What Tim Cook Did and Didn’t Disclose About the Apple Watch

When it comes to the iPhone, Apple often can’t wait to tell the world how popular its new models are, typically releasing early sales figures the Monday after they go on sale.

But it’s a different story with the Apple Watch, which started shipping Friday.

During the company’s quarterly earnings call today, April 27, CEO Tim Cook sounded somewhat evasive when investors probed him about Apple Watch sales. All eyes will be on next quarter’s report for Apple Watch sales, but Cook has previously indicated (paywall) that Apple Watch sales will remain somewhat obscure, and will be reported only in a group with other products.

Here’s what Cook had to say on today’s earnings call:

• “Right now, demand is greater than supply, and so we’re working hard to remedy that.”
• “Apple Watch margins will be lower than company average.” (Gross margins were 40% in the last quarter.)
• “The customer response literally from what I’ve seen is close to 100% positive.”
• But Cook also hedged his enthusiasm a bit: “It is a new product for us, and with any kind of new product, you wind up taking some time to fully ramp.”

Toni Sacconaghi, an analyst at Sanford Bernstein, pressed Cook further.

“I would say relative to other product launches, where your commentary around demand was characterized by superlative after superlative, that assessment feels very modest,” he said. “Are we reading you right in terms of that?”

Cook, whose voice sounded noticeably tired (perhaps he was exhausted from his travels for the Apple Watch launch), replied that he was “thrilled” with the response to the company’s newest gadget.

“I don’t want you to read it or say it any other way,” he said. “I’m not sure how to say that any clearer than that.”