Apple’s COO Tim Cook was extremely bullish on Apple’s prospects in 2010, in spite of economic gloom and increased competition in phones and PCs.
Speaking to a handful of Wall Street analysts on a Goldman Sachs webcast, Cook predicted the iPad will be a hit and that the Mac will continue to grow, especially in enterprise. And thanks to the recession, Apple will open dozens of “jaw-dropping” new stores this year in prime locations.
Here are Cook’s key points:
* Apple has become the biggest digital content company out there. It sells more downloads of music and movies than anyone else, a trend that will only accelerate.
* The Apple TV is still a “hobby” — settop boxes are a small market compared to PCs or cell phones — but Apple sees enormous potential some day. “We’re investing in it because our gut tells us there’s something there,” Cook said.
* Apple will NOT will not make an actual TV. Cook said the natural thing to do with Apple TV is put it in a TV, but the company has no interest in the TV market.
* Cook sees are really bright future for the iMac. People will continue to want a big, beautiful all-in-one computer that’s easy to set up and use, he said.
* He also sees huge potential for the Mac business. The PC market is 3B units a year and Mac is 10M units. “The ceiling is far above,” he said in his southern drawl. “It doesn’t take market growth to grow the Mac. What we had to do was convince users to switch.”
* Cook has been using an iPad for last 6 months. “The experience is jsut incredible,” he said. The experience of sufring the web is 99% better than anything else out there, he claimed.
* The iPhone busines is just getting started (it’s 2.5 years old). Cook sees a ton of growth. “The platform (is getting) larger and larger, the ecosystem better and better, and there are more and more apps that people can’t live without,” he said. He added that there are very few companies that can manage such a large platform – and that Apple has been doing it for 30 years. “I see opportunity all over the place is the net of it,” he says.
* Asked if he thought Apple’s product lineup was complete, Cook said the word “complete” isn’t in Apple’s dictionary. The company will continue to innovate and try to obsolete its own products before someone else does.
* Asked about exclusive carrier contracts, Cook said there are distinct advantages to going with single carriers. The primary advantages are simplicity and the ability to innovate. eg. the initial iphone had visual voicemail.
* The multicarrier model is more complicated, but in countries where Apple has added multiple carriers, unit sales have gone up significantly. However, Cook said that wasn’t guaranteed and the company would continue to look at adding carriers on a country-by-country basis.
* The iPad data pricing plan from AT&T is “revolutionary,” said Cook. He compared AT&T’s data plans ($30 a month unlimited; $15 a month for 250MB — no contracts) to data plans for notebooks, which he said are about $60 a month with a contract.
* Cook made a dig at Microsoft. “The Mac OS “allows us to innovate enormously fast with fewer people than if we were geographically north of here,” he said.
* The iPhone is just getting started in the enterprise. Cook said 70% of Fortune 500 companies have deployed or are testing the iPhone. Apple saw a huge uptick in interest from corporate customers after adding enterprise features to the iPhone software, especially version 3.0.
* The Mac is also making a big splash in business. The Mac is riding a “mega trend” of CIOs allowing employees to choose their own computer. “It’s amazing how many CIOs are visiting Apple and are interested in the Mac,” Cook says. In the past, CIOs thought standardization was the most important thing, but are now thinking that creativity is key and are letting employees choose what platform to use. “This is an enormous megatrend that’s postiive for Apple,” Cook said.* Cook noted that the consumer market is much bigger than enterprise. Enterprise is 10% of the PC market, while consumers is 50%. “Our heart and soul and DNA is in consumer,” Cook said. “And now consumers want to use Macs in the enterprise space.”
* Apple will open up to 50 stores this year in prime locations, which have become available thanks to the cratering economy. Cook said Apple has been opening stores at a rate of about 25 to 50 new stores a year. “We like that pace,” he says. In 2008, when the economy started to fall apart, Apple made a “strategic call to slow down,” knowing a lot of properties would be coming onto the market.” As a result, Apple will be opening a lot of top notch stores this year. “These stores are among the best we’ve ever done,” Cook said. Among them are new stores in Shanghai (“mind-blowing”) and London (“will also drop your jaw”).
* The new A4 processor in the iPad was designed for miniaturization and low heat, Cook said. Being a bit vague, Cook said designing silicon was a long-standing tradition at Apple (going back to the PowerPC). Cook said when looking at the iPad and future products, Apple felt it could do a better job of miniaturization and “thermal characteristics” than buying something off the shelf.