Apple COO Tim Cook answered a round of questions during the annual Goldman Sachs Technology & Internet Conference Tuesday and ended up discussing various aspects of Apple's business. A major thread throughout Cook's talk was the fact that Apple thinks of itself as a "mobile devices company," echoing Steve Jobs' comments at the recent iPad introduction that Apple competes with the likes of Nokia and Sony when it comes to revenue."If you look at Apple's December quarter results, which includes revenues of almost $15.7 billion dollars—which was a staggering result—as we compared ourselves to every other company in the world, including Sony and Nokia and Samsung, which now have huge mobile device businesses, we found out that we were the largest in the world by revenue," Cook said. "So yes, you should definitely look at Apple as a mobile device business."
Those mobile devices include the iPod, iPhone, and now the iPad. Even Apple's Mac business has become dominated by its portable MacBook and MacBook Pro notebooks, though. "The reality is that the vast majority of Apple's revenue comes from either mobile devices or the content purchased for those mobile devices," Cook explained.
Apple has an advantage in this space due to its experience in vertical integration. In addition to having a operating system that is "hugely scalable" from servers and desktops down to pocketable devices, Apple also has hardware and industrial design chops. "We believe that we are uniquely positioned to do extremely well in a mobile device world, because we have integrated together seamlessly software and hardware," Cook told the conference attendees. "There are very, very few companies in the world that can do that well." He said the traditional model of multiple vendors being responsible separately for hardware, OS, and key applications just doesn't work for mobile devices.
Cook also went on to discuss the advantage that Apple has with the combined platform of the iPhone and iPod touch. The iPod touch alone grew 100 percent year-over-year for 2009, which gives the iPhone OS platform an installed base of over 75 million devices. The iPad will expand that ecosystem further.
Cook also touched briefly on its partnerships with mobile carriers, addressing the fact that AT&T still remains the sole mobile carrier for the iPhone in the US. He said that having a single carrier offers some advantages; it certainly makes working with a carrier to innovate on features that require carrier cooperation easier, such as Visual Voicemail. However, in markets where Apple has added multiple carriers, sales have generally increased. The US is somewhat unique in that the current hardware is essentially only compatible with one carrier, but Cook noted that in the top 10 markets for the iPhone, five of those are single carrier markets. "We look at each on a country-by-country basis," he said.
Other comments reiterated things we have heard before, such as Apple TV remaining a hobby. The device doesn't sell nearly the kind of volume that Apple usually wants to see, but it did see a sales increase of 35 percent in the most recent quarter. "We're continuing to invest in it because our gut tells us there's something there," Cook said, after sharing that he is an avid Apple TV user.
Retail stores continue to perform well for Apple, and the company is on track to open around 50 stores this year, including "jaw-dropping" stores in New York and Paris. Shanghai and London stores are coming soon. (I'm looking forward to the Chicago Lincoln Park location.) Half of all new Mac customers continue to be Windows switchers, and Cook said that this represents the most significant growth opportunity for the Mac platform. He also noted that Mac sales have grown year-over-year for 20 out of the last 21 quarters.
Apple continues to focus its efforts on the consumer over courting enterprise IT. "Enterprise is just 10 percent of the market—consumer is over 50 percent. Our heart and soul and DNA is in the consumer," Cook said. But consumer demand has driven IT departments to in many cases allow individual users to choose a Mac. "If [someone] is making $150,000 a year, and [letting them use a Mac] makes them one percent more productive, you've paid for the Mac in one year," he explained. IT admins "with vision" are looking at integrating the Mac platform much differently than in the past, he said.
Cook also held the line on his opinion of netbooks, which is that they don't offer a very good experience for users. "They are an experience that most people will not want to continue to have," he said. "I think that people were interested in the price, then they got it home and used it and went, 'Why did I buy this?'" Compared to the "magic" of using an iPad, Cook said that he didn't think people would consider a netbook. However, he also indicated that there are plenty of users that aren't looking at netbooks that are likely to consider an iPad as well.
Source: Arstechnica.com
