Cook discusses bigger iPhones, Motorola sale, Android and more in interview

Posted:
in General Discussion edited March 2014
In a wide-ranging interview with The Wall Street Journal, excerpts of which were published on Friday, Apple CEO Tim Cook discussed expanding the iPhone business, Google and Android, emerging markets and innovation.

Cook
Apple CEO Tim Cook accepting the Auburn University Lifetime Achievement award.


After a report covering Apple's recent $14 billion stock repurchase and the company's entry into new product categories, The Wall Street Journal has posted an edited version of Cook's full interview to its website.

As noted on Thursday, Cook still views Apple as a "growth company" despite sentiment that Cupertino's best years have passed. The executive conceded that Apple's revenue grew at a slower rate than in past years -- $14 billion to $15 billion -- but said in comparison to other companies, the numbers are still huge.

"Yes, those percentages are smaller compared to a year earlier and two years earlier and so forth. But that doesn't mean that you're not a growth company," Cook said. "We were in hyper-growth, or whatever is above growth. We went from $65 billion to over $100 billion to $150 billion to $170 billion. These are historic, unprecedented numbers. I don't know any companies adding growth at that level."

Stock
AAPL stock performance over last 12 months.


In context, the level of growth in 2013 is "like adding three Fortune 500 companies in a year," Cook said, adding that Apple clocked in with its highest revenue ever in the last quarter. Helping push the needle was best-ever iPhone and iPad sales, as well as a strong performance from Mac in the face of a shrinking PC market.

A major driver for future growth is emerging markets and Apple worked hard to bolster its presence in the biggest of those: China. Over the last 12 months, Apple has raked in $29 billion to $30 billion in revenue in greater China.

Some of that revenue was from the iPhone's rollout on China Mobile, the world's largest wireless carrier. Even with the new deal, Apple is only addressing two-thirds of the subscribers in the world, Cook said, adding that the statistic will change as the company plans to sign on with another 50 carriers by the end of the quarter.
"And even with adding China Mobile, we still only present our products to two-thirds of the subscribers in the world. In fact, this quarter, we'll sign on 50 new carriers." - Apple CEO Tim Cook
Developing markets, of which the iPhone and iPad already enjoy a large share, remain a struggle. However, Cook pointed to Japan, which accounts for about nine percent of Apple's revenue, as a possible area of growth.

"The dollar has gotten so strong that last quarter, our revenue growth in Japan was 11 percent," he said. "At constant currency from year before, it would have been 37 percent. When you lose 26 points on a currency conversion and it's 9 percent [overall], it takes off a couple of points on the macro-side."

When pressed on iPhone growth in particular, Cook said the cellular market consists of "feature phones, smartphones that function as or are used as feature phones, and real smartphones."

"I care about the market share of the last one. I don't care how many feature phones are sold," he said. "The more that are sold I look at as good because those are all potential future customers for real smartphones. The same thing goes for the second category. I'd like to convert as many of those as possible to real smartphones."

China Mobile
Cook handing out the first China Mobile iPhones in January. | Source: Eunice Yoon via Twitter


One smartphone manufacturer in the news recently is former Google subsidiary Motorola. Less than two years after being purchased by the Internet search giant for $12.5 billion, the struggling handset maker will now be passed on to Lenovo. Google ate a huge loss by selling Motorola at the end of January for $3 billion.

"I wasn't surprised," Cook said of the sale. "It seems like a logical transaction. Google gets rid of something that's losing money, something that they're not committed to. I think it's really hard to do hardware, software and services and to link all those things together. That's what makes Apple so special."

As for a large-screen iPhone, the Apple chief was expectedly coy, saying such a product isn't out of the realm of possibility. Apple will only make the leap when the technology is ready.

"That doesn't say we'll never do it," Cook said. "We want to give our customers what's right in all respects - not just the size but in the resolution, in the clarity, in the contrast, in the reliability. There are many different parameters to measure a display and we care about all those, because we know that's the window to the software."

Finally, the WSJ asked whether Apple's role in the smartphone market will mirror the PC market, where the Mac is largely a niche player. Cook said he doesn't see that happening, noting applications were the "catalyst" in separating the Mac and Windows platforms. Mac fell far behind Microsoft's nearly ubiquitous OS, though the opposite is true in the smartphone sector where iOS and Android dominate the field.

"We have over a million apps on iOS. We have over half-million that have been optimized for iPad," he said. "That half-million compares to 1,000 for Android tablets. That's one of the reasons, although not the only reason, why the experience on Android tablets is so crappy because the app is nothing more than a stretched out smartphone app."

width=
Android platform version distribution. | Source: Google


Going further, Cook said that Windows and Android are grossly different.

"The other thing is that Windows pretty much was one thing. Android is like Europe," Cook said. "Europe was a name that somebody came up with for Americans who didn't understand that Europe was a lot of countries that weren't like U.S. states. They were very different. Android is many things. How many people who use a Kindle know that they're using Android? And you see what Samsung is doing by putting more and more software on top. I think it's night and day. The compare is so off."
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Comments

  • Reply 1 of 281
    asciiascii Posts: 5,936member
    The Europe analogy is quite clever, Android definitely doesn't have the unity that Windows had.
  • Reply 2 of 281
    Wow. Cook finally starting to come out swinging.

