Tim Cook

Apple CEO Tim Cook leads the most powerful technology company on the planet. But even as the top dog in tech (with a market value of $475 billion, which is bigger than Microsoft and Google combined) Cook says that he relishes competition.

“As long as people invent their own stuff, I love competition,” said Cook, speaking today at the Goldman Sachs Technology and Internet conference in San Francisco.

Cook started his remarks by answering a question about worker conditions in China before moving on to discuss the growth of the tablet market; the possibility of a stock dividend and the leadership qualities he brings to Apple.

But some of the most entertaining remarks had to do with competition in the tablet arena, specifically directed at Amazon.com and Microsoft.

Here’s what Cook had to say about the rise of the tablet market and the desire of developers to put their energy into iOS versus desktop PC applications:

“Many of us thought at Apple that the tablet market would become larger than the PC market. And it was just a matter of the time that it took for that to occur. And I feel that stronger today than I did then. Because, as I look out and I see all of these incredible uses for it and I see the incredible rate and pace innovation in the developers.

If we had a meeting today in this hotel and we invited everybody that was working on the coolest PC apps to come to the meeting, you might not find anyone in the meeting. (Crowd laughs). But, if you did that same thing for iOS or that other operating system … you couldn’t get everybody in this hotel. You’d have someone covering every square inch here.

And so that’s where the innovation is. That does not mean that the PC is going to die. I love the Mac and the Mac is still growing, and I think it can still grow. But I solidly believe that the tablet market will surpass the unit sales of the PC market, and it is just a matter of the rate and speed and time that that happens. It is too much of a profound change in things, not to, I’d say. Anyway, that’s my opinion, and people can always disagree. I feel strongly about it if you can’t tell.”

Later in his remarks, Cook addressed whether the growth of the iPad (which topped sales of 15.4 million last quarter) was cannibalizing Mac and desktop PC sales.

“I think that iPad has cannibalized some Mac sales. And the way that we always view cannibalization is that we’d prefer to do it — than have someone else do it. And so we never want to hold back one of our teams from building the absolute greatest thing, even if it takes some sales from another product area. Our high-order bit is: We want to please customers. We’d like them to be buying Apple stuff. I don’t predict the demise of the PC industry. I don’t subscribe to that. I do believe, given what we’ve seen, that iPad is cannibalizing some Mac and cannibalizing more Windows PCs. There’s many more of them to cannibalize than Macs, and that’s a plus for us. And I think tablets, in general, will cannibalize PCs.”

And here’s what Cook had to say about competing with Amazon.com and its new $199 Kindle Fire:

“Price is rarely the most important thing. A cheap product might sell some units … and (consumers) feel great when they pay from their wallets. And then they get it home and use it and the joy is gone. And the joy is gone every day that they use it, and they end up not using it anymore. And you don’t keep remembering: ‘Oh, I got a good deal.’ Because you hate it. (Crowd laughs).

What happened last year, everybody … decided that they had to do a tablet. By some estimates, there were 100 tablets on the market last year. And everybody was kind of aiming at iPad 1 and we were trying to innovate quickly and get to iPad 2, and so by the time they thought they had something to compete with iPad 1 we were on iPad 2. And we ended up with 170,000 apps, and I am not sure there are 100 yet on the other platforms.

I think people at the end of the day, they want a great product. And so on Amazon: Amazon is a different kind of competitor. They have different strengths and so forth. And I think they will sell a lot of of units. I think they have, and they will. But the customers that we are designing our products for are not going to be satisfied with a limited function kind of product. And I think the real catalyst to the tablet market will be innovation and pushing the next frontier. So, honestly, we will compete with everybody.”

Cook also addressed questions about the company’s cash pile of $98 billion, noting that the board is seriously considering various options on how to deploy the capital. “I am not religious about holding it, or not holding it,” said Cook.

But he did add that Apple will not curtail its frugal ways in which it treats cash “like it is our last penny.”

“We are not going to throw a toga party here,” he said.

