Apple CEO Tim Cook was a guest at Tuesday’s annual Goldman Sachs Technology and Internet Conference, where he discussed a number of topics, ranging from Apple Pay, to the Apple Watch, to his company’s enterprise partnership with IBM.
Cook began the talk by stressing Apple’s commitment to developing great products, and not worrying about hitting specific sales or financial targets.
“We don’t believe in such laws as laws of large numbers,” Cook said. “This is sort of an old dogma that I think was cooked up by somebody.”
Cook compared the smartwatch market of today to the MP3 marketplace just before Apple’s introduction of the iPod. Cook noted that while not the first company to make a music player, Apple did offer an easier-to-use product that revolutionized the industry.
Cook believes the Apple Watch will see similar success, noting that he uses the Apple Watch “constantly,” and discussed the device’s health benefits, noting that if he sits for more than an hour, the device taps him on the wrist to remind him to get up and move around.
“A lot of doctors believe sitting is the new cancer. If you haven’t moved within the hour, it’ll tap you. You’ll be in a meeting, and we have a lot of employees now that are using the watch, so about 10 minutes before the end of the hour, everybody starts standing up,” Cook said.
While discussing Apple’s new mobile payments service, Apple Pay, Cook noted that adoption of the service was “much faster” than he anticipated, especially since the service’s rollout took place in the period leading up to the holiday shopping season. Cook reiterated Apple’s view that privacy and security are essential, sharing the fact that his own credit has been stolen three times.
“We believe that customers have a right to privacy,” he said. “The vast majority of customers don’t want everyone knowing everything about them. You are not our product. That is our product. There’s no reason why we need to know where you’re buying, what you’re buying, how much you’re paying. It’s none of my business.”
“People were advising us to do something different in China, that people wouldn’t pay for a great product there,” he added. “It’s a bunch of bull. It’s not true. People want a great product. That doesn’t mean every single person in the world can afford one yet, but everyone wants one. There’s a pretty good business for us. We blocked out the noise of everybody saying you’ve got to do this or you’ve got to do that.”
Apple’s Capital Return Program
Apple’s capital return program will continue to grow and evolve. Cook said the company reviews the program each year, and will announce an updated strategy during its next quarterly earnings call.
“My view is cash that we don’t need, with some level of buffer, we want to give back,” Cook said.
Apple’s Enterprise Sales Agreement With IBM
Cook discussed Apple’s enterprise sales agreement with IBM, calling the two firms “complimentary.” IBM’s expertise in multiple verticals and large field staff compliments Apple’s consumer products and operating systems.
“We came to the realization that we didn’t know enough about N number of verticals, and we didn’t have all these people in the street,” Cook said.
Cook shared that he believes the Mac still has a bright future, noting the Mac has gained market share for 10 consecutive years, and has grown revenue 5X since the early 2000’s.
Referring to his company’s new Continuity features in both OS X and iOS, Cook said, “We know people want to take calls on their Mac. Even though one is OS X and one is iOS, they work together as one. It’s something that, frankly speaking, only Apple can do. We’re the only company that has a mainstream desktop operating system and a mainstream mobile operating system.”
California Solar Farm
Cook also revealed during the discussion that Apple plans to build a 1,300 acre, $850 million solar farm in California to power all of Apple’s operations in the state, including its corporate headquarters, retail stores, and its datacenter in Newark, Calif.
“We are doing this because it’s right to do, but you may also be interested to know that it’s good financially to do it,” Cook said. “We expect to have a very significant savings, because we have a fixed price for the renewable energy, and there’s quite a difference between that price and the price of brown energy.”