updated 06:05 pm EST, Wed February 27, 2008
Tim Cook interview
Apple COO Timothy Cook delivered a question and answer presentation at the Goldman Sachs Investment Symposium today, discussing company strategy for the Mac, iPhone, iPod and Apple TV. Saying that at the end of the day Apple is "all about people," Cook proclaimed that while innovation may be one of the most difficult models, its the one that gives you a true competitive differentiation. "We run Apple in a fluid manner, where we move people where we need them. This is why you begin to see things on the phone that were developed for the Mac. You see Cover Flow, developed for the phone, in the Mac OS X. There's some much synergy in those area."
Tim Cook was eager to point out that Apple had 24 billion in revenues in fiscal year 2007 from four major product lines. The Goldman Sachs interviewer noted Steve Jobs' has prior statement that Apple has 3 businesses and a hobby, the hobby being the Apple TV. He asked if four major product lines represent the maximum.
Cook replied by saying that the Apple TV is an interesting product. "We launched this as a peripheral to your Mac or PC, but the size of that customer base was a niche. That's why Steve calls it a hobby. The market for it isn't in the realm of the iPod, iPhone or Mac. Will we enter a new category? You can say we entered a new category with the MacBook Air and the iPod Touch. Could we do more? I think Apple can do about anything it puts its mind to. For everything we do, we know me make a choice not to do something else. We may or may not add some over time, we'll see."
Regarding slowing iPod growth: Cook says Apple's focus was the introduction of the iPod Touch -- getting it out into the market. He sees getting the "first mainstream WiFi portable platform" out as a big strategic move.
In terms of market saturation for the iPod: 40% of the iPods sold were sold to people who did not own an iPod. "That doesn't seem like a saturated market to us," said Cook. On why the US number was flat: "part of it might have been the economy."
Will there be some cannibalization from the iPod Touch and iPhone? Tim Cook says maybe. "But I'd rather Apple cannibalize itself than others take our business"
The moderator asked: Why did you cut the iPhone price? Cook said "We saw that we had an incredible product that many people wanted. The barrier to some people buying it was the price. We were about to enter the holiday season. We decided we wanted to go for it. The more people we get under the iPhone tent, the more developers we get interested in developing, the more iPhones we sell."
Regarding the "trade offs" Apple had to make for the MacBook Air, Tim Cook says that other people used really small screens or tiny keyboards to make sub-notebooks work. Apple, Cook says, put "what's important" in the MacBook Air. "Do you really need an Ethernet cable?" he said. "Do you really need the optical drive?" He said that remote disc booting, the ability to rent movies online and the proliferation of wireless have largely addressed the so-called shortcomings of the Air.