CNBC News Releases

CNBC Exclusive: CNBC Transcript: Apple CEO Tim Cook Speaks with CNBC's Jim Cramer Today

WHEN: Today, Tuesday, January 8, 2019

WHERE: CNBC's "Mad Money w/ Jim Cramer"

The following is the unofficial transcript of a CNBC EXCLUSIVE interview with Apple CEO Tim Cook and CNBC's Jim Cramer which aired on CNBC's "Mad Money w/ Jim Cramer" today, Tuesday, January 9th. The following is a link to video from the interview on .

All references must be sourced to CNBC.

JIM CRAMER: Tim, you know I always say, "Own it, don't trade it." But right now, people are saying, "Jim, give me the investment case for buying this stock."

TIM COOK: Well, you know, I never-- try to sell a stock. I try to sell a product.

JIM CRAMER: Never have.

TIM COOK: However-- let me tell you the way I look at it. We manage the company for the long term. The most important things in Apple, one, a culture of innovation. This team is unbelievable in creating hardware and software and services and getting them all to work together. It just works. Second, we have a very large active install bays. We hit $1.3 billion a year ago, and we've added about a $100 million in the last 12 months. Third, highest customer satisfaction and loyalty in the industry. So you put those two things together, you got a lot of-- a big, active install bays, and you got a lotta heavy customers, then you have a recurring revenue stream on your product business. And then because of our ecosystem that we build, which has unbelievable developers in it and-- an app store to get services out there, we built a services business that was, you know, a little over $7 billion in 2010. Last year--for the calendar year, over $41 billion. And so-- and we've said that, you know, we're gonna double the 2016 numbers by 2020. And so we're on a fast clip there. And then, of course, we are shareholder friendly on our-- capital allocation. So you put all these things together, and those are the most important things for us: innovation, customer satisfaction, and the overall size and-- loyal—of our customer.

JIM CRAMER: Okay, so most tech companies, I think, don't innovate nearly as much as you. But let me just put-- posit what we got. You take so many risks that I don't think you get credit for. For instance we had what turned to be real-- ridiculous strings around our neck, and then we got the AirPods. We loved our dumb watch that told time, and now we have a smart watch that saves our lives. We loved the big, fat jack, and then we got the lightning jack. We loved our Sony, $2,000, mirrorless camera, until we got the iPhone X, which takes better pictures. Why do you, therefore, have a 12 multiple? Because to me, that is wrong.

TIM COOK: Yeah, I think it's wrong, too. But I tell ya what I focus on is the customers. And so the customers speak every quarter. They speak every year. They speak every day. And the most important thing for us is that they're satisfied. And so when I read the emails and so forth from customers, they're tellin' me how the Apple Watch has changed their life. They're tellin' me how it motivated them to be more fit, be more active. They're tellin' me that they discovered they had AFib. They're tellin' me they-- found a problem with their heart that they didn't know existed. And if they wouldn't've reached out to a doctor, they might've died. And so these are life-changing things. We've got machine learning embedded in our silicon in our phone. You know, this allows us-- not only the power efficiency to have an incredible performance in a very small package, but it allows us to manipulate this data on the phone, have the transactions on the phone, as opposed to letting them out in the world. And-- you know, this-- the whole privacy issue forum-- we've always been on the right side of privacy. But the market is now moving. And so this is an incredible strength that we've built. The photos that you're able to take with your phone, as you said, I mean, these are life-changing things, if you like to chronical your life. This morning, I was-- I picked up my phone. And I saw a memory from a year ago--

JIM CRAMER: I love the memorything.

TIM COOK: I love it, you know? You see-- my nephew or somebody that's very important to you. And their face just appears. And you have-- a slideshow built for you. These things are-- they're-- unbelievable. And our customers love them. And that's the most-important thing--

JIM CRAMER: But-- okay, so let's-- unpack that. My daughter has the 5. Why? 'Cause she loves it. She said, "Listen, Dad. If you put it in the washing machine, like your wife did, I'll get a new one. But you can't pry it outta my cold, dead hands, 'cause I love it." She is not an upgrader, because she-- you made the greatest product. What do we do about that? What do you do--

TIM COOK: Well, the-- most-important thing, for me, is that she's happy. That is the most-important thing. Now, if she's not upgrading for another reason, maybe-- it's too much of a hassle for her to upgrade. Maybe she's worried about the transfer of data. All of this stuff, we wanna help on. An you know, we've got the store that you're in that's very focused on having the best customer experience there, helping people set up their new phone, making sure all their data's transferred, and also-- allowing them to trade in their current phone, which begins to look like a subsidy that the carrier may have previously provided. And it's-- offsets some of the cost of the new phone.

