Apple is not a hardware company

“Apple was firmly in the spotlight again this week following CEO Tim Cook’s comments at the Goldman Sachs Technology and Internet conference on Tuesday,” James Rogers reports for TheStreet.

“Despite the phenomenal success of the iPhone and iPad, Cook used a question-and-answer session with Goldman analyst Bill Shope to explain that Apple’s more than a mere hardware company,” Rogers reports. “‘Because we’re not a hardware company, we have other ways to make money and reward shareholders,” he said, adding that Apple generated $3.7 billion in software and services revenue last quarter. ‘If you look at that compared to software and services companies, it’s an incredible amount of revenue.'”

Rogers reports, “Cook noted the purchase of an Apple device opens the door to additional revenue for the company. “‘We don’t look at the sale of a product as the last part of our relationship with a customer,’ he said. ‘It’s the first.'”

Read more in the full article here.


  1. “Also this week, it emerged that legendary investor George Soros added to his Apple stake during the fourth quarter. Einhorn also added to his Apple stake.”

    Because Wall Street only cares about the future and more and more of Wall Street biggies add to their AAPL positions, it’s clear Tim Cook must STAY!

    1. It could be a misquote or, perhaps, a simple slip of the tongue. If so, I suspect that Cook meant to say, “Apple is not just a hardware company.”

      This is nothing new. People who know Apple have been saying this for years. For instance, Apple started making a comeback with the CRT iMac, but the release of OS X was also critical. The iPod was the start of the new ecosystem, but it took iTunes (including a Windows version) to really launch sales. Similarly, the iPhone and iPad would not be “magical” without iOS.

  2. People are always arguing about whether Apple is a hardware company or a software company. I think that Apple is a solutions company and a particular solution might involve a combination of hardware, software and services, but in varying proportions.

    The time has long gone where hardware and software were separate entities. The two are now inter-dependent and with Apple, it’s always been that way.

  3. They are not hardware or software but both.
    Geez, what are we even talking about this for?

    If these analysts have only just realised this then I would trust them to analyse the weather.

    I bet the their first question when analysing Apple is ,”who?”, and the 2nd is “what version of windows does it run then?”

  4. Apple is doomed as the asteroid accident shows it is not the last , is the first , sth from the galaxy is coming down to take over Apple . A Samsung galaxy 4 .
    From : Anonymous wall shit author .

  5. Oh, for crying out loud. Does Tim Cook really think Wall Street is going to pay any attention to what he says? Definite preconceptions about the company already exist and that isn’t going to change. The iPhone makes up 50% of Apple’s revenue and I’m sure it’s considered a hardware device by Wall Street’s standards. Since Wall Street has said Apple lives and dies by iPhone sales, then that’s how it is. Apple has no say over the matter. It’s what those money movers on Wall Street say what Apple is that matters. There might be some mix of hardware and software from Apple, but the biggest weight of revenue is from hardware. Until Apple buys some software company like Adobe or starts up its own search engine, Apple will be a hardware company whether Tim Cook agrees with it or not. Maybe Tim Cook should rename the company Apple Solutions, Inc. to change Wall Street’s perceptions of the company. NOT A CHANCE!

    If an elephant walks down the street and everyone says he’s a hippo, then he becomes a hippo by majority definition. The elephant can protest all he wants, but he might as well get used to being called a hippo.

    Anyway, Apple’s problem is not revenue or profits that’s messing the shareholder value up. It’s Apple’s whole financial model that’s messed up because it doesn’t jibe with Wall Street’s financial model of what a good company is. Wall Street expects cheap and unlimited to win over expensive and limited. I don’t care how much money Apple makes, Wall Street will continue to undervalue the stock and long-term shareholders will be the big losers.

    1. I’m a long-term shareholder and I don’t consider myself to be a loser. Well, not in regard to having bought and held Apple stock. In other ways I suppose it’s debatable.

  6. One cannot have hardware without the software. The title that MDN selected is a moronic generalization of reality and a complete misrepresentation of Tim Cook’s qoute.

    1. Actually, you could not be more wrong.
      DELL does not own Windows. Nor do any members of the multiplicity of box makers that slap Microsoft’s Windows on their hardware.

      And it goes both ways. For the most part throughout its history, Microsoft has been a software maker without hardware.

      Plus, MDN did not select the title. It’s the original title of the article on The Street’s website.

