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.