Apple CEO says US and China have ‘unavoidable mutuality’ as profit beats estimates

Apple Inc. CEO Tim Cook said that the trade relationship between China and US is not a zero-sum game and that the world’s two biggest economies can mutually benefit if they work together to “grow the pie”.

“China and the US have this unavoidable mutuality where China only wins if the US wins and the US only wins if China wins and the world only wins if China and the US win”, Cook said in a conference call on Tuesday to discuss the Cupertino, California-based company’s quarterly results. “I think history shows us that countries that embrace openness and diversity do much, much better than the ones that are closed.”

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Cook, who did not mention his meeting with US President Donald Trump at the White House last week, said he believed the two countries “together can both win and grow the pie, not just allocate it differently”. The chief executives of the world’s biggest company by market cap and the world’s biggest economy met to discuss trade issues ahead of talks between US and China officials later this week in Beijing. 

“That’s our focus and I’m optimistic that – I don’t know every play by play that will happen but over time, I think that view will prevail,” Cook said, in response to a question about the likely impact on demand in the event of a trade war between the US and China. 

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Cook’s comments came as Apple delivered revenue and profit that beat analyst’s estimates and projected continued sales momentum, calming concern about demand for the iPhone, its most-important product.

Apple revenue rose 16 per cent to $61.1 billion in the fiscal second quarter, the fastest growth in more than two years. Profit came in at $2.73 a share. The company also raised its dividend, unveiled a new $100 billion share buy-back and said services sales jumped 31 per cent.  The stock rose in extended trading.

Cook said he continues to believe that China is a “phenomenal country with lots of opportunity” both from a market and app developer point of view. The company has almost 2 million application developers in China that are writing apps for iOS and the App Store, and “they’re doing unbelievably creative work and innovative work.” 

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Concern about the iPhone business was fanned by suppliers that recently reported weak demand for high-end handsets, another sign the smartphone boom that made Apple the most-valuable company is ebbing. 

It has also been under pressure in China, where some consumers are shunning pricey iPhones and local rivals like Oppo and Vivo are grabbing market share. Tuesday’s report eased these fears, with China revenue rising 21 per cent year-over-year.