Ever wondered how much a few words from a CEO could cost a company? Well, wonder no more! Tim Cook’s slip of the tongue back in 2018 ended up ringing in at a whopping $490 million (it’s equal to 612,015 iPhone 15 units at $799 each in the USA) for tech titan Apple. This means that Tim Cook’s comments threw away the revenue of thousands of iPhone 15s.
But what exactly did he say? And how did it end up burning such a huge hole in Apple’s pocket?
Here are Tim Cook’s comments that cost $490 million
Tim Cook’s comments during a big meeting in 2018 led to Apple paying a whopping $490 million as part of a settlement. During the November 1, 2018 earnings call, Apple CEO Tim Cook made several statements regarding the company’s performance, particularly in China:
- Cook mentioned that Apple was facing challenges in markets like Brazil, India, Russia, and Turkey but explicitly stated, “I would not put China in that category.”
- He emphasized that business in China was “very strong” during the previous quarter and noted a growth of 16% in that market.
- Cook specifically highlighted the strength of iPhone sales in China, describing them as “very strong, very strong double-digit growth there.”
These comments from Cook were significant because they portrayed a positive picture of Apple’s performance in China, which later became a focal point of the class-action lawsuit filed by shareholders.
Here is why: He said things that made it seem like Apple was doing really well in China, even though things weren’t going so great in other places. Soon after, news came out that Apple was actually slowing down how much stuff they were making, and then they said they wouldn’t be making as much money as they thought because sales in China weren’t as good as they had said. Shareholders got upset because they felt like they were misled, and they ended up losing money when the truth came out.
This settlement is a reminder that companies need to be honest with their investors. Even though Apple says they didn’t do anything wrong, they decided to pay up to avoid a long legal fight. It’s a lesson for everyone that being open and truthful is really important in business.
Featured image credit: Eray Eliaçık/Bing
