Apple CEO Tim Cook: ‘We’re not in the junk business’

“Apple’s doomed. This is what you hear and read… Apple’s (AAPL) stock price [is] down around 33 percent since its peak about a year ago,” Sam Grobart reports for Bloomberg Businessweek. “None of this rattles Tim Cook. Oh, he’s heard it, of course, but his soft-spoken, deliberate manner in interviews is not cover for how, say, Apple’s share price affects his mood. ‘I don’t feel euphoric on the up, and I don’t slit my wrists when it goes down,’ he says. ‘I have ridden the roller coaster too many times for that.’ When asked about the rise of low-cost manufacturers, he’s equally even-tempered. ‘It happens in every market I’ve seen,’ he says.”

“To Cook, the mobile industry doesn’t race to the bottom, it splits. One part does indeed go cheap, with commoditized products that compete on little more than price. ‘There’s always a large junk part of the market,’ he says. ‘We’re not in the junk business,'” Grobart reports. “The upper end of the industry justifies its higher prices with greater value. ‘There’s a segment of the market that really wants a product that does a lot for them, and I want to compete like crazy for those customers,’ he says. ‘I’m not going to lose sleep over that other market, because it’s just not who we are. Fortunately, both of these markets are so big, and there’s so many people that care and want a great experience from their phone or their tablet, that Apple can have a really good business.'”

Businessweek cover
Photograph by Adam Amengual for Bloomberg Businessweek
“While the partnership between the two men was made official last fall, [Jonathan] Ive and [Craig] Federighi — whose desks are a one-minute walk from one another — have been working together for years. ‘I don’t think we ever talked about our roles,’ Ive says. ‘We talked about how can we most effectively extend the collaboration that always existed,'” Grobart reports. “The line against Apple is that its pace of innovation is off, but Ive and Federighi dismiss that. The two are keen to point out not just new features, but also the deep layers of integration that went into each one. Of the 5S’s fingerprint scanner, Ive says, ‘there are so many problems that had to be solved to enable one big idea.’ Without mentioning competitors (Samsung), it’s clear the two executives think some of what passes for innovation is illusory at best. ‘We didn’t start opportunistically with 10 bits of technology that we could try to find a use for to add to our features list,’ Ive says. Federighi jumps in: ‘New? New is easy. Right is hard.'”

MacDailyNews Take: Indeed, some seven years of work went into making Touch ID a reality.

A few more nuggets:

• “We never had an objective to sell a low-cost phone. Our primary objective is to sell a great phone and provide a great experience, and we figured out a way to do it at a lower cost.” – Tim Cook

• “I think it’s even more a two-operating-system world today than it was before. [But] when you look at things like customer satisfaction and usage, you see the gap between Android and iOS being huge.” – Tim Cook

• “Does a unit of market share matter if it’s not being used? For us, it matters that people use our products. We really want to enrich people’s lives, and you can’t enrich somebody’s life if the product is in the drawer. – Tim Cook on the wide gap between the highly-used iOS and the lightly-used Android online

Much more in the full article – highly recommendedhere.

MacDailyNews Take: Oh, yes, Tim is nothing like, and learned nothing, from Steve. (sarcasm piled high)

There’s always a large junk part of the market. We’re not in the junk business. – Apple CEO Tim Cook, September 12, 2013

There’s some stuff in our industry that we wouldn’t be proud to ship; that we wouldn’t be proud to recommend to our family and friends. And, we can’t do it; we just can’t ship junk.Steve Jobs, August 7, 2007

[Updated: 2:22pm EDT with new headline, additional links.]

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41 Comments

    1. Tim Cook also said “If Apple doesn’t innovate we will wind up like Nokia.”

      That’s like Madoff saying “We need more checks and balances with our accounting practices.”

      That’s like Ted Bundy saying “I just haven’t found the right girl.”

      This guy thinks innovation is an iterative update… he’s clueless!

    2. It’s like taking the pulse of an article or statement:

      Is the author’s point to FUD monger? To spread FEAR, UNCERTAINTY and DOUBT? If it is, the point of the article is to MANIPULATE the reader. Next step: Figure out in which direction the author is attempting to manipulate you. The third step is to step behind the scene and figure out WHO is pulling the author’s strings. These days, there is typically some biznizz blowhard attempting to play The Boss Of You behind some expensive curtain. Then the LAST step is to take a step back from the article and research VERIFICATION that the conclusion you have reached about the article is correct. Verification is consistently the last, and most important step in critical system processes. Don’t forget it.

      And what is another name for FUD mongering? Propaganda.

  1. Troll was sent back under his bridge to play with his android which has a large screen to compensate for a lack of intellect, romantic prowess, income, education, and decency.

      1. ‘Competence’ is not entirely what’s lacking. As I often rant, if a company treats its competent people like garbage, if a company demoralizes the creative, that company will die. I say this from the perspective of having watched it happen first hand at Eastman Kodak. Marketing-As-Management despises creativity and productivity and literally chases it out of any company.

        Then of course I could rant away about the plethora of worthless business schools and therefore worthless MBA degrees, poorly taught business management, the sick and self-destructive biznizz culture that currently dominates the human world, on and on. It’s a whole gigundo FUBAR catastrophe of insistently doing things wrong. FUBAR loathes Apple.