JIM CRAMER: Okay, so these issues are all occurring at the same time that we do have China. You were very-- abject about China and the 100% of what we didn't think-- of the upside that went away. There are issues involving-- perhaps, not boycotts, we know that's off the table, but patriotism, in a strange way, meaning that, you know what? If I can get a Huawei with a s-- with a subsidy, why should I buy an Apple? It's conspicuously American. How long can that last?

TIM COOK: Well, I think what-- here's what we saw in China in-- specifically. The--Chinese economy, it seemed to us, began to slow, maybe, in the second half of the year. And it was on some sort of rational trajectory. We believe, based on what we saw and the timing of it, that the tension, the trade-war tension-- with the U.S., created this more-sharp downturn. I believe that's temporary. Because I think that, when you really look at it, it's in both countries' best interests to come to an agreement. It is a complex-- very complex trade agreement. And it needs to be updated. But I'm-- as I've said before, I'm very optimistic that this will happen. And so-- that clearly will be good, not only for us, frankly, but I--think more about the-- world in general. The world needs a strong U.S. and--China economy for the world economy to be strong.

JIM CRAMER: My understanding is, even the hardliners in the White House have moved on this issue. And I know President Trump calls you a friend I know you go back and forth. Because you represent the greatest that we have in America. And my understanding is that there are people who feel exactly like you, which means a deal's possible.

TIM COOK: I think a deal is-- very possible. And I'm-- I've heard some very encouraging words.

JIM CRAMER: Even of recent, right?

TIM COOK: Yes, yes, in-- very recently. And so I don't speak for them, obviously. I do talk with them. And I give them my ideas and thoughts.

JIM CRAMER: Okay, now-- we gotta talk about some of these people who-- the naysayers. And we've dealt with them before, when the stock was substantially lower. A Wedbush analyst said, "Apple's clearly the darkest days, representing a challenge in growth." Journal, "It's too soon to call the XR a flop, only after a few months. But early indications are, of course, it's a flop." What do you say to people who say the XR flopped? What do you say to, say, "darkest days"?

TIM COOK: Bologna. I call bologna on that. Let-- me tell you how I view this. Here's the truth, what the facts are. Since we began shipping the iPhone XR, it has been the most-popular iPhone every day, every single day, from-- when we started shipping, until now.

JIM CRAMER: But how about relatively? I mean, there's been other ones that have--

TIM COOK: I mean, do I want to sell more? Of course I do. Of-- course I'd love to sell more. And-- you know, we're-- working on that. And-- but in terms of the product itself, it's an incredibly innovative product. It has a bunch of advanced technologies in it for the chip with the neural engine to security embedded to an edge-to-edge liquid retina display, the first in the industry, longest battery life ever in an iPhone. I mean, it is unbelievable. And the photos that you can take of your life and of your loved ones, I mean, it beats-- many, many of the standalone-- cameras that you could buy now that nobody uses anymore. And-- so these things are-- you know, give a lot of value to the customer. So that's that. In terms of the naysayer, I've heard this over and over again, Jim. I've heard it in 2001. I've heard it in 2005 and '07 and '08 and '10 and '12 and '13. You can probably find the same quotes from the same people over and over again. And I'm not defensive on it. This is America. And you can say what you want. But I'm giving you my honest opinion is that there is a culture of innovation in Apple. And that culture of innovation, combined with these incredible-- loyal customers, happy customers, this ecosystem, this virtuous ecosystem, is something that is probably underappreciated.

JIM CRAMER: Well, then you were surprised with the market reaction to both when you decided to not reveal units and when you revealed the shortfall?

TIM COOK: I'm never surprised by the market, to be honest with you. Because I think the market-- is quite emotional in the short term. And-- we sorta look through all of that. We think about the long term. And so when I look at the long-term health of the company, it has never been better. The product pipeline has never been better. The ecosystem has never been stronger. The services are on a tear. If you look at-- let's just take wearables as an example, right? Wearables, it's mainly the Apple Watch and AirPods. If you look at this, and you-- and on a trailing basis. I'm not projecting. On a trailing basis, we've already exceeded-- the revenue for wearables is already more than 50% more than iPod was at its peak. Now, this is a product that everyone would I-- iPod would say, I think everybody would say it was an incredibly-- important product for Apple, full of innovation, and probably, the trigger for the company getting on a very different trajectory and into other markets. And so already, exceeded it by 50% at its peak, at its peak. Also, if you take AirPods and the Watch separately, and you sort of back these up and align it to the launch date of iPod, as well, and, you know, where all of 'em have a comparable amount of time, you would find that-- that each one, independently, is, like, four to six times ahead of where iPod was at a comparable period of time. And so this-- AirPods are becoming ubiquitous out there. People love them. I get notes every day. They're chock full of technology. But they just work. It's the elegance of them-- but with significant technology and-- built right in and an unbelievable user interface.

