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Tim Cook has never been more bullish about Apple's ability to innovate, and he sees the company continuing to produce great products that deliver a killer user experience, thanks to Apple's ability to meld hardware, software, and services into a single package. And on those days when things aren't going so well, he just takes a trip to the Apple Store, an experience he likened to taking Prozac.
Cook held forth on all things Apple during an unusual public appearance at the Goldman-Sachs Technology and Internet Conference on Tuesday morning, where he laid out an exceptionally bright picture of the company while responding to softball questions before an adoring audience. Not exactly the best place to glean any insights, but interesting nevertheless. During his hour-long chat, Cook discussed everything from the state of Apple retail, to the “Depression-era mentality” of maintaining mountains of cash to whether we'll ever see an iPhone that's actually affordable. While much of Cook’s statements were blatant cheerleading -- an attempt to buoy investor confidence in his company after its dismal stock performance following its latest earnings call -- he also let slide some telling tidbits.
Here are the five biggest takeaways from Cook’s interview, and why they matter.
This Is Tim Cook’s Apple
Perhaps the most notable thing about Cook's interview was what wasn't said. No one mentioned Steve Jobs. This is Tim Cook’s Apple now, and there’s no mistaking it.
When Cook spoke at the same event in 2012, just a few months had passed since the death of Steve Jobs, and so his role in the company and place in history was a hot topic. But Cook has been running the show for more than year now, leading one of the largest and most profitable companies in the world, while pushing its success to new heights. He is, at last, emerging from Jobs' long shadow. And he’s definitely stoked about it.
“I’ve never been more bullish about innovation at Apple,” he said at one point, a theme he'd return to twice during the interview with comments like, “I’m incredibly bullish on our retail stores” and “I’m incredibly bullish about the future,” Cook iterated at different points throughout the talk.
This comes as a bit of a contrast to the Apple CEO's typical demeanor. Cook often comes across as more reserved than his predecessor, but today Cook showed more passion, fire, and confidence than we've seen in past earnings calls or media events. This isn’t a CEO toiling under the shadow of his old boss. This is Apple’s fearless leader in his element.
It's about time. Since taking over as CEO, every move Cook, and Apple, makes has been scrutinized perhaps even more microscopically than in the past as weary investors look for any indicator of Apple's downfall. And with competitor Samsung threatening Apple's dominance in the smartphone space at every turn, he's got to prove Apple's still the market leader to the public too. Cook has to show that Apple is at the top of its game, and this sort of chutzpa is certainly a step in the right direction.
On Creating More Affordable Products
One of Apple’s continued challenges is making more affordable products without making cheaper products. The biggest example of this, and reason it needs to be done, is the iPhone, which at a baseline price of $650 is way too high for emerging markets like China, India, and Brazil. Apple wants to -- and, in fact, must -- make inroads into these regions, which is why the company is believed to be hard at work on an affordable iPhone, possibly made of plastic.
Asked about this issue, Cook reiterated Apple’s focus on developing great products, and pointed out another product line that began with a single, expensive option, and expanded to encompass models at a wide range of prices and functionalities. The iPod launched at $399, and today, you can get an iPod shuffle for a mere $49.
“Instead of saying ‘how can we cheapen this iPod to get [the price] lower, we asked, how can we do a great product?’” Cook said. So the team developed a product that could “excel at a very low price of $49, and appeal to a lot more people.”
On a similar front, critics historically asked Apple why it didn’t offer a sub- $1,000 Mac. “Frankly, we worked on this, but we concluded we couldn’t do a great product,” Cook said. What did Apple do instead? Why, invent the iPad.
For now, the iPhone 4 is offered for free on contract as the company’s budget iPhone offering. But based on Cook’s statements, and what we’ve seen from Apple in the past, it seems highly likely that Apple will eventually flesh out its iPhone lineup to encompass options at a wider range of price points, including a cheaper option.
On the Bigger Smartphone Screen Trend
For years Apple said 3.5-inches was exactly the right size for a smartphone display, providing a screen big enough to be useful without being difficult to use with one hand. Then the iPhone 5 happened. While the same width as its predecessors, it sports a longer 4-inch display. With competitors like HTC and Samsung busting out beauties with 4.5 and 5.5-inch displays, and consumers clamoring for them, it would seem Apple’s late to the party. But Cook says size isn't everything.
“The truth is, customers want a great experience and they want quality,” Cook said. “If you look at displays, some people are just focused on size. There’s a few other things about the display that are important.”
Cook specifically singled out OLED displays (a favorite technology of competitor Samsung), saying their “color saturation is awful.” This, he said, could be a problem with online shopping, where you may expect the item you're buying to be a particular color -- a color not accurately represented on the display, he claimed.
Tellingly, however, Cook did not diss the size of larger smartphones, nor did he offer any indication that Apple won't explore larger handsets. Cook called today’s smartphone market “a market that’s incredible to be in, and maybe one of the best markets of all time.” It would be unwise of the Cupertino company not to do everything in its power to make sure it has a solid space in that market.
Stores Are More Than Stores
Cook, perhaps mindful of sharing the love, name-checked a handful of executives, praised Apple's employees and, in particular, hailed the company's retail stores. Apple’s retail stores played a vital role in the debut of a new product segment like the iPad, he said, giving consumers an easy way to discover what it is and what it does.
“I don’t think the [iPad] launch would have been nearly as successful without stores that welcome people in,” Cook said.
And the store model itself has evolved over the years. Cook praised the Apple Store as a gathering place, a spot that plays an important role in a community. “I’m not even sure store is the right word anymore -- They’ve taken on a role much broader than that,” Cook said, giving a few examples as to the types of events local Apple Stores host, from an elementary school class’ field trip to performances by local musicians.
In a day and age where many have begun to turn to the convenience of online and mobile shopping, Apple’s stores continue to be wildly successful (Apple saw 370 million cumulative visitors to its retail locations last year alone).
“I don’t have many bad days,” Cook said. “But if i feel I’m dropping down, I go in a store. It’s like a Prozac or something.”
Environmental Responsibility Is a Big Priority
Cook has long been a vocal proponent of eco-responsible business and improving conditions for its factory workers, even in the wake of harsh criticism from outsiders. We've seen supporters of improved factory conditions petitioning outside Apple Stores, for example, and Green Peace pushing Apple to embrace renewable energy. Cook said the company isn't going green(er) to appease critics; it's doing so because it's the right thing to do.
“I don’t care if people lobbing grenades from the sidelines, we’re going to do what’s right and just, and move the ball forward,” Cook said. Cook isn't just blowing smoke. The company really is working to improve its effect on the environment, as well as conditions in supplier factories. But of course, it also has brilliant PR to promote its efforts, and make sure everyone knows what it's doing.
Apple is continually under scrutiny for the condition of its factory workers abroad, particularly at Foxconn, but of the major consumer electronics companies out there, it continues to be one of the few to acknowledge there is a problem, and that they’re trying to fix it. Apple publicly shares information regarding its supplier responsibility on its website.
But Apple’s supplier responsibility isn’t limited to just people, though. “I’m proud we’re doing heavy lifting for the environment,” Cook said. He pointed out a few examples of Apple’s efforts to reduce the company’s carbon footprint on the planet, including eliminating toxins from its products, building the largest private solar farm ever, and running its data centers on 100 percent renewable energy.
In the Tim Cook era, we’ll continue to see overseas factory conditions improve, and we’ll continue to see Apple push for greener manufacturing and distribution methods.
