Wrap up: Apple CEO Tim Cook's Goldman Sachs Conference keynote
Apple CEO Tim Cook was invited to be the keynote speaker at the Goldman Sachs Internet and Technology Conference on Tuesday, where the executive addressed a number of wide-ranging topics including the future of the iPhone, the iPad's place in the tablet market, the Greenlight Capital suit and the direction his company will take moving forward.
Apple making moves to lower product cost
One of more interesting questions Cook answered at the conference was in regard to Apple's product pricing, which has traditionally been based on a premium model representative of the quality devices the company produces.
Specifically, Cook was asked how the company plans to create a great iPhone user experience for customers who can't afford to purchase any of the current models.
"This is a popular question. [?] We wouldn't do anything we wouldn't consider a great product," he said. "There are other companies that do that, and that's just not who we are."
Cook went on to say that introducing a "budget device" was not something Apple would be comfortable with, and instead pointed to the strategy seen with the iPhone lineup. In that model, new variants like the iPhone 5 are sold at the highest price while preceding versions like the iPhone 4S and iPhone 4 are sold at discounted rates.
"We are making moves to make things more affordable," he said. "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."
Apple buying small companies every other month
While Apple has made some notable purchases in the past, such as its acquisition of PA Semiconductor in 2008 and more recently fingerprint security firm AuthenTec, Cook noted that most are smaller firms with potential. The executive did say, however, that Apple would not be opposed to purchase a larger, more established firm if it was thought to be a good fit.
"We have looked at large companies," Cook said. "In each case, it didn't pass our test. Will we look at more? I think so. But we're disciplined and thoughtful, and we don't feel a pressure to go out and acquire revenue. We want to make great products. If a large company could help us, then that would be of interest. But, again: Deliberate, thoughtful is our mantra."
Next-gen iPhone not likely to have an OLED display, but larger screen may be a possibility
Rumors that Apple is secretly working toward the release of a larger-screened iPhone model have persisted for months, but as usual the company has been tight-lipped about the purported project.
While not conclusive evidence that there will indeed be a "phablet" iPhone, Cook did change his tune somewhat in the conference on Tuesday.
"I don't want to say what we will do or won't do," Cook said, referring to the screen sizes of future iPhones. In the past, the executive has been more cagey in his comments regarding such a device.
He went on to say that instead of focusing on hardware specs, Apple has concentrated its efforts on the iOS experience.
Greenlight Capital lawsuit a 'silly sideshow'
The first question Cook fielded at the conference was in regard to Apple's immense cash hoard, as well as a lawsuit asserted by shareholder David Einhorn's Greenlight Capital over the company's proposal that would allegedly restrict preferred stock handouts.
The proposal, referred to as "Prop 2," would take away the Apple board's power of meting out preferred stock and place it in the hands of shareholders.
"We thought we should eliminate a blank check preferred from Apple's charter," Cook said.
If Prop 2 passes at the shareholder meeting scheduled to take place at the end of February, and if Apple subsequently decided to issue preferred stock as part of its cash distribution plan, it would simply need its shareholders to vote on the matter.
"I find it bizarre we find ourselves being sued for doing something that's good for shareholders," Cook said of the lawsuit. "It's a silly sideshow, honestly."
Tablet sector is "mother of all markets," Mac cannibalization not a concern
According to Cook, the iPad is "the poster child of the post-PC revolution" and has driving the push to tablets since its introduction in 2010.
While Apple's tablet has been the downfall for a number of PC alternatives, such as netbooks, the device is also said to be hurting the company's own Mac computer sales. During the last quarter of 2012, Mac sales dropped 22 percent year-to-year on low demand and supply constraints. Apple's iPad business, however, grew by nearly 50 percent over the same period.
"The cannibalization question raises its head a lot," Cook said. "The truth is: we don't really think about it that much. Our basic belief is: if we don't cannibalize, someone else will. In the case of iPad particularly, I would argue that the Windows PC market is huge and there's a lot more there to cannibalize than there is of Mac, or of iPad."
Cook noted that burgeoning markets like China and Brazil will be major players in future growth, and the company is banking on its ability to draw customers in to the Apple ecosystem with "halo products."