    More, sir, more. Show 'em.
  • Reply 3 of 281
    eriamjheriamjh Posts: 1,410member

    "That's one of the reasons, although not the only reason, why the experience on Android tablets is so crappy..."

     

    I'd love to hear him say crappy.

  • Reply 4 of 281
    aaronjaaronj Posts: 1,595member
    Quote:

    Originally Posted by ascii View Post



    The Europe analogy is quite clever, Android definitely doesn't have the unity that Windows had.

     

    Yeah, I LOVED the Europe analogy.  So sweet.

     

    I really like Tim's attitude in this interview.

  • Reply 5 of 281
    lkrupplkrupp Posts: 10,334member

    Meanwhile, Woz lets loose with some pie hole flatulence by stating that Apple should make an Android phone. Has the Woz finally jumped the shark?

  • Reply 6 of 281
    Quote:

    Originally Posted by lkrupp View Post

     

    Meanwhile, Woz lets loose with some pie hole flatulence by stating that Apple should make an Android phone. Has the Woz finally jumped the shark?


     

    Finally?

  • Reply 7 of 281
    The next move by Tim and the Board is to revoke Wozniak's $120k/yearly fake salary and put his past into the museum and move on.
  • Reply 8 of 281
    Quote:

    Originally Posted by lkrupp View Post

     

    Meanwhile, Woz lets loose with some pie hole flatulence by stating that Apple should make an Android phone. Has the Woz finally jumped the shark?


    Woz has been overrated for quite some time.

  • Reply 9 of 281
    e1618978e1618978 Posts: 6,075member
    Quote:

    Originally Posted by mackie99 View Post

     

    Woz has been overrated for quite some time.




    Woz has brain damage from an airplane crash.

  • Reply 10 of 281
    No wonder the term iSheep was created. Without Woz now you will hold a Motorola brick.
  • Reply 11 of 281

    Google has already blown by ExxonMobil in market cap and should quickly pass Apple by the middle of the year.  Apple is going nowhere fast.  Wall Street knows Apple has nothing left while Google has unlimited growth.  Apple can keep buying back all the shares it wants but it isn't going to help at all as shareholders continue to dump Apple stock every chance they get.  Apple's stock isn't going to go up and the P/E will simply keep compressing down to the 11s and the 10s as Apple becomes the equivalent of an oil company.  Apple burned too many loyal shareholders in late 2012 and they're never coming back to the company.

     

    Apple trying to go up against Android is a no win situation for Apple and shareholders because the iPhone is going to continue to miss Wall Street expectations every quarter as the industry gets entirely flooded with Android smartphones.  Google has absolutely nothing to fear from Apple unless Apple gets smart and builds its own search engine and ad business and puts it on every Apple device as the default search engine.  If Tim Cook isn't smart enough to figure this out then Apple will simply become obscured by Google's shadow.  Apple prides itself on never spending reserve cash on large acquisitions but saving all that cash isn't doing a darn thing for Apple's value or growth.

  • Reply 12 of 281
    aaronjaaronj Posts: 1,595member
    Quote:

    Originally Posted by Constable Odo View Post

     

    Google has already blown by ExxonMobil in market cap and should quickly pass Apple by the middle of the year.  Apple is going nowhere fast.  Wall Street knows Apple has nothing left while Google has unlimited growth.  Apple can keep buying back all the shares it wants but it isn't going to help at all as shareholders continue to dump Apple stock every chance they get.  Apple's stock isn't going to go up and the P/E will simply keep compressing down to the 11s and the 10s as Apple becomes the equivalent of an oil company.  Apple burned too many loyal shareholders in late 2012 and they're never coming back to the company.

     

    Apple trying to go up against Android is a no win situation for Apple and shareholders because the iPhone is going to continue to miss Wall Street expectations every quarter as the industry gets entirely flooded with Android smartphones.  Google has absolutely nothing to fear from Apple unless Apple gets smart and builds its own search engine and ad business and puts it on every Apple device as the default search engine.  If Tim Cook isn't smart enough to figure this out then Apple will simply become obscured by Google's shadow.  Apple prides itself on never spending reserve cash on large acquisitions but saving all that cash isn't doing a darn thing for Apple's value or growth.


     

    Why I ever would bother to respond to you, I have no idea.  But here goes.

     

    GOOG needs to gain about $70bn on AAPL.  Sorry, that's pretty unlikely.

     

    And GOOG did not blow by XOM.  GOOG is still behind XOM, though by only $200M.

  • Reply 13 of 281
    freerangefreerange Posts: 1,595member
    Google has already blown by ExxonMobil in market cap and should quickly pass Apple by the middle of the year.  Apple is going nowhere fast.  Wall Street knows Apple has nothing left while Google has unlimited growth.  Apple can keep buying back all the shares it wants but it isn't going to help at all as shareholders continue to dump Apple stock every chance they get.  Apple's stock isn't going to go up and the P/E will simply keep compressing down to the 11s and the 10s as Apple becomes the equivalent of an oil company.  Apple burned too many loyal shareholders in late 2012 and they're never coming back to the company.