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  • florean

    Where does he take a crack at Microsoft?  He never mentions them and he says “Windows PC” once in your excerpts.  I think maybe you’re confused about what he meant when he said “iOS or that other operating system.”  He is referring to Android.  Microsoft isn’t even worth mentioning in the phone and tablet space.

    • johnhcook

      Don’t you think this comment from Cook is a crack on Microsoft by pointing out the lack of cool Windows-based consumer apps?

      “If we had a meeting today in this hotel and we invited everybody that was working on the coolest PC apps to come to the meeting, you might not find anyone in the meeting. (Crowd laughs).”

      • florean

        Oh, I guess.  I just thought he was stating the obvious.  :)

  • Guest

    I’m not sure who this “Tim Cook” is, but I don’t like that he’s running Apple. He’s a numbers guy. Steve Jobs had a vision. Tim just has a calculator.

    Enough of this Tim. Install Sir Jony Ive at the helm and start designing new products. Beyond Apple TV 3.0 (third time’s the charm), I don’t know what Tim could come up with.

  • Guest

    Seems pretty accurate to me. Tablets probably will outsell PCs in the not too distant future. Gates predicted it would take 5 years back in the early 2K’s. That turned out to be a premature start, but now that Apple has made the products mainstream five years seems like a reasonable period for it to occur. And Apple does now own developer mind share whereas PC-developer interest is mostly dead. Yet another lead that MS lost during Ballmer’s watch.

    OTOH there is a level of smugness and arrogance at Apple that one day will lead to problems. But for now they have nothing to worry about, least of all from MS.

  • Guest

    “I love our strategy. The board loves our strategy”

    – Steve Ballmer

    “But even as the top dog in tech (with a market value of $475 billion, which is bigger than Microsoft and Google combined) Cook says that he relishes competition.”

    • Guest

      Tim Cook and Steve Ballmer, very different of course.

      One’s a milquetoast accountant thrust against his will into the role of a CEO despite not having an innovative bone in his body. The other is Steve Ballmer.

      • Guest

        True, Tim hasn’t yet proved he’s a failed CEO, unlike Steve.

      • Guest

        Tim is a lot more than an accountant. He’s an operations genius and has a strong sense for what makes Apple unique. More importantly he was Jobs hand-picked choice for CEO. Steve was Bill’s too, but with Ballmer we have the benefit of thirteen years of subsequent performance in role. While revenue and profit have grown over that period, it hasn’t been a very successful run when viewed in the aggregate. MS is worth half what it was when he took over. It’s growth has gone from 70% to single digits. Its dominance of the industry is gone. It’s share of overall industry revenue and profit pie has fallen dramatically. Windows sales are now in decline as well and have been for four consecutive quarters. And the company’s reputation has taken a enormous hit.  Maybe ten years from now we’ll be saying the same thing about Apple. But until then Tim at least deserves the benefit of the doubt.

  • Tom Demerio

    I always find it somewhat humorous when  new tech ( apple) executives gloat how their products are the future and everything and everyone else are irrelevant.

    I think this posture is a function of their fear that they are really just a passing fad and their success will fade by fickle fashion.

    Global IT spend is over $3.5 trillion. I work for a $4.5 billion, purpose built software  firm that uses the Windows platform.  We can run our solution on a phone or a tablet if you prefer the eye strain, most don’t.

    Sorry Tim, maybe a room full of college grade iOS hacks is your definition of the future, but the reality is different with over 900 million Windows clients in use worldwide.

    But hey, Apple is cool and all the cool devs know it. So party on…if you can sqeeze in the room.

    Will we ever see a software company that builds a billion dollar business on iOS with Apple taking a $30% cut ? No one is un-cool enough to ask Tim that question.

    • Guest

      And I find it humorous that after more than a decade of successes, each larger and more profitable than the previous one, people still argue that Apple is a flash in the pan or passing fad. They aren’t. Apple has simply out-thought, out-hustled, out-executed, and out-marketed everyone else, particularly MS. Sure, it’ll end at some point. But they’re so well positioned now and have clear line of sight to so much additional growth in the years ahead that Tim would have to screw up for a decade before Apple will face another existential crisis. Much like MS after a decade of Ballmer.