        The motto for today’s most flagrant, insistent losers:
        “If your not cheating, your not trying!

        — (Deliberately ignorant spelling applied above for effect). 😉

  2. I’m going to buy a 5s on Friday and for the next 24-30 months I’m going to be very happy with my cell phone. It replaces a still perfect 4s, that replaced a well used 3g. I’m going to be happy with the cellphone coverage, and the customer service from both AT&T and Apple. It is going to cost me $299 + $36 plus $100/month. It is going to be in my pocket, doing what it suppose to do the whole time. I’m not going to think about “upgrades”, or “security” or “backup” or anything else- I’m going to do what I need to do with it without me worrying about it for one second for the entire life of the device. Name another consumer product you can say the same about. (The only one I can think of is my refrigerator. 🙂 Even my chest freezer you have to defrost every once and while! )

    That, my friends, is why I am an Apple and AT&T customer. The article above is How and Why Apple does what they do. If you can afford it, it is worth spending the money for their products and services. They make me money in time I save using them.

    1. What is the dividend on AAPL right now? $3.05/share per quarter? So, if you buy 13 shares of their stock, you’ll earn $317.20 over 2 years. So, put $6000 away now and get a free iPhone every 2 years.

  3. It doesn’t make sense for Apple to make a Yugo.

    Then you have to compete with the world’s worst, cheapest auto makers.

    Apple makes not only the best in its class today, but already has capability embedded to make sure its customers today are happy with their equipment 3-4 years out into the future … at least. That is not often noted.

    When your Apple equipment costs say 25% more than an Android, but it work flawlessly for 4 years, yet your friend buys 2-3 Androids in that time, is your friend getting “value”?

    1. “It doesn’t make sense for Apple to make a Yugo.

      Then you have to compete with the world’s worst, cheapest auto makers.”

      Worse…you are then competing for the world’s worst, cheapest customers. The ones that don’t buy apps, music, movies, the best tablets, computers, etc.

      1. Tell us then, sticking with automotive analogies, does it make sense for BMW to sell Minis, or Mercedes to offer A- and B-class models?

        There are far too many people who forget that Apple proved success with low-cost “entry-level” models like the Mac mini and the iPod nano.

        Modestly-priced products are not necessarily junk. Shame that Apple leadership and many Apple enthusiasts can’t understand the need for a modestly-priced iPhone for world markets. This is a stupid strategic mistake on Cook’s part and it will come back to haunt him, just as it crippled the Mac platform.

          1. Globally speaking, most people can’t afford an Apple product either. To serve more of those people, BMW (and Mercedes, and Audi, etc) expanded their range of motorcars TO SERVE THOSE NEW CUSTOMERS. The fact that BMW chose to revive the Mini brand for its cheaper FWD cars is irrelevant.

            The fact is that good companies can offer high quality at all price points. Cook has made a long-term mistake by not doing this with the iPhone. Mac vs PC all over again,

  4. I don’t think this article is that great.

    It ends indicating that Apple is repeating its mistakes.

    And it fails to mention that commodization and the race to the bottom is unsustainable, as so many PC companies have found over time. Just look at Dell, for example.

    1. What mistakes? Apple’s formula is to work hard to make the best stuff they can possibly make and never stopping that cycle. It works, no one can do what Apple has done and Apple is extremely successful by this.

      What mistakes?

      1. I’m referring to FUDish paragraphs in the article starting with:

        “You could say that Apple’s approach in mobile ignores history, specifically the Mac/Windows wars of the 1990s, which Apple clearly lost. In this scenario, Android is Microsoft’s Windows”

        and

        “Apple has set a pace for itself that can be hard to keep up. Like it or not, every time Cook walks onstage and unveils anything less than a mind-blower, the world—or at least the stock market—reacts with disappointment.”

        Pessimistic of Apple, if you ask me, and ignoring the obvious downsides of commoditization.

        1. I’m not disagreeing with what you say only want to add that writers keep getting the wrong idea that “apple clearly lost the Mac Pc wars”.

          Apple Mac won the PC wars.

          Macs make 40% of the PC industry profits, i.e Dell HP, Samsung, Sony, Lenovo , Acer, Asus plus dozens of other Chinese, Korean, Indian , European etc PC makers make up the remaining 60% !!

          IBM quit the PC business years ago , Compaq gone, Dell sold, HP fired numerous CEOs and keeps debating whether to keep making PCs ( apple is now using HP’s campus), Microsoft fired Ballmer.

          Only in tech journalism that the last man standing with the all the chips ‘lost’.
          Macs didn’t lose the PC wars, apple just didn’t want the no profit market share.

    1. There you go! I think it encapsulates so thoroughly the fundamental difference between piling on new features and making them a joy and fun to use.

      New is easy. right is hard>

      By far the best quote of the entire article (which is stuffed fat with great quotes).

  5. Oh Captain! My Captain!

    Cook and company just proved why they are the right people to run the most inovative and powerful company in the world.

    And for all the FUD-packers……you just got school’d. haha

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