    Apple trying to go up against Android is a no win situation for Apple and shareholders because the iPhone is going to continue to miss Wall Street expectations every quarter as the industry gets entirely flooded with Android smartphones.  Google has absolutely nothing to fear from Apple unless Apple gets smart and builds its own search engine and ad business and puts it on every Apple device as the default search engine.  If Tim Cook isn't smart enough to figure this out then Apple will simply become obscured by Google's shadow.  Apple prides itself on never spending reserve cash on large acquisitions but saving all that cash isn't doing a darn thing for Apple's value or growth.

    Wow! How wrongheaded can you possibly be? Did you even read the article? Do you even follow Apple? Their acquisitions, their new IP, THEIR INCREASING SALES AND PROFITS! Do you have any clue at all what is going on the smartphone market?
  • Reply 14 of 281
    droidftwdroidftw Posts: 1,009member
    Quote:

    Originally Posted by AppleInsider View Post



    Europe was a name that somebody came up with for Americans who didn't understand that Europe was a lot of countries that weren't like U.S. states.

     

    I doubt Tim's story of the origins of the name Europe and I doubt that Americans are as stupid as he's implying.

  • Reply 15 of 281
    aaronjaaronj Posts: 1,595member
    Quote:
    Originally Posted by DroidFTW View Post

     

     

    I doubt Tim's story of the origins of the name Europe and I doubt that Americans are as stupid as he's implying.


     

    There was a poll not many years ago, and a huge percentage (can't remember what it was, but it was really large) couldn't find Russia -- RUSSIA! -- on a world map.  Americans' lack of knowledge about the rest of the world -- heck lack of knowledge about America itself -- cannot be overestimated.

     

    Heck, when Sarah Palin was being prepped for the debates in 2008 they had to explain to her where Germany was, that they were part of the Axis in WWII, etc.  Really scary.

     

    This is from 2006, but if anything it's most likely gotten worse:

     

    Quote:

    Among the findings:


    • One-third of respondents couldn’t pinpoint Louisiana on a map and 48 percent were unable to locate Mississippi.

    • Fewer than three in 10 think it important to know the locations of countries in the news and just 14 percent believe speaking another language is a necessary skill.

    • Two-thirds didn’t know that the earthquake that killed 70,000 people in October 2005 occurred in Pakistan.

    • Six in 10 could not find Iraq on a map of the Middle East.

    • While the outsourcing of jobs to India has been a major U.S. business story, 47 percent could not find the Indian subcontinent on a map of Asia.

    • While Israeli-Palestinian strife has been in the news for the entire lives of the respondents, 75 percent were unable to locate Israel on a map of the Middle East.

    • Nearly three-quarters incorrectly named English as the most widely spoken native language.

    • Six in 10 did not know the border between North and South Korea is the most heavily fortified in the world. Thirty percent thought the most heavily fortified border was between the United States and Mexico.



     

    I mean, COME ON!  How can nearly half of Americans aged 18-24 not be able to find India?!  I mean, ooh, if it were like Montenegro or Andorra or something, even say Serbia, I could understand.  But not only is India a HUGE country, it is also very distinctive looking.  And not knowing where Louisiana is?  Give me a break.  You have to either live in your basement 24/7 doing nothing but playing Xbox or be partially retarded.

  • Reply 16 of 281
    jonljonl Posts: 210member
    Quote:

    Originally Posted by lkrupp View Post

     

    Has the Woz finally jumped the shark?




    That happened some 30+ years ago.

  • Reply 17 of 281
    jonljonl Posts: 210member
    Quote:

    Originally Posted by AaronJ View Post

     
    There was a poll not many years ago, and a huge percentage (can't remember what it was, but it was really large) couldn't find Russia -- RUSSIA! -- on a world map.  Americans' lack of knowledge about the rest of the world -- heck lack of knowledge about America itself -- cannot be overestimated.


     

    I personally believe that U.S. Americans are unable to do so because, uh, some, uh, people out there in our nation don't have maps. ;)

  • Reply 18 of 281
    aaronjaaronj Posts: 1,595member
    Quote:

    Originally Posted by jonl View Post

     

     

    I personally believe that U.S. Americans are unable to do so because, uh, some, uh, people out there in our nation don't have maps. ;)


     

    LOL :)

     

    Yeah, and like history, they don't teach anything about the rest of the world in most schools anymore.  And so many Americans lack any curiosity about anything at all outside of sports and the Kardashians.  It's really pretty scary, if you think about it, this near total lack of interest in anything.

     

    I mean, imagine someone who can't recognize Russia on a world map, cannot recognize the WORLD'S LARGEST COUNTRY!  I mean, the thing's only 6.5M sq. miles and 9 times zones across. :)  I also remember a survey of Americans during the Cold War (so obviously this was a while ago) where a MAJORITY of Americans believed that we fought *against* the Soviets in WWII.

     

    It's all very, very sad and disturbing.

  • Reply 19 of 281
    sumansuman Posts: 10member

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