      1. Of course MacFreek’s wrong, he’s a trolling fuckwit, with an agenda to totally misrepresent any Apple product just so that it winds up the Apple community on here.

  7. Oh, wait. I’ve been reading over and over around here that Tim Cook, like his predecessor, doesn’t care about the price of AAPL nor its owners. But, he said he does care. So, who is right?

    1. Probably in the shortened messages that fly around here you’re not getting full treatment on what’s being said.

      Tim has said in public over and over again that what Apple does is make great products that their customers love.

      That’s not the same thing as saying Apple senior management team doesn’t care about the price of AAPL shares.

      It’s actually not an either/or situation. Apple will not build products to appease Wall Street (read cheap, mass market). Apple will always pursue products that they would be proud to recommend to their family members.

      There are a number of things Apple can do outside of its products that will help Wall Street with their valuation metrics. Communicating with Wall Street is one, and Tim has begun doing that in ways Steve didn’t care to. Paying dividends and buying back stock are two more ways; Steve didn’t care for either of those but Tim doesn’t mind doing it.

      Steve was a product guy who held the CEO title so that he could do whatever he wanted. But he didn’t “run” the company. Tim did as COO. Now Tim is the CEO and he is “running” the company more like traditional big company CEO’s do, and we’re starting to see the effects of that.

      Under Steve Apple was famous for saying “No” more often than they said “Yes.” “To focus is to say ‘No'” was Steve’s way of turning away all the well-intentioned folks. I also look at that as Steve saying “I can’t focus on lots of products and run a company.” It’s just possible that Tim is not trying to be the detail miser that Steve was, and instead is letting others more adept at that carry that torch. Artfully carried out such a shift will allow Apple to “focus” on more product categories. Recall that when Steve first explained “to focus means to say No” there was Mac. While remaining focused Apple created the iPod. And then, being “focused” on just two product categories, Apple produced the iPhone. And then, being “focused” on just three product categories, Apple produced the iPad. And then, being “focused” on just four product categories, Steve “cracked” TV.

      So, who is right? I think you’re asking a false question: Tim doesn’t focus the company’s product efforts based upon what will make Wall Street happy, but he does “care” about Wall Street’s perception of Apple.

      1. Jim, ppeterson is a stale old Troll here.
        Please don’t waste your time trying to use rational points to change pp’s mind about Apple – Rational thoughts did not create pp’s troll persona in the first place.

        1. Yeah, ppeterson knows the truth, but spouts BS to get the Apple fans in this forum riled up. Apple focuses on great products and a great user experience. That translates to sales and profits as well as a tremendous increase in AAPL in the past decade, even taking into account the recent slide.

        2. And I’m a stale old soul around here.

          ppeterson doesn’t write like English is a language he is learning at the behest of South Korean employers, and his focus has pretty much been his belief that Tim Cook needs to be let go. So I’ve been okay with responding — you never know when enough facts and respect will turn the tide with a person. And just maybe the reasoning I post will help others with their elevator speeches, too.

          1. Derek’s thoughts on trolls:

            As a senior troll trampler, I’ve found it’s fairly easy to spot a troll. If you’ve run into a dedicate misery monger, you’ve found a troll.

            Once you’ve determined you’ve got a troll on the line, there is no point attempting to be rational with them. “Don’t feed the trolls” is wise advice; Except when:

            (A) You’re able to use them as a tool to make a useful point,
            (B) You enjoy antagonizing them for personal fun and pleasure,
            (C) You know they’re a fraud and enjoy ripping off their mask. Example: They’re a paid stooge for Samsung, ZeoBIT, Microsoft, ad nauseam.

            Don’t ever let a troll get you down, no matter how you choose to communicate with them. They hate being laughed at, the usual routine with anyone we deem as ‘evil’. Keep track of when you’ve stopped enjoying yourself. Always be ready to cut off communication when it has clearly become pointless and idiotic. It’s not a competition, not ever. Laugh at it or leave it. 😀

  8. Main thing Cook said at Goldman Sachs: Apple makes big, bold bets. Be on the lookout for the next big thing. It may be 2014 or 2015, but it will be here when ready, and based on the past, it will years ahead of competitors.

  9. I think the point here is that:

    Apple is not JUST a hardware company. It’s odd how after all these decades of Apple, how few people understand the benefits of marrying hardware with software.

    And of course Cook was pointing out that once that hardware/software device is in a customer’s hands, that’s not the end of providing the customer with Apple software…

    It’s an ongoing relationship.

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