MacDailyNews presents live notes from Apple CEO Tim Cook’s presentation at Goldman Sachs Technology and Internet Conference starting at 12:30pm PT/3:30pm ET today.
Live notes from Apple CEO Tim Cook’s presentation at Goldman Sachs Technology and Internet Conference in reverse chronological order:
• End of presentation. Paul Simon’s “Graceland” closes audio stream.
• Cook: At Apple, we always focus on the future and it is a privilege to be part of it.
• Cook: Apple is a unique company, a unique culture that you cannot replicate. I am not going to witness or permit the slow undoing of it. I believe it in so reply. Steve drilled it into us for so many years that the company should revolve around great products. We should only focus on a few products that make a significant contribution to society. Theses are the type of things, discipline, that I focus on. Apple is place where people do their life’s best work. There is no better thrill that to see people using Apple products. This is what brings a smile to my face.
• Cook: You will talk to your grandkids about these type of profound changes
• Siri: Before we used a mouse. Then Apple came out with multi-touch on Macs, then into iPhones and iPad. Siri is a profound change in user input. Ah ha, it can work! I think Siri and iCloud are profound innovations.
• Cook: Siri and iCloud are profound. 10 years ago, Steve announced the Mac as the “Digital Hub,” the center of people’s lives. iCloud turns that on its head. We all live on multiple devices now. It’s better with iCould than to use the Mac as the center hub. It makes your life easier. We now have over 100 million users of iCloud and we just launched it in october 2011. iCloud is a strategy for the next decade or more.
• Apple TV: We sold just under 3 million units last year. “If you don’t have one, you should go get one. I can’t live without it.” We call it a “hobby” so that there is no confusion that it is equal to iPhone or iPad or Mac – the 3 legs of the stool.., But, with Apple TV, we’ve always thought there was something there. We hope to find something larger. Those who have one understand. If you don’t have one, you should get one.
• Cook: We have more cash than we need to run the daily business. I only ask for patience so we can do this in a deliberate way.
• Cook: The cash was always discussed. It is being discussed more now due to the $100 billion balance.
• Cook: I am not religious about dividends. We are having very active discussions with the board on the cash on hand.
• Cook: We’ve spent billion on acquisitions, on retail, on infrastructure, on many things. But we spend our money like it’s our last penny. I think shareholders want us to do it that way. We’ve never felt rich – it may sound bizarre, but it’s true.
• There will still be a strong personal computer industry, but tablets will outstrip it in unit sales.
• Tablets in general will cannibalized PCs.
• iPad has cannibalized some Mac sales, but iPad is cannibalizing more Windows PCs. That is a plus for us.
• Cook: I love competition – as long as people invent their own stuff.
• The customer that we’re designing our product for are not join got be satisfied with limited-function products
• Cook: We have 170,000 iPad apps. I’m not sure the other platforms even have 100.
• Cook: Price is rarely the most important thing. A cheap unit may move some units. But when people get the unit home and use it, the joy is gone and every day they try to use it. “I got a good deal! Because you hate it!”
• iPad is a profound change. It will be bigger than the PC
• iOS and “that other operating system” development is the center of innovation now, not the PC
• Cook: I found that iPad – even before it shipped, as I was testing it in secret – quickly became 80-90% of my consumption and work
• Cook: iPad is the fastest adoption across a wide range than I’ve ever seen before
• It took us 22 years to sell our first 55 million Macs. It took us 5 years to sell our first 55 million iPods. It took us 3 years to sell our first 55 million iPhones. It took us less than 7 quarters, 1 3/4 years, to sell our first 55 million iPads.
• The reason iPad is so large is that it stands on the shoulders of everything that came before it: iPhone, iTunes Store, App Store, etc. People just know how to use it instinctively.
• iPad is on a trajectory that is off-the-charts. The ecosystem in 170,00 apps optimized for iPad
• We’ve only scratched the surface. We’ve focused on China and some in Brazil and Russia, but there is much headroom.
• iPhone has also created a holo effect for iPad. iPad also has a halo effect. (The Perfect Storm – MDN Ed.)
