Even Without A Headphone Jack, iPhone 7 Boosts Apple's Sales

Feb 1, 2017
Originally published on February 1, 2017 2:00 pm

It was a dramatic market entry for the iPhone 7 last year. Many Apple customers grumbled when Apple took away the headphone jack and gave everyone an adapter to plug earbuds into the Lightning, or charging, connector.

But everyone seems to have adjusted. Apple sold 78 million iPhones over the holiday season.

In an earnings call, CEO Tim Cook indicated Apple could have sold more of them if it had enough in stock, says Gartner Research analyst Brian Blau.

"That was encouraging news," Blau says. "That means that there's built-up demand out there, and that means that it's very possible that that demand will be continued into this quarter."

Apple has more than a billion activated mobile devices around the world. Along with the increased iPhone sales, it's also bringing in more revenue from its app store, iTunes and cloud services.

Cook mentioned the current U.S. political climate in connection with future growth. He seems to believe it's likely that Congress and the Trump administration will make it less pricey for Apple to bring billions of dollars back into the U.S., by decreasing the tax penalties.

Apple is expected to move into creating original film and TV content. Forrester Research analyst James McQuivey says he could imagine a way for Apple to spend that money.

"Perhaps investing in a major studio in the U.S. in such a way that you can start making original content right away. Having more of that money here locally to do that would be one way to spend that money," he says.

Earlier this week, Cook was less sanguine about the Trump administration. He criticized it for the executive order banning immigration from some countries, which would affect some Apple employees.

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IPhones are still cool - or at least people are still buying them a lot, which is good news for Apple, which took a gamble on the latest version. NPR's Laura Sydell reports.

LAURA SYDELL, BYLINE: It was a dramatic market entry for the iPhone 7 last year. Many Apple customers grumbled when Apple took away the headphone jack and it gave everyone an adapter to plug its earbuds into the lightning, or charging, connector. But everyone seems to have adjusted. Apple sold 78 million iPhones over the holiday season. And in an earnings call, CEO Tim Cook implied they could have sold more of them if they'd had enough in stock, says Gartner analyst Brian Blau.

BRIAN BLAU: So that was encouraging news. And that means that there's built up demand out there. And that means that it's very possible that that demand will be continued into this quarter.

SYDELL: Apple has more than a billion activated mobile devices around the world. So along with the increased iPhone sales, it's also bringing in more revenue from its AppStore, iTunes and cloud services. CEO Cook mentioned the current political climate in the U.S. in connection with future growth. He seems to feel it's likely Congress and the Trump administration will make it less pricey for Apple to bring billions of dollars back into the U.S. by decreasing the tax penalties. Apple is expected to move into creating original film and TV content, so Forrester analyst James McQuivey could imagine a way for Apple to spend that money.

JAMES MCQUIVEY: Perhaps investing in a major studio in the U.S. in such a way that you can start making original content right away. Having more of that money here locally to do that would be one way to spend that money.

SYDELL: Earlier this week, Cook was less sanguine about the Trump administration. He criticized it for the executive order banning immigration from certain countries, which would affect some Apple employees.

Laura Sydell, NPR News, San Francisco.

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