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Tim Cook sounds off on coronavirus, 5G iPhone and ads on Apple TV Plus

(Image credit: Photo by MANDEL NGAN/AFP via Getty Images)

Apple's quarterly earnings reports are usually the time when Apple talks about its business. And it had plenty to talk about today (Jan. 28), as the company tallied record revenue and earnings during its fiscal first quarter.

But these conference calls also give analysts the chance to throw some questions at Tim Cook for insights on Apple's business. So when he wasn't discussing the iPhone's strong sales rebound or the surging growth for Apple's wearables and services during this latest session, Cook sounded off on several noteworthy topics, including the coronavirus outbreak in China, the prospects for 5G smartphones and Apple's vision for its fledgling Apple TV plus streaming service. Here's what the Apple CEO had to say.

Coronavirus

Apple has a more than a casual interest in the pneumonia-like coronavirus outbreak that started in Wuhan, China and spread to other areas, including a few cases in the U.S. China's an important part of Apple's business — sales in Apple's Greater China region grew slightly in the last quarter after recent slumps. And Apple has employees and suppliers in China as well.

"We’re closely following the development of the coronavirus," Cook said. "We’re donating to groups that are working to contain the outbreak. We’re working closely with our Apple team members and partners in the affected areas. And our thoughts are with all of those affected across the region."

Beyond the human cost, Apple has another reason to keep an eye on developments in China. That's where the bulk of its products are assembled, and a severe outbreak could impact Apple's supply chain. Amid reports that the coronavirus outbreak could have an impact on tech companies in general and Apple in particular, Cook did say Apple was monitoring the situation, though he didn't mention specific products.

"We do have some suppliers in the Wuhan area,. All of these suppliers, there are alternate sources, and we’re obviously working on mitigation plans to make up any expected production loss."

— Tim Cook, Apple

"We do have some suppliers in the Wuhan area," Cook said. "All of these suppliers, there are alternate sources, and we’re obviously working on mitigation plans to make up any expected production loss."

The impact of the coronavirus outbreak is less clear on Apple's supply chain outside of Wuhan. "The reopening of those factories after Chinese New Year has been moved from the end of this month to Feb. 10, depending upon the supplier location," Cooks said.

As for Apple's retail outlets in China, the company has closed one of its retail stores and taking precautions in others including "frequently deep cleaning our stores as well as conducting temperature checks for employees."

Apple tried to account for the potential impact of the coronavirus on its efforts in China and beyond when giving its quarterly sales forecast for the March quarter. Apple expects revenue to range between $63 billion and $67 billion when its fiscal second quarter ends in March — that's a much wider range than the company normally provides Wall Street.

5G iPhones

Apple's quarterly phone calls with Wall Street analysts are marked by analysts trying to get Apple to tip its hand about future products — Apple famously doesn't comment on rumors — and Cook and company remaining mum. That happened during today's call, with the 5G iPhones expected this fall as the subject of this latest Q-and-not-quite-A.

(Image credit: Shutterstock)

Will a 5G iPhone help drive demand, one analyst wanted to know. Cook wasn't biting. "I think we’re in the early innings of [5G's] deployment on a global basis," he said. "We obviously couldn’t be prouder of our line-up and are very excited about our pipeline as well and wouldn’t trade our position for anybody."

What about the cost of 5G phones, another analyst wondered — will they be more expensive? Again, Cook demurred on anything iPhone-related. "I wouldn’t want to comment on the price of handsets that aren’t announced," Cook said.

Apple TV Plus

Cook was much more eager to talk about Apple TV Plus, the streaming service that launched in November with a modest slate of original programs. Apple TV Plus costs $4.99 a month, though you get a year for free when you buy Apple hardware like the Mac, iPhone or iPad. 

(Image credit: Apple TV+)

The service is off to "a rousing start," said Cook, citing nominations and awards for The Morning Show in particular. "We continue to focus on telling stories that matter, like Little America, which recently premiered to widespread critical acclaim, with much more great content still to come," he said.

Apple plans to measure the success of Apple TV Plus by the number of subscribers, Cook aded, which is why it priced the service at $4.99 a month and bundled it with the purchase of new Apple products. "And so we’re very focused on subscribers," he said. "That said, the product itself is about storytelling. And we think if we do that well, then we’ll find that there will be some number of those that will also be critically acclaimed."

One analyst asked Cook whether it was possible to drive targeted advertising to Apple TV subscribers if it could be done without compromising privacy. "I think it is possible to have advertising in a straightforward manner that doesn’t encroach on people’s privacy," Cook said. "I wouldn’t want to conjecture about us in that business. I think for the TV Plus business, we feel strongly that what that customer wants is an ad free product. That’s not our aversion to ads, it’s what we what we believed in the customer wants."