"Through the years, we've found a very clear correlation between people getting in and buying their first Apple product and some percentage of them buying other Apple products."
For complete coverage of Cook's keynote at the Goldman Sachs Internet and Technology Conference, visit the links above and AppleInsider's topic page for "Tim Cook."
Apple making moves to lower product cost
One of more interesting questions Cook answered at the conference was in regard to Apple's product pricing, which has traditionally been based on a premium model representative of the quality devices the company produces.
Specifically, Cook was asked how the company plans to create a great iPhone user experience for customers who can't afford to purchase any of the current models.
"This is a popular question. [?] We wouldn't do anything we wouldn't consider a great product," he said. "There are other companies that do that, and that's just not who we are."
Cook went on to say that introducing a "budget device" was not something Apple would be comfortable with, and instead pointed to the strategy seen with the iPhone lineup. In that model, new variants like the iPhone 5 are sold at the highest price while preceding versions like the iPhone 4S and iPhone 4 are sold at discounted rates.
"We are making moves to make things more affordable," he said. "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."
Apple buying small companies every other month
While Apple has made some notable purchases in the past, such as its acquisition of PA Semiconductor in 2008 and more recently fingerprint security firm AuthenTec, Cook noted that most are smaller firms with potential. The executive did say, however, that Apple would not be opposed to purchase a larger, more established firm if it was thought to be a good fit.
"We have looked at large companies," Cook said. "In each case, it didn't pass our test. Will we look at more? I think so. But we're disciplined and thoughtful, and we don't feel a pressure to go out and acquire revenue. We want to make great products. If a large company could help us, then that would be of interest. But, again: Deliberate, thoughtful is our mantra."
Next-gen iPhone not likely to have an OLED display, but larger screen may be a possibility
Rumors that Apple is secretly working toward the release of a larger-screened iPhone model have persisted for months, but as usual the company has been tight-lipped about the purported project.
While not conclusive evidence that there will indeed be a "phablet" iPhone, Cook did change his tune somewhat in the conference on Tuesday.
"I don't want to say what we will do or won't do," Cook said, referring to the screen sizes of future iPhones. In the past, the executive has been more cagey in his comments regarding such a device.
He went on to say that instead of focusing on hardware specs, Apple has concentrated its efforts on the iOS experience.
Greenlight Capital lawsuit a 'silly sideshow'
The first question Cook fielded at the conference was in regard to Apple's immense cash hoard, as well as a lawsuit asserted by shareholder David Einhorn's Greenlight Capital over the company's proposal that would allegedly restrict preferred stock handouts.
The proposal, referred to as "Prop 2," would take away the Apple board's power of meting out preferred stock and place it in the hands of shareholders.
"We thought we should eliminate a blank check preferred from Apple's charter," Cook said.
If Prop 2 passes at the shareholder meeting scheduled to take place at the end of February, and if Apple subsequently decided to issue preferred stock as part of its cash distribution plan, it would simply need its shareholders to vote on the matter.
"I find it bizarre we find ourselves being sued for doing something that's good for shareholders," Cook said of the lawsuit. "It's a silly sideshow, honestly."
Tablet sector is "mother of all markets," Mac cannibalization not a concern
According to Cook, the iPad is "the poster child of the post-PC revolution" and has driving the push to tablets since its introduction in 2010.
While Apple's tablet has been the downfall for a number of PC alternatives, such as netbooks, the device is also said to be hurting the company's own Mac computer sales. During the last quarter of 2012, Mac sales dropped 22 percent year-to-year on low demand and supply constraints. Apple's iPad business, however, grew by nearly 50 percent over the same period.
"The cannibalization question raises its head a lot," Cook said. "The truth is: we don't really think about it that much. Our basic belief is: if we don't cannibalize, someone else will. In the case of iPad particularly, I would argue that the Windows PC market is huge and there's a lot more there to cannibalize than there is of Mac, or of iPad."
Cook noted that burgeoning markets like China and Brazil will be major players in future growth, and the company is banking on its ability to draw customers in to the Apple ecosystem with "halo products."
