Tim Cook speaks on labor, cash and culture during Goldman Sachs conference (Update)
Tim Cook presented remarks at a Goldman Sachs Technology Conference on February 14, and it turned out to be a quite lively affair. Cook opened up on a diverse array of topics ranging from Apple's commitment to improving working conditions at its suppliers all the way to what sounded to us like choking back comments on the next-gen Apple TV.
Mac Rumors has an impressive word-for-word transcript of the entire event, and it's definitely reading through the entire thing. We've reprinted some choice excerpts below. Apple may post a podcast of the event on iTunes later; if it does post it, it's worth listening to not only for the fascinating content but also to hear Tim Cook sounding the liveliest and most animated he's sounded since taking over as Apple's CEO.
On Apple's commitment to worker rights:
- We think the use of underaged labor is abhorrent. It's extremely rare in our supply chain, but our top priority is to eliminate it totally. We've done that with our final assembly and we're now working with vendors farther down in the supply chain. If we find a supplier that intentionally hires underage labor, it's a firing offense.
- We don't let anyone cut corners on safety. If there is a problem on safety, we seek out the foremost experts and set a new standard and apply that to the entire supply chain. We focus on the details. If there is a fire extinguisher missing from a cafeteria, that facility doesn't pass inspection until that fire extinguisher is in place.
- We are continuing to focus on problems endemic to our industry like excessive overtime. Our code of conduct has a cap of 60 hours per workweek [...] In January, we collected weekly data on over a half million workers in our supply chain. We had 84% compliance. This is significantly improved from the past, but we can do better. We're taking the unprecedented step of reporting this monthly on our website, so it's transparent to everyone what we're doing. (emphasis added)
On the iPad and the PC market:
- We started using it at Apple well before it was launched. We had our shades pulled so no one could see us, but it quickly became that 80-90% of my consumption and work was done on the iPad. From the first day it shipped, we thought that the tablet market would become larger than the PC market and it was just a matter of the time it took for that to occur. I feel that stronger today than I did then.
- As I look out and I see all of these incredible usages for it, I see the incredible rate and pace of innovation, and the developers -- If we had a meeting at this hotel, and we invited everyone doing cool stuff on PC, we wouldn't have anyone here. If you invited everyone working on iOS or on that other operating system, you wouldn't be able to fit everyone! That's where the innovation is!
On competition and cannibalization:
- Price is rarely the most important thing. A cheap product might sell some units. Somebody gets it home and they feel great when they pay the money, but then they get it home and use it and the joy is gone. The joy is gone every day that they use it until they aren't using it anymore. You don't keep remembering "I got a good deal!" because you hate it!
- The customers that we're designing our products for are not satisfied with limited function types of products. I think the real catalyst of the tablet market will be innovation and pushing the next frontier. Honestly, we'll compete with everybody. I love competition. As long as people invent their own stuff, I love competition. (emphasis added)
- I don't predict the demise of the PC, I don't subscribe to that. Given what we've seen, I believe the iPad is cannibalizing some Macs but more PCs. There are more of them to cannibalize than Macs so thats a plus to us.
On Apple's cash pile:
- I think everyone would want us to be deliberate and really think it through. That's what we're doing. We're not going to go have a toga party and do something outlandish. People don't have to worry that it's burning a hole in our pocket.
- It's not new that we're discussing [dividends]. We are discussing it more and in greater detail. The balance has risen to the point you've made and I think it's clear to everyone and I'd be the first to admit that we have more cash than we need to run the business on a daily basis. I only ask for a bit of patience so we can do this in a deliberate way and make the best decision for the shareholders.
On the Apple TV:
- It's clearly ramping, but the reality -- the reason we call it a hobby -- we don't want to send a message to our shareholders that we think the market for it is the size of our other businesses. The Mac, the iPad, the iPod, the iPhone. We don't want to send a signal that we think the length of that stool is equal to the others. That's why we call it a hobby.
Apple doesn't do hobbies as a general rule. We believe in focus and only working on a few things. So, with Apple TV however, despite the barriers in that market, for those of us who use it, we've always though there was something there. If we kept following our intuition and kept pulling the string, we might find something that was larger. (emphasis added)
- We need something that could go more main-market for it to be a serious category.
Note: It doesn't come across so much in the transcript, but on the call itself Cook was being very cautious and deliberate in his choice of words when discussing the Apple TV. Everyone at TUAW listening in on the call could tell he was holding something back here.
On Siri and iCloud:
- They're not something we run P&L's on, we don't believe that. We run the company from the top and don't worry about the iCloud team or Siri team making money.
Both of these things go in the profound category. They're things that you'll talk to your grandkids about that are profound changes.
On the "Apple Culture":
- Apple is this unique culture and unique company. You can't replicate it. I'm not going to witness or permit the slow undoing of it. I believe in it so deeply.
- We should only go into markets where we can make a significant contribution to society, not just sell a lot of products. These things, along with keeping excellent as an expectation, these are the things that I focus on.
- I want to look out at an audience and see people using iPhones and see people using iPods at the gym, or going to Starbucks and seeing people use the iPad. These are the things that bring a smile to my face. There is no substitute for that.
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