• iPhone changed everything. iPhone halo effect for the Mac is amazing.
• iPod halo effect worked somewhere, but not everywhere because some people were already getting music from their phones.
• iPod created a halo effect for the Mac. 26 consecutive quarters, the Mac has outgrown the PC market now.
• Cook: We convinced China Unicom to try to post-paid business with iPhone and it worked. Everyone wins. It won’t work in every market, but it can work in markets where it hasn’t yet really been tried.
• Cook: “The paramount thing is the product. It is the focus.”
• Cook: Everyone in every country want the best product. In emerging markets, in phones, the retailer has the significant portion of the distribution vs. developed markets where the carrier has control
• 25% of smartphone market is projected to come from China and Brazil. We are very, very focused on the smartphone market in China. $13 billion in revenue from China last year.
• The truth is that the handset industry is a jaw-dropping industry. The opportunity is huge. When you look at its enormity, our numbers don’t seem so large anymore.
• Cook: “We had a decent quarter last quarter.” (laughter)
• Apple puts the same energy into supplier responsibility as they put into new products.
• The ongoing independent FLA audit of Apple suppliers is probably the most comprehensive audit in history
• Cook: We are taking the unprecedented step of reporting our progress monthly on our website, so we can be transparent to everyone on this issue.
• Cook: The use of underage labor in abhorrent. It is extremely rare in our supply chain, but we want it to be eliminated entirely.
• Cook: No one in our industry is doing more to improve working conditions than Apple. We continue to look into the supply chain and find and fix problems. I am so incredibly proud of the work we are doing in this area. We focus on the most difficult problems and stay with them until they are rectified.
• Cook: We believe in worker education and we provide free business classes – more than 60,000 employees have attended these classes (larger than Arizona State) so far…
• Cook: We believe that every worker had the right to safe working conditions at a competitive rate and Apple’s suppers must live up to this belief.
• Cook on Chinese supply chain and workers: “Apple takes working conditions very, very seriously and has been for a long time.”
• Tim Cook begins with safe harbor statement: This presentation may contain forward looking statements that involve risks and uncertainties, and actual results may differ. Risks and uncertainties include without limitation the effect of competitive and economic factors, and the Company’s reaction to those factors, on consumer and business buying decisions with respect to the Company’s products; continued competitive pressures in the marketplace; the ability of the Company to deliver to the marketplace and stimulate customer demand for new programs, products, and technological innovations on a timely basis; the effect that product introductions and transitions, changes in product pricing or mix, and/or increases in component costs could have on the Company’s gross margin; the inventory risk associated with the Company’s need to order or commit to order product components in advance of customer orders; the continued availability on acceptable terms, or at all, of certain components and services essential to the Company’s business currently obtained by the Company from sole or limited sources; the effect that the Company’s dependency on manufacturing and logistics services provided by third parties may have on the quality, quantity or cost of products manufactured or services rendered; risks associated with the Company’s international operations; the Company’s reliance on third-party intellectual property and digital content; the potential impact of a finding that the Company has infringed on the intellectual property rights of others; the Company’s dependency on the performance of distributors, carriers and other resellers of the Company’s products; the effect that product and service quality problems could have on the Company’s sales and operating profits; the continued service and availability of key executives and employees; war, terrorism, public health issues, natural disasters, and other circumstances that could disrupt supply, delivery, or demand of products; and unfavorable results of other legal proceedings.
More information on potential factors that could affect the Company’s financial results is included from time to time in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s public reports filed with the SEC, including the Company’s Form 10-K for the fiscal year ended September 24, 2011 and its Form 10-Q for the fiscal quarter ended December 31, 2011. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.
• This one caught us a bit by surprise yesterday, luckily we had a long layover at the right time:
• Apple’s playing some really nice music prior to the presentation…
• Awaiting start of Mr. Cook’s presentation…
Apple to provide live audio webcast of CEO Tim Cook’s appearance at Goldman Sachs Conference on February 14
– February 13, 2012