Apple CEO Tim Cook Talks With Jim Cramer—Here Are The Key Takeaways

Apple Inc. AAPL CEO Tim Cook spoke with CNBC's Jim Cramer in an interview aired Tuesday evening covering multiple topics from Apple's services business, China concerns, Wall Street "naysayers" and more.

What To Expect In 2019

Investors and Apple enthusiasts will be treated to "material" new additions to its services in 2019, the CEO told Cramer. Cook didn't offer any specific details aside from a focus on health care, but said it relates to technologies the company has been working on "for multiple years."

Non-Flagship Revenue

Apple collected $100 billion in revenue from products and services that don't directly come from the iPhone, Cook said. Some of the business lines include the App Store, iTunes, Apple Pay and cloud services which combined for 19 percent growth in the recent quarter. Looking forward to the end of 2020, the company expects to double its non-flagship revenue base from current levels.

See Also: 'Jaw-Dropping': Wall Street Reacts To Apple's Guidance Cut, China Business

China Trade Deal 'Needs To Be Updated'

The trade agreement between U.S. and China "needs to be updated" and Cook is "very optimistic" an agreement can be made. The world relies on a "strong U.S. and China for the world economy to be strong."

A resolved trade agreement will "clearly be good" for the American economy but perhaps more important for the "world in general."

Street Analysts Underappreciate The Business

Analysts are making a mistake in not fully appreciating Apple's business, which is powered by a growing ecosystem of both devices and services. Behind the company's line of products is a "culture of innovation" that satisfies the many wants and needs of the "incredible, loyal customers."

Cook doesn't particularly pay attention to analysts who are focused to much on the near term. The market is "quite emotional" when viewing Apple through a small time period and the company "sort of look[s] through all of that."

"The product pipeline has never been better," Cook said. "The ecosystem has never been stronger. The services are on a tear."

6 Takeaways

Loup Ventures' Gene Munster, a former Wall Street analyst that covered Apple, said in a blog post there are six main takeaways from Cook's interview.

• Cook's commentary of new services launch in 2019 is inline with expectations and could come from a relaunch of the digital magazine service Texture which Apple bought in 2018. Other launches will be focus on a combination of hardware and software related to health care.
• Cook is optimistic a resolution to the U.S.-China trade war will be seen soon.
• Apple is likely "doubling down" on trade in offers of old iPhone models. Munster said if the promotion were to end, Cook would have "avoided the topic" in the interview.
• Cook's comments that the Apple Watch represents 5 percent of sales and growing at 45 percent while Air Pods represents 1 percent of sales and growing at 87 percent is consistent with estimates.
• Cook expressed a dedication to grow its business in India through producing iPhones in the country and opening new stores.
• Apple believes it has an upperhand in its legal battles with Qualcomm, Inc. QCOM, which operates unlawfully by charging "exorbitant" prices.

Apple shares traded around $151.42 Wednesday morning.

Photo credit: Valery Marchive (LeMagIT) - Flickr via WikiCommons