AAPL
#<UNK>, it's <UNK>.
We look at it a bit differently than you do.
We look at it as our job is to grow our products, regardless of the price, which means that we need to convince, in some cases, people to move from one price band to the other.
And, that we think that if we do a great job with the product that people will be willing to spend more because they get so much more out of it.
I think you can look at the results on the iPhone and see that in action.
We grew 87% in China.
We grew 90%-plus in India.
Emerging markets are growing 65%.
These numbers are unbelievable, and they are done in an environment where it's not the best of conditions.
That's how we look at it.
We don't do the [MBA] analysis of there's only X people buying in a price band, and therefore, we can only get X minus Y percent.
That's not the way we have ever looked at it.
If we did, we wouldn't be shipping any products.
I think there's no doubt; if you look at it, we are expanding the market size in those areas.
It's also true that there's some people that are switching from comparable price points to the iPhone, and that's great, too.
But, I think the answer is that both of those things are happening and it is key that we do both, not just one.
86% also seems low to me, but I was quoting a third-party source and not our own data.
Our own data would look better than that, but the numbers are only comparable if I quote the third-party source for both, and so that's what I'm doing.
On the upgrade cycle, what we are seeing; it's not remarkably different.
However, there's a number of plans that people begin signing up for in the last year that could change it.
These are upgrade-any-time kind of plans.
They may be one-year leases that could actually help the upgrade rate.
I think it will be interesting to see how that plays out over the next horizon.
But, generally speaking, I see positive vectors there, not negative.
In the aggregate.
Well, we think the ---+ <UNK>, it's <UNK>.
We think the phone has a lot of legs to it; many, many, many years.
There's tons of innovation left at the phone.
I think we are in the early innings of it, not in the late innings.
And I think the market rate of growth over the long haul will also be impressive, and so I think there will be multiple winners here.
So that's how I see it.
In terms of the other things that we're doing, we have some great capability and great teams in Apple, and so we can do more than one thing.
And so, we have other things that we're working on as well.
But at the aggregate level we still remain very focused, because if you look at our size versus the number of projects we have going, it's much smaller compared to most.
But, that's how we do things, and that's how we get the level of quality that we want out of each one of those.
And so, the other things that you named, whether it be Apple Music or Apple Pay, both of these are very important to us.
And things that you didn't mention: the Mac continues to perform very well.
I'm still bullish on iPad.
We've gotten ---+ with iOS 9, there is some incredible productivity enhancements coming in with split view and slide over and picture-in-picture.
These things are incredible features.
The enterprise business is clearly picking up, and more and more companies are either contracting for or writing apps themselves.
And, I believe that the iPad consumer upgrade cycle will eventually occur, because as we look at the usage statistics on iPad, it remains unbelievably great.
The next closest usage of the next competitor, we are 6 times greater.
And so, these are extraordinary numbers.
It's not like people have forgotten iPad or anything.
It's a fantastic product.
So I see a lot of runway.
And as I look geographically, where we have been doing really good in the emerging markets, our share is still not high in any of them and so there is a lot of headroom there as well, as there is in most developed markets as well.
And so, I look around and I see opportunity left and right.
That's what we're focused on.
It's a very good question.
We remain extremely bullish on China and we're continuing to invest.
Nothing that's happened has changed our fundamental view that China will be Apple's largest market at some point in the future.
It's true, as you point out, that the equity markets have been ---+ have recently been volatile.
This could create some speed bumps in the near term.
But to put it in context, which I think is important, despite that volatility in the Chinese market, they're still up 90% over the last year and they're up 20% year to date.
And so these kind of numbers are numbers I think all of us would love.
Also, the stock market participation among Chinese household is fairly narrow and the stock ownership is very concentrated in a few people who put what appears to be a smaller portion of their wealth in the market than we buy.
And so I think, generally, this has been ---+ or at least as we see it, maybe it's not true for other businesses ---+ that this worry is probably overstated.
So we're not changing anything.
We have our pedal to the metal on getting to 40 stores mid next year.
As we had talked about before, we are continuing to expand the indirect channel as well.
As you point out, and I think this is a major point that many people miss, the LTE penetration in China is only at 12%.
China doesn't possess the level of fiber that some other countries do, and so in order to get great video performance, et cetera, raising that penetration is really great.
I think that really plays to an incredible smart phone future there.
Also, and I can't underestimate ---+ I can't overstate this: the rise of the middle-class there is continuing and it is transforming China.
I saw a recent study from McKinsey that's projecting the upper middle class to grow from 14% to 54% of households over the 10-year period from 2012 to 2022, so we are within that period at this moment.
And you can see ---+ for all of us that travel there so much ---+ with every trip you can see this occurring.
And so I think we would be foolish to change our plans.
I think China is a fantastic geography with an incredible, unprecedented level of opportunity there and we're going to be there.
I'm very familiar with the ads.
In certain geographies, the way that we win is to get switchers.
In other geographies, the way that we win is to get people to buy their first smart phone.
In other geographies, the way that we win is to get people to upgrade from their current iPhone.
All of those are very important for us.
In many geographies, it's two of those, or in some geographies, it's all three of those.
And so all of those are important.
We are very focused on growing iPhone around the world, not just in one geography, and getting our message out there through ads is one way to do that.
Yes, <UNK>.
Obviously, FX has been a significant hit in many ways, of course.
It reduces our growth rates.
We would be 800 basis points higher this quarter from the 33% that we've reported if it wasn't for the movement in currencies around the world.
Really, when you look around the world, if you exclude China, essentially every single currency has weakened against the dollar.
We are pretty careful and thoughtful about where we increase prices and when and by how much [during] mid cycle, because it's not something that we particularly like to do.
We've had circumstances around the world this year where, frankly, we didn't have many options because the currency movement was so large, and so we've had to reprice.
I have to say that it's been remarkable.
Look, in the long run, a strong US dollar is not a positive for our international business.
It's normal to see a drop in demand when prices go up.
That goes without saying.
It has been remarkable so far to see that.
We did take prices in a few markets, but remarkable to see how resilient iPhone sales have been because we have increased ---+ in spite of these price increases, we have increased sales and we have increased market share in all our geographies around the world without exception.
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Maybe the best way to talk about this is at the product level.
On the Watch, our June sales were higher than April or May.
I realize that's very different than what some of the ---+ is being written, but June sales were the highest.
And so, the Watch had a more of a back-ended kind of skewing.
The phone itself followed what I would call a normal seasonal kind of pattern.
If you look at the ---+ it sounds like you're honing in on the greater China results themselves.
There's no obvious impact for last quarter in the greater China numbers.
Obviously, with the aggregate or the consolidated number being 112%, it's hard to find a lot of bad things in the numbers.