"Through the years, we've found a very clear correlation between people getting in and buying their first Apple product and some percentage of them buying other Apple products."
For complete coverage of Cook's keynote at the Goldman Sachs Internet and Technology Conference, visit the links above and AppleInsider's topic page for "Tim Cook."
Comments
Couldn't agree more, it really is a ridiculous lawsuit. I understand GC's motive, but I disagree with them. And if they were my proxy shareholder, I'd be opposed by their lawsuit.
Quote:
Originally Posted by jmgregory1
I'm with Tim on the belief that devices like the iPhone and iPad are more likely to drive additional growth in laptops and iMacs than cannibalize sales.
I don't think that was the opinion he offered. He admits tablets are stealing some Mac sales.
Cook: ‘If you look at when we came out with the iPad, what did people worry about? They worried, ‘Oh my god, you’re going to kill the Mac.. . . The cannibalization question raises its head a lot. The truth is: we don’t really think about it that much. Our basic belief is: if we don’t cannibalize, someone else will."
He went on to say that since Windows machines have a much larger base it's those that have more to lose from post-PC tablet cannibalizing than the smaller Mac market share. That's true.
He must have said, "of Mac, or of iPod." iPad cannibalizes Mac and iPod, but not iPad.
Quote:
Originally Posted by jmgregory1
I'm with Tim on the belief that devices like the iPhone and iPad are more likely to drive additional growth in laptops and iMacs than cannibalize sales. Once you realize the benefits of a connected Apple system, going from iPad to iMac to Apple TV to MacBook is seamless and the natural thing to do. It rarely is about reducing the number of devices because each device has a specific differentiated use.
Yep, I agree. Tim/Apple are on the right track!
I know it's anecdotal, but my 28 year old MD daughter and all her MD friends (all in their 30's or early 40's) have an iPhone 5, an iPad, a MBP and an ATV. When I talk to them, I don't even think they think about the Apple "eco-system." They just like how everything just works together!
As far as gear, (in a perfect world), I would have a new iMac 27" with Fusion Drive, an 11" MBA, an iPad Mini, an iP5, a TimeCapsule and an ATV. (And a Mclaren MP4-12c droptop!) I know where Apple is going, but for the meantime, I still feel, the iMac is my "digital hub."
I currently have or have had, older iterations of the above items.
I sold my original intel MB, original ATV, 2nd gen. iPad all with the good intentions of replacing them with the new and improved versions. Then the recession kicked me in the n*ts!
Left with an iP4s, an original 20" intel iMac (stuck with SL) and an Airport Express. Grrrr!
Next purchase will be the iPad Mini, iP5s/iP6 and hopefully an 11" MBA.
I've said it before, I will not buy any electronic equipment that is not made by Apple. I would love a DSLR and have been told Canon make the best Apple-like UI interface of all the DSLR's but I still find it clunky compared with Apple. Same with TV's/Cable boxes, ugh!
Software? I dislike Google, MS, Adobe...Obviously, I like most of the Apps I have for my iPhone. And BTW, I like Apple Maps!
Best!
Keep your mind in the vertical motion, always looking up!
Quote:
Originally Posted by PhilBoogie
Keep your mind in the vertical motion, always looking up!
Thanks, Phil! That was really nice and encouraging!
Best!
I thought the story would be, "Breaking News: Tim Cook Is On Prozac!"
No wonder people don't get Apple. The company is way ahead of their ability to understand.
http://events.apple.com.edgesuite.net/13qpijbvpiqefjbgewrifhbvefqpihbdfv2/event/index.html#
If I tick on Reader there's a link to the video, in HD. Which I can't see. Hope to be home soon so I can watch it from my Mac. Possibly on the big screen through AppleTV.
Thanks for the link!
Y'know, what's interesting about Tim Cook is his mastery of the details of the business, his "spreadsheet mind," combined with his constant deference to the product and the customer, which depends on a gestalt function of the artist's mind. I think he gets what Apple is about more fully and maturely, let's say, than we had any right to expect from the supply chain and operations "genius." They're in it for the distant future.
