Apple’s Cook: VR Not a Niche

Record Sales for Apple TV, Apple Watch in Q1
Oculus -Rift and controller 400x300.jpg

Perhaps dropping a hint of future plans revolving around virtual reality, Apple CEO Tim Cook said the emerging medium is more than a geeky novelty. 

“No, I don’t think it’s a niche,” Cook said Tuesday on Apple’s fiscal Q1 call. “I think it can be…really cool and has some interesting applications.”

Cook stopped short of outlining any specific product plans Apple might have for VR, but his positive opinion comes amid what’s expected to be a big year for the category amid the recent launch of a priced-reduced version of the Samsung Gear VR mobile headset, the arrival of high-end products such as the Oculus Rift and HTC Vive, and Google Cardboard, an inexpensive platform that gives mainstream consumers a taste of the technology. The Consumer Technology Association expects VR headset unit sales to reach 1.2 million units in 2016.

But Cook’s thoughts on VR was a relative sideshow, as Apple delivered record revenues and earnings and product shipments in Q1, though those results were overshadowed amid an expected slump in iPhone sales during the current quarter.

On the financial end, Apple posted Q1 revenues of $75.9 billion, up 2%, and net income of $18.4 billion. Analysts were expecting earnings of $3.23 per share on $76.54 billion in revenues.

Revenue from Apple’s App Store rose 27% and the number of “transacting customers” increased to 18%.

Apple sold a record 74.8 million iPhones in the period, but again saw shipments of the iPad decline – Apple, which recently introduced the iPad Pro, sold 16.1 million of the tablets, down from 21.4 million in the year-ago quarter.

Cook said the Apple “had our best quarter by far for the Apple TV” following the introduction of a new version that now supports more than 3,600 apps, and said Apple Watch sales also swung to a record.

Apple, however, did not break out specific sales figures on those devices. Cook said Apple reached a milestone as it crossed 1 billion “active devices” across all product lines.

Looking ahead, Apple sees iPhone sales to decline during fiscal Q2. Apple expects Q2 revenues of $50 billion to $53 billion, off from an expected $55.61 billion.

Cook noted that Apple had begun to see “some signs of economic softness” in Greater China earlier this month, most notably in Hong Kong. “Despite the economic challenges all over the world, Apple remains incredibly strong,” he added.