JIM CRAMER: Alright keep that thought we talk about innovation. We'll be right back more with Tim Cook in a second.

JIM CRAMER: All right, I've been following stocks for 40 years, Tim. And you guys are a fount of innovation. My wife said, "Tell him, what do they want? Time travel?" What do you have to do?

TIM COOK: Hey, time travel sounds kind of cool.

JIM CRAMER: Right? I mean, that's what – because the reason I mention it is because there are companies that sell at 22 to 23 times earnings, they are the consumer packaged goods companies. They are companies that tend to go from 1% to 4%. If they get 5%, then they get a 28 multiple. And yet, the analysts who follow your company continue to look for units of phones. They are not thinking about the revenue. And yet, if it were Procter & Gamble, and they got that many razors with razor blade, they'd pay 28 times earnings. Are you followed by the wrong people?

TIM COOK: I think that our story isn't well understood. I think Apple is not well understood in some of Wall Street. If you, for example, I think there are several people that believe the most important metric is how many iPhones are sold in a given 90-day period or what the revenue is. This goes – this is far, far, far down my list because the point is, if somebody decides to buy an iPhone a little later, if because of the battery – huge discount that we gave – they decide to hold on a little longer, I'm great with that. I want the customer to be happy. We work for them. And so, but the important thing is that they're happy. Because if they're happy, they will eventually replace that product with another. And the services and the ecosystem around that will thrive.

JIM CRAMER: But as long as it's north of 60%, I mean, as long as cell phones are north – I don't know how you get people to think, even if it's $20 billion in service revenue. It's the 62%. It is overwhelming. And they don't know what to do. And I understand their conundrum, Tim. They don't know what to do. Because the cell phone's such a big part of the pot.

TIM COOK: Yeah, but if you sort of back up and look at Apple, in our last fiscal year, we had $100 billion of revenue that was not iPhone. $100 billion. And in this last quarter, if you take everything outside of iPhone, it grew at 19%. 19% on a huge business.

JIM CRAMER: Again, it's a consumer packaged goods company but not a tech – look, you have the best tech consumer packaged goods, why not accept it and say, "You know what? We're just – we want to be covered by other people"?

TIM COOK: I don't think we get to pick who we're covered by.

JIM CRAMER: Well, I don't know. You're a big company. Maybe you could. Now, I've got some ideas for you, okay? I talked to some people at Walmart yesterday. An arrangement with Walmart, Flipkart to take over India with a budget phone, rather than doing it piecemeal.

TIM COOK: For us, we're about making the best product that enriches people's lives. And so we're not about making the cheapest, right? We want to make a great value. But that's not necessarily the cheapest. And so for us, what we've seen is there's enough people in every country in the world that we play in that we can have a really good business by selling the best phone. Now, the best phone we knew that, as we went to the X and then the follow-on of the XS and the XS Max, that everybody would not want to spend $1,000 for the phone. So we made the iPhone XR. And we put as many of the advanced technologies as we could in that phone—

JIM CRAMER: Well, let Flipkart do the subsidy.

TIM COOK: And we priced it right between the 8 and the 8 Plus of the year before. And so on – but in India, in general, we are all in. It is a major focus. If you look at how we've done over the years, we've gone from, you know, $100, $200 million business to, last year, we hit – we exceeded $2 billion. That $2 billion was flat, year over year, after rapid, rapid growth. And so we have more work to do. We'd like to put stores there. We would like some of the duties and so forth that are put on the products to go away. And we're working closely with the team there. And I believe that we'll have better results at some point in the future. I'm not in the forecasting mode here today. But it's an important market for us.

JIM CRAMER: You have people who are naysayers. One of the naysayers is not an analyst, it's Qualcomm. Qualcomm keeps telling me, over and over again, "You're going to come to the table. You have to. Lost the suit in Germany. Lost the suit in China. Wait until you see them cave." Are you going to cave?

TIM COOK: No. Look, the truth is, we haven't been in any settlement discussions with them since the third calendar quarter of last year. That is the truth. So I'm not sure where that thinking is coming from. The issue that we have with Qualcomm is that they have a policy of no license, no chips. This is, in our view, illegal. And so many regulators in many different countries agree with this. And then secondly, they have an obligation to offer their patent portfolio on a fair, reasonable, and nondiscriminatory basis. And they don't do that. They charge exorbitant prices. And they have a lot of different tactics they use to do that. And that's not just us saying that. I mean, you can see what's coming out of the FTC trial here in the United States. And obviously, I have an issue with some of their other tactics that I'm sure you've read about.

