Apple Chief Operating Officer Tim Cook, who took over the day-to-day operations for CEO Steve Jobs during his medical leave last year, kicked off his session at the Goldman Sachs Technology Conference with a safe-harbor statement and then went right into the discussion.
Question No. 1: Is Apple a mobile devices company? Quick answer is yes. Cook says transition to mobile devices began in 1991 with introduction of first portable device. Over the past few years, Macintosh business has become a predominantly mobile device product line. The iPod hit in 2001 and the iPhone in 2007. Vast majority of Apple's revenues come from mobile devices or content purchased from those mobile devices. The company believes it's well positioned to do well in mobile world because it does both hardware and software.
In a mobile world, who are the competitors? It's not that simple, he said. Sure, Microsoft is a competitor but they also love the Office Mac division. In OS, mobile OS and so on, they are competitors. same goes with Google. Apple partners with them in maps, for example, but now they're competitors in mobile OS and devices. Content providers and mobile carriers are partners and those are easy to recognize. Others are harder to define.
If Apple is a mobile device company, then where does that leave other products, such as desktop computers and Apple TV? Cook is quick to jump on the Apple TV question.
Let's be clear: Apple TV is still a hobby. The company has been clear about that - but the company isn't calling it that to downplay it. If you look at the other businesses - PCs, MP3 players, Phones - those are all huge markets, he said. In reality, Apple TV is a very small market - today. (he literally paused and then said "today." Apple TV grew by 35 percent on a unit basis, year over year, he said. The company remains interested in it and even improver the user interface last year. Why? Because something in Apple's gut tells the them that there's something there. But, today, the go-to-market for Apple TV is very different. The go-to-market model would lead to TV, he said, and Apple has "no interest in being in the TV market."
The iMac is a different story, he said. It's a strong business and the company will continue to invest in it. The Mac, he said, has outgrown the PC market in 20 of the last 21 quarters. The push is to continue to convince Windows users to switch to the Mac, he said.
He spent some time talking about the iPhone as a platform. The iPod Touch, he said, is a good example because it's been "a runaway hit," growing 100 percent year-over-year and 55 percent in the December quarter. For every one that's sold, it helps fuel more applications, which in turn fuels more developers, which in turn helps fuel the platform to be even stronger.
Obviously, the iPad - which works on the iPhone platform - isn't for sale yet, so it's premature to talk about it. But the iPhone, he said, is only two and a half years old and really is just getting started. What's happening is that the platform is getting larger and the ecosystem is getting better and better. Applications are what people are looking for, what they can't live without.
Changing gears, he stressed that Apple is about innovation. Sure, in some cases, they're obsoleting themselves but they're also making products better. He spoke briefly about the iPad's target market. Sure, the netbook folks who make the comparison to those devices will love the iPad, compared to the netbook - which he has called "junky" in the past. Until they start selling the devices, though, it's would be premature to talk about it.
Cook was also asked about the advantages and disadvantages of partnering with a single carrier. One of the big advantages, he said, is that they are able to easier innovate alongside the carrier to provide features - such as visual voicemail - that might be harder to rollout with multiple carriers.
He spoke for a few moments about the demand in the enterprise and noted that many believe that enterprise is bigger than consumer - but that's not always the case.
Consumers, it so happens, work in the enterprise and they want those products to be carried into the workplace. Apple is innovating to make that easier - products like Boot Camp that allows users to access Windows programs if they need them. Still, consumer is where Apple has its sights set.
"Our heart and soul and DNA is consumer," he said.