Apple’s CEO Tim Cook today took the stage at Goldman Sachs Technology and Internet Conference, speaking about the company, its products, and acquisition strategy. We highlight some of the important points he made during the conference.
Apple has steadily acquired a number of companies over the past few years ranging from ones that specialise in mapping (Placebase, Poly9) to flash memory (Anobit) to silicon chips (PA Semi). Cook says that Apple will continue to acqui-hire such teams working on small projects, and integrate them into the company’s existing workforce. He adds that Apple is open to acquiring large companies, but not just for growing revenue. As go now, no big company has really caught Apple’s eye as a potential acquisition target.
Apple’s Innovation Culture
Of late, a lot of questions have been raised by folks over Apple’s future, claiming that the company’s lost its “innovative edge.” Tim Cook believes that the culture of innovation at Apple has “never been stronger” and that it’s embedded into Apple’s DNA. Apple’s skills and investment in hardware, software and services, he says, puts the company at a much better position than its rivals, who struggle to offer an integrated experience with their devices.
Apple’s leadership has been the subject of a lot of scrutiny as iOS head Scott Forstall departed from the company, along with John Browett, former head of retail whose tenure lasted just for six months. Commenting on leadership, Cook says that Apple’s executives like Jony Ive and Bob Mansfield are “at the top of their game.” He calls Jony Ive the best designer in the world, and notes that he’s now bringing his talent to the software front as well.
I see people like Bob Mansfield, who I thin is the top silicon expert in the world. Jeff Williams, there’s nobody better in operations anywhere. I see Phil and Dan and Craig and I see all of these guys who are so focused on product and at the very top of their game, and it’s a privilege to be a part of that.”
An area where the stock market seems to be deeply concerned about Apple is the company’s future growth, and the law of large numbers. Cook says:
There’s that word limit. We don’t have that in Apple’s vocabulary. When I zoom out and look at the smartphone market in particular, what I see is a market that is projected to double in the next few years. This is a huge market. On a longer-term basis, all phones will be smartphones and there’s a lot more people in the world than 1.4 billion, and people love to upgrade their phones very regularly.
He says that out of the cumulative 500 million iOS devices sold till now, 40 percent sales have happened in the last year. The company has paid over $8 billion to app developers, up from $7 billion just last month. He adds that Apple has grown exponentially in China from having a few hundred million in revenues to $13 billion annually, and expect this figure to grow by $10 billion every year.
On being asked about the iPhone’s premium price which makes it unaffordable for the prepaid market in developing nations, Cook said:
“We wouldn’t do anything we wouldn’t consider a great product. There are other companies that do that, and that’s just not who we are.”
“We are making moves to make things more affordable. When we came out with iPod it was $399, today you can buy an iPod Shuffle for $49. Instead of saying how can we cheapen this iPod to get it lower, we said how can we do a great product, and we were able to do that. The same thing, but in a different concept in some ways.”
“We concluded we couldn’t do a great product, but what did we do
we invented iPad. Now all of the sudden we have an incredible experience and it starts at $329. Sometimes you can take the issue and you can solve it in different ways.”
On the growing sales of phones that measure more than 5”, Cook says:
“When you look at displays, some people are focused on size. There’s a few other things about the display that are important. Some people use displays, the color saturation is awful. The Retina display is twice as bright as an OLED display. I only bring these points up to say there are many attributes to the display, and what Apple does is sweat every detail. We care about all of them and we want the best display, and I think we’ve got it. I’m not gonna comment about what we’re gonna do in the future, but it’s always broader than that which can be defined by a simple number”
“The only thing we’ll never do is make a crappy product. That’s the only religion we have…we must do something great. Something bold, something ambitious. Something great for the customers, and we sweat all of the details.“
These are some of the most important points of Cook’s talk at the Goldman Sachs Tech Conference. For the entire transcript, you can head over to MacRumors or WSJ, or you can listen to his talk over at Apple’s website.