Cook Tackles Five Hot Questions Facing Apple5:00 PM EST Tue. Feb. 12, 2013
Apple CEO Tim Cook fielded questions Tuesday at the 2013 Goldman Sachs Technology and Internet Conference, and the big topic of discussion was Apple's mammoth cash reserves -- $137 billion and counting, $45 billion of which is expected to be given back to shareholders. Cook said some of that money will be used on acquisitions, but he didn't specify what kind – or size – he'll be looking at. So what did Cook have to say about other topics, like a rumored discount iPhone, Apple products' technical specs and the future of the tablet market? Check out some of his answers.
Regarding Apple's massive cash reserves, Cook said the company isn't hoarding money with a "depression-era mentality" and instead is investing billions in capital expenditures, specifically expanding its retail presence with new Apple Stores around the world, pouring more into research and development and making supply chain investments. "Apple makes bold and ambitious bets on products, and we're conservative financially," Cook said.
Cook was asked about Apple products' technical specifications, which sometimes pale in comparison with competing products (for example, the iPad has traditionally had less RAM than other tablets). Cook dismissed the notion that the faster processors or highest megapixel cameras instantly translate to the best user experience. Customers, he said, just want a great experience and quality. "They want that 'a-ha' moment," Cook said. Other companies, meanwhile, obsess about technical specs and market their products based on those metrics because "they can't have a great experience," Cook said.
Cook was asked about the possibility of a cheaper iPhone -- again -- and he neither dismissed nor embraced the idea. But he did say that Apple is looking at lower price points for some products and noted the significant price reductions for the iPhone 4 and iPhone 4S following the iPhone 5's launch.
"We are making moves to make things more affordable," Cook said.
However, Cook explained, his objective isn't to take an existing product and simply lower the price. He cited as an example the original iPod, which cost $399 at launch, but today an iPod Shuffle costs just $49. "Instead of saying, 'How can we cheapen this iPod to get it lower,' we said, 'How can we do a great product?' And we were able to do that," Cook said.
Cook said he believes the tablet market "will be huge" going forward, and tablets will continue to be a big opportunity for Apple in the future. Cook compared the success of the iPad to the decline of PC sales; he pointed out that Apple sold 23 million iPads last quarter compared to just 15 million PCs sold for HP, the world's biggest PC manufacturer.
"There's been a sea change," Cook said.
Apple's chief executive also noted that the iPad is thriving in the commercial market, being used in "virtually every Fortune 500 company." And lastly, Cook was bullish on the iPad Mini and dismissed notions that the 7-inch tablet would cannibalize the original iPad. "I think this is going to be the mother of all markets," he said.
"I'm most proud of our employees," said Cook. Despite Apple seeing some notable executive departures in recent years, Cook gushed about his team's creativity and dedication to creating the best products in the world. In terms of Apple employees, Cook paid special attention to a few individuals, praising Jonathan Ive, Apple's senior vice president of Industrial Design, Bob Mansfield (pictured), Apple's senior vice president of Technologies, and Jeff Williams, Apple's senior vice president of Operations, among others.