Apple COO Tim Cook: iPhone is a revolutionary product; you get what you pay for

“Speaking at the Goldman Sachs Technology Investment Symposium this week, Apple’s second in command Tim Cook talked at length about the upcoming iPhone, revealing some of the methodology that went into the product’s development as well as the executive decisions that lead to the company’s partnership with Cingular,” AppleInsider reports.

The 45 minute Q&A session was recorded and made available as a streaming QuickTime download from Apple’s website. However, the portion of Mr. Cook’s speech relating to iPhone has been transcribed by AppleInsider. A snippet:

Q: Almost from the second Steve stepped off the stage at Macworld there are people in the press and other people basically coming up with reasons why Apple can’t succeed in the phone market. Can you talk a little bit about why you think Apple will be a success?

A: Well, I think the iPhone is a revolutionary product. And Steve mentioned this at Macworld. And I think this is a very, very good point. Revolutionary products only come along so often. You know, Apple had the Macintosh in 1984 that reinvented the personal computer industry. The iPod in 2001 which reinvented the whole music industry. And we think the iPhone is that class product for the cell phone industry.

Step back and look at the [iPhone] and think about what it is. It’s a very small, thin, lightweight device. It’s a revolutionary cell phone. It has visual voicemail, which if you’re not familiar with that, essentially looks like e-mail. So you can select precisely the voicemail that you want to hear, not the order they happen to come in. It’s the best iPod Apple has ever done. And it’s this really cool internet device that has desktop class email, browsing, maps and searching, all in one product. And so I think people are going to be amazed and delighted over it. So we’ll have to see. Obviously there are people who would prefer us not to be successful in this. But I think this is a revolutionary product. And we’ll see what customers think because that is the most important thing.

More in the full article here.

Connie Guglielmo reports for Bloomberg, “Apple Inc. predicted that 10 million customers will pay at least $499 to buy an iPhone next year because they realize most free mobile phones are worthless. ‘A lot of people pay zero for the cell phone. Guess why? That’s what it’s worth,’ Apple Chief Operating Officer Timothy Cook said yesterday at a conference in Las Vegas. Some wireless providers win customers by offering phones that lack the latest features free with service contracts.”

Guglielmo reports, “Up to 75 percent of U.S. iPhone buyers probably will be first-time subscribers to AT&T Inc.’s mobile-phone service, AT&T Chief Financial Officer Rick Lindner said today. The phones will only work on AT&T’s wireless network, formerly known as Cingular Wireless LLC. ‘The majority of those customers, two-thirds to three- fourths, will be coming from outside of our current wireless customer base and that’s a good thing,’ Lindner said during a speech at a Merrill Lynch & Co. conference in New York.”

Full article here.

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  1. Tim Cook is probably one of Apple’s unsung heroes.

    When you hear him at the quarterly analyst calls, you get the feeling that this is a guy who know exactly how to get things done with as much effort as is necessary and with next to no drama.

    Anyone who remembers Apple’s various supply/demand/production fiascos from the eras of Spindler and others should thank their lucky stars that Apple has Cook on board.

  2. Q: Almost from the second Steve stepped off the stage at Macworld there are people in the press and other people basically coming up with reasons why Apple can’t succeed in the phone market. Can you talk a little bit about why you think Apple will be a success?

    A: Yes, bet there is a lot more people waiting for such product, besides that, there are many companies copiying the iphone, so why will anyone pay for a copy when you can have the original? Only windows people do that.

    I will pay for it, even that I am not in the US, just to have such an incredible machine…. and eventually, it will be hacked to be use in any company any way.

  3. Yup yes, yes and yup.

    The iPhone is going to kill mostly because its not a phone first, its the first “desktop class” handheld computing device we’ve seen [first]. As long as Apple does not leave it to Cingular to actually sell and promote the product, the iPhone is going to steal the market with a beauty that will go much more than just skin deep, even thought it’s success will be attributed to its superficial qualities initially and without a doubt. I would get Apple stock before the iPhone comes out because I’m pretty sure we’re not going to see Apple share prices drop below $90 or $95 dollars again, after its released, my personal prediction is $100, but for sure $90 to $95 per share.

  4. Q: Almost from the second Steve stepped off the stage at Macworld there are people in the press and other people basically coming up with reasons why Apple can’t succeed in the phone market. Can you talk a little bit about why you think Apple will be a success?

    A: Because Rob Enderle can lick my asshole.

  5. “And we’ll see what customers think because that is the most important thing.”

    Amen, not the shareholders, Wall Street, bankers, pundits, merchants (cockney rhyming slang!) etc.

    Too many businesses forget that the number one priority is happy customers.

  6. Um, until Apple opens up the iPhone for 3rd party applications, they can pry my Treo 650 out of my cold dead hands. I’m not paying $600 for an overpriced cell phone that won’t even let me run Pocket Quicken or FileMaker Pro, let alone the 20 other 3rd-party apps I have on my Treo 650!

  7. Analysts, columnists, and bloggers can discuss the iPhone until they’re blue in the face. The fact is very few people (who are allowed to talk about the iPhone) have spent even a few minutes using the device, and ALL of them have been blown away at the device. ALL of them have said how unbeliveably cool, fast, easy-to-use and useful the features are.

    Don’t listen to anyone who hasn’t actually used an iPhone. Once people see an iPhone and have a chance to use one, they’ll want it and they’ll buy it.

    Price only matters when you’re not getting value. iPhone packs a ton of value in a fantastic package.

    Plus, because it runs on Mac OS X, it will be upgradable and new functions, apps, etc. can be added. Does anyone really believe Apple won’t have apps for sale through iTunes? Like games? Pages, Keynote and Numbers (assuming that’s the name)? Of course they will; Apple’s just not ready to announce the new Pages, Keynote and Numbers apps that will better Microsoft Office yet.

  8. “Our goal was to use GSM — our decision was to use GSM — and that’s what their network was based on.” Well, that’s a mighty low goal. Nothing like pitching old technology as “a revolutionary product” to excite the masses.

  9. lbuschjr said it well. His thoughts echo mine. ALL of us, and that includes pundits and journalists, have had scant time seeing Steve’s demo, and only a very select few have even played with the iPhone prototype (NOT the final production version) for but five minutes. Yet, the “experts” have the gall to cast judgment on a product that may not be in final form even now.

    Tim Cook was right to say what he did. And while some of you won’t be the first in line for a new iPhone (please enjoy your beloved Treo 650 with my complements), I have a hunch that Steve demoed the iPhone when he did in part to gauge market reaction. The six month lead time gives Apple an opportunity to react to the instant wish lists that have popped up (for apps like GPS receivers, etc.).

    It’s smart not to underestimate Steve Jobs and his team of very bright, talented people. But never has stopped pundits, reporters and posters here and on other sites from stepping up to make complete idiots of themselves. Maybe that’s why all the Rob Enderles of this world have their own Gulfstream jets, so smart are they. Yeah, right.

    As for me, I live in anticipation and amazement about what is to come. Remember kids, this is version 1.0 of what will be an amazing product line. The future will be a lot of fun.

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