for retail, healthcare, and others.

In return, IBM's cloud services — such as device management, security and analytics — will be optimized for iOS.

Both companies win, and win big. Apple particularly wins, as enterprise customers will be further lured towards snapping up the iPad in the business world.

Apple said 99 percent of the Fortune 500 use iPads in their organizations. But those businesses could see a better internal penetration rate, which remains about 20 percent.

Cook added on the call:

"We think that the core thing that unleashes this is a better go-to-market, which IBM clearly brings to the table. But more importantly, apps written with mobile first-in-mind. Not all of the enterprise apps written for iPad have been ported from a desktop arrangement and not taken full advantage of mobile.

He said he was "excited" about bringing that to business and partnering with IBM, and seeing what that can do to sales of business. "I believe the opportunity is huge," Cook added.

"We're not competing with each other... so a partnership in this case is particularly great," he said.

On analytics and big data opportunities, Cook said he didn't discuss business models so much, but said that both companies have revenue streams in the enterprise. 

"Both companies win from those streams," Cook said, noting that Apple wins if it can drive that penetration number from 20 percent to 60 percent — which is where its Mac range of hardware currently stands.

Topics: Apple, IBM, iOS, iPhone, iPad

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  • hmmm i guess Apple went to the IBM school of pipeline management

    IBM famously hyped a non existent product freezing the market waiting for the nonexistent product and destroying their competitor with a real product, by the time the lie was uncovered the damage was done.
    • I Think You Meant to Say . . .

      Microsoft famously hyped a non existent product (Excel) freezing the market waiting for the nonexistent product and destroying their competitor with a real product (Lotus 1-2-3), by the time the lie was uncovered the damage was done.

      And what does any of this have to do with Apple?
    • links to the post and

      what the product was...
    • Apple went to IBM because...

      Apple went to IBM because of Watson Analytics capabilities and because Apple have little experience in building and supporting infrastructure in corporate environment.
    • Sometimes

      Sometimes you need to let the grey matters bit the white matters to the keyboard.
  • Shocking

    Sales of the magical ipad continue to collapse. Worse than last quarter's miserable numbers.
    • Shocking?

      as we know the ipad is the "The Facto" standard for corporates tablettes. MS Surface numbers are derisory; I'm buying now an Ipad Air, expect to use as content creation tool, prototyping and other tasks. Is an INVALUABLE tool. And is getting better, just switched from Galaxy 4/ Android to iphone/iOS. iOS 7 is just beautiful. It works. Now wonder why corporate America is addicted.

      So, by your definition, how Shockingly are Microsoft Surface sales numbers? Apple sold around 13 millions past quarter; the good news is whatever way you look the OSX/iOS/iphone/ipad/Mac ecosystem, it's getting stronger every quarter!
      • It's shocking because he's on the Google Eco System

        which Apple plays well with and not even more eco systems. Kind of funny.
      • Shocking - "wonder why corporate America is addicted."

        Yeah but there is a big 'ole world of customers out there who are NOT "corporate America".

        Funny how you guys always forget about that. Apple and IBM may now control US corporates but the rest of the world, especially Europe, remembers the NSA snooping.

        Neither Apple or IBM are big in European corporates - IBM is just hanging on with legacy mainframes but that is about it. Apple, well they are just a fad for wannabes and senior managers. Sorry, but real work still gets done on Windows PCs backed up by Windows, Linux and Unix servers.

        Anyone who thinks Apple = corporate is deluded.
        Lord Minty
      • "The Facto"???? Naah. That's "De Facto" standard blah blah blah

        duh. lol
  • They keep saying that

    They keep saying that yet it's just the iPhone with a new number or a new letter. The IBM deal is really insignificant to either company. It could be a nice value added feature for sales staff but hardly anything interesting on the analytics side.
    Buster Friendly
    • Wow you really do not have a

      clue about the enterprise or you would realize how silly that statement was.
  • Microsoft is shaking it's head!

    "Apple said 99 percent of the Fortune 500 use iPads in their organizations."

    Microsoft says those fortune 500 companies wasted an astronomical amount of money and should have bought Microsoft Surfaces!
    Pollo Pazzo
    • Laptops

      They should buy laptops. There are a few cases where a tablet is better -- most times not.
  • when clueless barks....

    I read the above comments and wonder how often clueless reader state opinion base emotional state rather then real knowledge (aka 'verbage'). the deal between IBM and Apple is all about new highly secure enterprise environment to replace the currently dying blackberry enterprise communication services. The deal include development of better and deeper root/core system that is compliant with DOD requirement and a secure communication layer on top of it. Analytics base application with access to IBM Watson AI will track corporate communication abnormalities and pattern to increase corporate data traffic securities. that is what this deal is all about.
    • Shhhhhh don't tell ol Buster up there

      he thinks it's silly. Ignorance is bliss I guess.
  • Google/Sumsang Knox Vs IBM/Apple

    Google/Samsung Knox Vs IBM/Apple who will own the next corporate and military messaging and data traffic backbone. Current Anti virus and Internet security packages using traditional mean to identify malware are no longer sufficient when data move from local hard rives to cloud storage. Watson Analytics ability to inspect two billion instances per second and isolate patterns is the base concept of new corporate data securities.
  • Next Headline: "Mattel and IBM Team Up for Enterprise"

    I mean common people, APPLE is a TOY company. All their money has been made from selling TOYS!! iPod=Toy, iPhone=toy (an expensive one that can make calls, consume media, but not much else that should interest enterprise), iPad = TOY (same as iPhone but can't make calls much less edit a document effectively. I guess they can be used to look at porn in congressional meetings :) ). Everything else they sell is peanuts in the grand scheme of things. They have made themselves one of the biggest TOY companies in the world.
    And Microsoft already has the enterprise tablet market covered. It is called the Surface Pro. If Apple really wants in the enterprise, they need to make an iPad Pro with their PROFESSIONAL big boy OS on it, not the TOY OS called iOS.