Apple CEO: Specs touted by tech giants ?because they can't have a great experience?

Apple CEO Tim Cook speaking during a September 2012 media event.

Nathan Mattise / Ars Technica

Apple CEO Tim Cook spoke during the opening keynote of this year's Goldman Sachs Technology Conference on Tuesday, answering questions about Apple's operations and singing the praises of the company's efforts in innovation, acquisitions, retail, and more. Predictably, Cook did not answer any questions related to the future product pipeline at Apple. But he did discuss Apple's philosophies about designing and selling products and shared how the company thinks of itself as it faces increasing competition.

Many of us who listen to Apple's quarterly earnings calls have heard some of these points before, so the talk may not seem like anything new. But Cook went out of his way on Tuesday to communicate his own enthusiasm for the company and where Apple is going under his direction, often with more detail than we're used to hearing from the fiscal calls. Here are some choice quotes from the Goldman Sachs keynote, straight from Tim Cook's mouth:

On why Apple doesn?t play the spec game in its products

Cook was asked what Apple thinks about pundits who say the company needs to release a larger-screened iPhone or tablets with even higher processing capabilities.

"In the PC industry over the years, the way that companies competed were in two things: specs and price. People would say, 'I've got the largest drive,' or 'I've got the most megapixels.' The truth is that customers want a great experience and quality?they want that 'a-ha' moment," Cook said.?"These [specifications] are things that technology companies invent because they can't have a great experience, so they talk about the specs of something. [?] The customer experience is always broader than that which can be defined by a simple number."

That said, Cook emphasized that when the company trash talks an element of the competition, it isn't usually saying it will never do something like that. "The only thing we'll never do is make a crappy product," Cook said. "We're gonna make a great product. That's the only religion we have: we must do something great. Something bold. Something ambitious. We sweat the details on those and hopefully we've proven over the years that this is something we can do."

On Apple's so-called ?depression-era mentality? with its cash balance

"Apple doesn't have a depression-era mentality. Apple makes bold and ambitious bets on products and we're conservative financially," Cook said. "We're investing in retail stores, distribution, product innovation, R&D, new products, the supply chain, acquiring some companies. I don't know how a company with a depression-era mindset would have done all those things."

On Apple's acquisition strategy

"If you look in the last three years, we've averaged about an acquisition every other month. The kind of companies we've purchased have been the companies where they have really smart people and/or IP," Cook said. He went on to say Apple has looked at larger companies for acquisitions, but they "didn't pass our test" when it comes to the talent or IP that Apple would want control of. "We don't feel a pressure to just go out and acquire revenue; we want to make great products. [?] The cash is not burning a hole in our pockets."

On Apple?s ?culture of innovation?

"Apple is in a very unique and unrivaled position, because Apple has skills in software, in hardware, and in services. The reality is that the model that grew the PC industry, where companies specialized in a thing and then somebody did some integration work at the end?that model's not working for what consumers want today," he said. "Apple has the ability in all 3 of these spheres to innovate like crazy and really cause magic."

Cook named Apple designer Jony Ive as being the "best designer in the world," and gave credit to Bob Mansfield, Jeff Williams, Phil Schiller, Dan Riccio, and Craig Federighi. "I see all these guys who are so focused on product and are at the very top of their game, and it's a privilege to be a part of that. I look at Apple and see culture deeply embedded, I see an incredible blend of skills that's unprecedented and unrivaled to deliver these magical moments."

On Apple reaching its ?natural limit on market share gains? in smartphones

"We don't really think of the world as having 'limits,'" Cook said before expounding on Apple's momentum in selling the iPhone. He pointed out that of the 500 million iPhones Apple sold between 2007 and the end of 2012, more than 40 percent were sold last year alone. "There's incredible momentum there? In addition, it's fueling incredible economic gain for developers."

He went on to say that the app economy in the PC market isn't flowing like it used to?"I challenge you to find any [developers] except the usual suspects now"?saying software innovation has now moved to the tablet and smartphone space. As a result, Apple continues to see the mobile space as having incredible potential.

"iPhone is really only available to about 50 percent of the subscribers in the world, so there's tons of opportunity to continue expanding that as well. Frankly speaking, I see a wide open field. That's how I see it. I don't think about that word?'limits.'"

On Apple targeting emerging markets with more affordable products

Cook answered a question on this topic by touting the company line: "Our north star is great products. Everyone comes to work every day and leaves work thinking about that, front and center." Despite this, he said Apple is indeed making moves to make products more affordable, pointing to price reductions in the iPhone 4 and 4S worldwide as the iPhone 5 was released last year.

"if you look at Apple's history, if you take something like the iPod?when we came out with iPod it was $399. Where's the iPod today? You can buy an iPod shuffle for $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 at a cost that sells at a very low price," Cook said.

"For years, people said, 'Why don't you have a Mac that's less than $500 or $1,000?' Many people asked that, and frankly, we worked on this," Cook admitted. "But we concluded that we couldn't do a great product, so we didn't. But what did we do? We invented the iPad, and now all of a sudden we have an incredible experience. [?] Sometimes you can take the issue and solve it in different ways."

On self-cannibalization

Cook reiterated his recent comments on Apple's first quarter earnings call when asked about product cannibalization within Apple. "When we came out with the iPad, what did people worry about? They thought, 'Oh my god, you're going to kill the Mac. What have you done?' The cannibalization question raises its head a lot. The truth is that we don't really think about it that much," Cook said. "Our basic belief is that if we don't cannibalize, someone else will."

Cook argued that the PC market is so large that there's much more to cannibalize there than the Mac or even the iPad (which could be cut into by the sales of the iPhone), so it's not as much of a worry for Apple. Even still, he clearly believes self-cannibalization isn't something to fear. "I think if a company ever begins to use [self] cannibalization as their primary or even a major factor in their decision making of what products to go into, it's the beginning of the end, because there will always be somebody else."

On retail?s contribution to the success of the iPad

"I don't think we would've been nearly as successful with iPad, as an example, if it weren't for our stores," Cook told the audience. "Here's a product coming out and it's different. People's view of a tablet was that it's a heavy thing that the Hertz guy was holding and no one wanted. But our store is a place to go and explore and discover and try it out and see what it will do. I don't think the launch would've been nearly as successful without stores that welcome people in at 10 million [visitors] per week and show this."

On what Cook is most proud of after his first full year as CEO of Apple

"I'm most proud of our employees. I have the privilege every day of working with people who want to make the very best products in the world," Cook said. "They're there to do not only great work, but the best work in their lives. And they're there to do it without limits. They're the most creative people on earth, and it's a privilege of a lifetime for me to be at Apple at this point in time and work with all these people."

But that's not all?Cook is also unsurprisingly proud of Apple's products, declaring the iPhone and iPad the best smartphone and tablet in the market, respectively. And when it comes to Apple's efforts to improve factory conditions in China, or just the environment in general, Cook is happy to sing the company's praises.

"I'm incredibly bullish about the future and what Apple can do, and [about] more contributions it can make to the world. I'm very proud that we're out front and that we have a spine on supplier responsibility," he said. "We don't care if people are lobbing grenades from the sidelines. We're going to do what's right and just."

"I'm proud we have the largest private solar farm ever, anywhere, and we can run our data centers on 100 percent renewable energy," Cook added. "I don't mean to gush but that's how I feel."

Source: http://feeds.arstechnica.com/~r/arstechnica/index/~3/oBiLlhG5X74/

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