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Cook: The only thing Apple won't do is release a lousy product

Lex Friedman | Feb. 13, 2013
Apple CEO Tim Cook spoke Tuesday at the Goldman Sachs technology conference.

Market share and share alike

Cook dismissed fears that Apple could be reaching its limit on iPhone market growth. "The people I work with don't view that there are limits," he said. Apple makes products that "people didn't know they wanted, and now can't live without."

He said that the smartphone market is projected to double in the next four years, from around $700 million to $1.4 billion. "On a longer term basis," Cook said, "all phones will be smartphones, and there's a lot of people in the world--and people love to update their phones fairly regularly." He added that the iPhone is currently still only available to about half of the world's potential smartphone customers.

"I see a market that is incredible to be in--maybe one of the best markets of all time," Cook said. "Apple has enormous momentum."

Taking stock

Addressing critics who complain about Apple's massive cash stockpile, "Apple doesn't have a Depression-era mentality" with its cash hoard, Cook said. Rather, the company "makes bold and ambitious bets on products, and we're conservative financially."

Cook said Apple uses its cash to invest in retail and acquire companies. He added, "We invest in product innovation, in R&D, and in new products." And he pointed to the $45 million Apple's returning to shareholders via dividends and buybacks. "I don't know how a company with a Depression-era mindset would have done all those things."

In the talk's biggest understatement, Cook said: "Now, we do have some cash. But it's a privilege to be in this position."

He addressed the ongoing Greenlight Capital issues, describing that group's current proposal regarding Apple's stock as "creative." Said Cook: "We welcome all ideas from all of our shareholders, including Greenlight. And we're going to thoroughly consider it."

That said, he thinks investor concerns about how Apple spends its cash are off the mark. "I wish everyone involved would take the money" they're spending on the ongoing shareholder legal wranglings, and "put it towards a worthy cause," Cook said. But he promised: "You're not going to see us do a campaign mailing. You're not going to see a 'Yes on 2' sign in my backyard."

Acquisition decisions

"If you look at the last three years, we've averaged about an acquisition every other month," Cook said. "The kind of companies that we've purchased have been companies where they have really smart people, and/or [intellectual property]."

As to why Apple hasn't moved to acquire more large companies with its cash on hand, Cook said that Apple's willing to make such an acquisition, but that no potential target has yet been able to "pass our test, for various reasons. And we've looked at more than one."


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