JIM CRAMER: Right, that they say you are in settlement talks all the time.

TIM COOK: Well, not just that, but the paying somebody to write fake news and then promoting it. This is stuff that should be beneath companies. This is not how things should operate.

JIM CRAMER: All right, so let's talk about competition. The other company that I think of with innovation I always have to talk about is Amazon. And they do great voice. You have voice. It's a bit of a contest, Tim. If you threw – you have unlimited capital and you throw it at voice, would it make Siri even better?

TIM COOK: Well, we're putting a ton of investment in Siri. And so if you look at Siri today, Jim, we have about a bit over 500 million devices that are using Siri out there, Siri enabled. And Siri is used over 10 billion times a month. And it's in 21 different languages and 30 something countries. And so we've tried to do – we tried to create a global product. We're not in every country yet. We want to be. And if you want something that is something that has been created on your device, Siri is the best place to do that. And I think I get more and more great things every day. The quality is going up. You know, voice is a never-ending journey. We all speak a little bit differently. I have a southern dialect, not as southern as I used to. But there's a lot of stuff to do there. But I'm highly confident in our ability to keep innovating like crazy there.

JIM CRAMER: Okay last question, because they're giving me some wrap. Healthcare, if you hooked up with different – could you make it so that I can sync? I need to sync – I need to handshake with my doctor, okay? And payments, it can be huge. If you look at a PayPal, they've got a 30 multiple. MasterCard, 30 multiple. Can you layer either one of those on to be able to jump, even though it's huge, the service stream, take it so that it's 40% of your company, by doing more in payments, more in health?

TIM COOK: On services, you will see us announce new services this year. There will more things coming. I don't want to tell you about what they are—

JIM CRAMER: Material, material.

TIM COOK: I believe they will be material over time. I'm not going to forecast—

JIM CRAMER: Right, fair enough.

TIM COOK: You know, precisely, the ramps and so forth. But they're things that we feel really great about, that we've been working on for multiple years. On the healthcare, in particular, and sort of your wellbeing, this is an area that I believe, if you zoom out into the future, and you look back, and you ask the question, "What was Apple's greatest contribution to mankind?" It will be about health. Because our business has always been about enriching people's lives. And as we've gotten into healthcare more and more through the Watch and through other things that we've created with ResearchKit and CareKit and putting your medical records on the iPhone, this is a huge deal. And it's something that is very important for people. We are democratizing it. We are taking what has been with the institutions and empowering the individual to manage their health. And we're just at the front end of this. But I do think, looking back, in the future, you will answer that question, Apple's most-important contribution to mankind has been in health.

JIM CRAMER: Tim Cook, CEO, Apple.

TIM COOK: Great to see you.

JIM CRAMER: Thank you so much, sir.

TIM COOK: Thank you for having me.

JIM CRAMER: Great to see you. Well, now you know the story behind just the units of the cell phone. Tim Cook, CEO, Apple.

About CNBC:

With CNBC in the U.S., CNBC in Asia Pacific, CNBC in Europe, Middle East and Africa, and CNBC World, CNBC is the recognized world leader in business news and provides real-time financial market coverage and business information 410 million homes worldwide, including more than 90 million households in the United States and Canada. CNBC also provides daily business updates to 400 million households across China. The network's 15 live hours a day of business programming in North America (weekdays from 4:00 a.m. - 7:00 p.m. ET) is produced at CNBC's global headquarters in Englewood Cliffs, N.J., and includes reports from CNBC News bureaus worldwide. CNBC at night features a mix of new reality programming, CNBC's highly successful series produced exclusively for CNBC and a number of distinctive in-house documentaries.

CNBC Digital delivers more than 52 million multi-platform unique visitors each month. provides real-time financial market news and information to CNBC's investor audience. CNBC Make It is a digital destination focused on making you smarter about how you earn, save and spend your money by zeroing in on careers, leadership, entrepreneurship and personal finance.

CNBC has a vast portfolio of digital products, offering CNBC content to a variety of platforms such as:; CNBC PRO, a premium service that provides in-depth access to Wall Street; a suite of CNBC mobile apps for iOS and Android devices; Amazon Alexa, Google Assistant and Apple Siri voice interfaces; and streaming services including Apple TV, Roku, Amazon Fire TV, Android TV and Samsung Smart TVs. To learn more, visit

Members of the media can receive more information about CNBC and its programming on the NBCUniversal Media Village Web site at For more information about NBCUniversal, please visit