      • Mia Peterson

        Apple has not built a computing platform. Software runs hospitals, factories, armies, power plants, and banks. Don’t know what you call a “decade of successes?”
        The line-of-sight is that they are a cell phone company after their success as a music player company.
        Sure, Apply may ship a billion cell phones with millions of apps for 99 cents. And they will put iOS on an Apple branded TV.
        That is not computing, it’s client visualization.
        The problem for Tim is that the wireless carriers are subsidizing Apple on the front end and slave labor is subsidizing Apple on the back end. 
        Business history informs that this is not sustainable.
        Market rebalance can be brutal to incumbents in a skewed market.
        My sense is Apple will fall fast and hard in the not too distant future.
        Tim Cook will only be remembered as the guy that could never take Apple past being a cell phone company.

        • Guest

          What do you think iOS is? They succeeded where MS failed, namely to return developer focus from the web to client server. Every major business right now is re-architecting their “computing platform” to support those “visualization devices”. iPads are pouring into the corporate world. People are now talking about the “consumerization of IT”, and the principal company that has driven that is Apple. And they’ve done all that without focusing on the enterprise at all. Indeed under Jobs they specifically avoided it. What happens when they decide to prioritize it?

          Don’t know what I mean by a “decade of successes”. Take a look at their revenue and profit growth over that period and then compare it to MS.

      • Jim Forlatt

        (soon?) the carriers and the slaves will revolt. Tim will find himself in a
        very tenuous position. I sold my Apple stock this week. With Steve gone, I will
        never be a buyer again after the NYTimes’ article on slave labor.

        • Guest

          Jobs is the guy who built the franchise on slave labor. What’s your point? You apparently didn’t have a problem with it before since you owned the stock.

          If Chinese slave labor revolts, Apple will simply move manufacturing to the next slave market. There’ll always be another one, just as there always has been. And carriers revolt? LOL. There’s too much end-user demand for carriers to revolt. And iPad is quickly rising in terms of where their revenue is coming from. So by the time iPhone experiences any problems iPad sales may well be able to take up any slack and then some. And then there’s whatever they do on the TV side and the product after that.

  • Guest

    An appropriate quote about Apple that I read today:

    “This stock is now much larger than Exxon Mobil Corporation (NYSE: XOM)
    and about its only care about Microsoft Corporation (NASDAQ: MSFT) is
    now just remembering that there is supposed to be a rivalry.”

    How times have changed.

  • Anonymous

    I’ll give it 3 years before the Apple bubble bursts, their model is unsustainable. They are so big now they are moving from innovating to protectionism, just like any other company in the past. Its very evident from their adverts. Before it used to be about look how cool the iPhone does this and that. Now its more of you can do this only if you have an iPhone.

    It also scares me 80% of their business is dependent on iOS. Apple have tried to diversify and failed. The consumer is a fickle bunch, the only good thing going for apple vs andorid is the ‘lock-in’ to the eco system, but hey with 0.99 cents a pop who cares..people can switch easily. Apple will peak this year and they have some good products like the iPad3. But there is tough competition from Android ICS and Windows 8. There is so much pent up demand for Windows 8 tablets it will be massive. Apple iTV if ever released will not be a success, people don’t buy a new TV every year and content owners have learned their lessons with Apple.

    Mobile will continue to outpace the desktop PC for a simple reason, desktop PC is a shared device while a mobile is personal. So a family of four may have one desktop PC but four or more mobile devices, nothing earth shattering here. Apple will peak this year but will start to slide in 2013. They will still be a major player in the consumer space but will not be so dominant. I expect this to equalise between Apple, Microsoft and Google.

    • Guest

      And how many years have you been wrongly predicting that so far?

  • Orin

    I used to think Microsoft would become IBM (some will say it already has). But lately, I’ve been thinking Microsoft is going to be Kodak. Apple (and to a lesser extent, Google) is leaving Microsoft further and further behind…

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