It seem to me that being motivated is a more important traits for success than simply having aptitude. I know people that run successful businesses that don't seem to be very bright and others who are that would rather play video games all night and sleep all day. Sometimes I wonder if there are too many distractions in the modern world to pull our focus. I am, unfortunately, highly interested in too many fields. I have and do study them extensively but I wish I would have had a single laser focus on just one for my life so instead of being good in multiple fields I could be the leader of one field, perhaps even changing the world instead of being just a cog in the machine.
We're in a new Renaissance, and we need new Renaissance men and women. Unfocused generalists bent on creating the best mental products for people to enhance their lives. (Where would this idea come from? See next paragraph.) Specialists have to connect and interconnect with the ecosystems that surround their specialties, and not be specialists any more.
Apple has broken the ice in concretely founding and outlining this new Renaissance with their corporate model, which is neither vertically nor horizontally integrated, but three and then four-dimensionally organized. In this interview, Tim talks about Apple not being a hardware company, and not just vertically organized with technology and software, etc., but being a multi-aspect entity with hardware, software and services as the main divisions, but with the stores providing a customer community interface, where they can continue the relationship with their customers beyond the sale of a product, and with the engineering people reaching back into the supply chain to design the circuitry and materials.
This is only a sketch of the new kind of nonfocused but holistic thinking that's on the way in, while the specialist gapes from the sidelines, wondering what the secret Apple sauce is. It's why I find the Apple story so interesting, and this Tim Cook interview so interesting. We're watching the beginning of a new era. You can tell he's done a lot of thinking about the company's mission recently.
Our job, if we have one, is to find parallel concrete applications of this kind of thinking, so it brings an end to the stupidity and mediocrity that's been the norm since the dawn of the previous age of industrial specialism, which was accelerated and then cemented into place by the printed book. Electronic information is what gives us our omnivision. We just have to figure out how to use it.
1) You're 71yo? Rock on! Are you older than Mr. Applebaum?
2) I love the term omniholistic.
3) I disagree with the idea that we can know all part of something or that we need to. Let's take Apple. Imagine if Tim Cook was their web designer, HW designer, Apple ARM processor engineer, iOS developer, and their patent lawyer, as well as their CEO. It just won't work. Even looking at web design or HW design there are so many different masteries. HTML, CSS, JS, and graphic design are just the ones I know about web development off the top of my head. We need specialists. Think of all branches of medicine and how it was evolved into doctors who continuing train for a more specialized field. What I think is more important than everyone having the same skill set is better communication. With better communication we can pass on relevant data to others in a more efficient manner so that that organism, wthether it's a company, culture or humanity itself, can function more effectively.
Originally Posted by SolipsismX
3) I disagree with the idea that we can know all part of something or that we need to. Let's take Apple. Imagine if Tim Cook was their web designer, HW designer, Apple ARM processor engineer, iOS developer, and their patent lawyer, as well as their CEO. It just won't work. Even looking at web design or HW design there are so many different masteries. HTML, CSS, JS, and graphic design are just the ones I know about web development off the top of my head. We need specialists. Think of all branches of medicine and how it was evolved into doctors who continuing train for a more specialized field.
A professor of mine had a saying,
A generalist is someone who knows nothing about everything. A specialist is someone who knows everything about nothing.
A company (any group) needs both of them. The generalist sees the connections between fields that no one else would. The specialist figures out how to build the result of that connection into a single product.
I think he's a few years ahead of me, but he plays around more, so in effect he's younger than me.
I should have said that specialists can't be just specialists any more. As you and TS say, it's about communicating, maybe via generalists, among specialties and specialists. Which our time is suited for more than any preceding.
I was cheerleading for us semi-serious collectors of specialties, promoting the eventual grand synthesis that will come from it all. We're on the cusp, I keep telling myself. The wave will break and we'll arrive at the beach after a nice long ride. There's a great article by Adam Gopnik in the new New Yorker about Galileo and his time that i'm in the middle of reading. For that Renaissance, they were riding on the "discoveries" of printing, the postal system, perspective drawing, etc.
That would have been an amazing time to live — assuming you had survived that plaque that preceded it