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Old Jan 23, 2013, 05:02 PM   #1
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Tim Cook on Defending Marketshare, Product Pipeline 'Chock Full', Apple TV Growth




During today's Q1 2013 Financial Results conference call, Apple CEO Tim Cook fielded questions about Apple's results and plans. As usual, Apple was unwilling to provide any specific details about their future plans.

Cook was asked about the importance of market share preservation and whether or not holding their smartphone marketshare was a priority in 2013:
Quote:
The most important thing to Apple is to make the best products in the world. We aren't interested in revenue for revenue's sake. We could put the Apple brand on a lot of things and sell a lot more stuff. We only want to make the best products. We've been able to build market share and have a great track record with iPod of doing different products at different price points. I wouldn't view those as mutually exclusive as some might. We're focused on making great products that enrich lives.
As for Apple's plans for 2013, Cook, as usual, acknowledges that Apple is working on a number of new products and he shares his optimism on those:
Quote:
We're working on some incredible stuff. The pipeline is chock full. We feel great about what we've got in store.
With regard to the Apple TV, Cook reiterated it was an area that they had intense interest in:
Quote:
This is an area of intense interest for us and remains that. I tend to believe that there is a lot we can contribute in this space and we continue to pull the string and see where it leads us. Don't want to be more specific.
Cook also revealed that the Apple TV had sold over 2 million units this past quarter -- 60% year over year.

Finally, Cook emphasized that they felt that the "halo" effect was still in full force. As customers buy one Apple product, they tend to buy more.
Quote:
"The other thing for us, maybe not for others, if somebody buys an iPad mini and it's their first Apple product, we have great experience through the years -- if someone buys their first Apple product, these people buy another Apple product. It's the halo effect, as we termed it, that we saw with the iPod and the Mac -- we've seen some of that with the iPad as well. I see it as a huge opportunity."
Article Link: Tim Cook on Defending Marketshare, Product Pipeline 'Chock Full', Apple TV Growth
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Old Jan 23, 2013, 05:06 PM   #2
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Biggest lie ever.
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The most important thing to Apple is to make the best products in the world. We aren't interested in revenue for revenue's sake
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Old Jan 23, 2013, 05:08 PM   #3
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Biggest lie ever.
+1. The whole point of a company is to make profit
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Old Jan 23, 2013, 05:10 PM   #4
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Don't Keep Us Waiting Tim

Let us have it!
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Old Jan 23, 2013, 05:11 PM   #5
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He said revenue, not profit.

And what he says is right - Apple could make a ton more revenue / market share (but not profit) if they were as willing as other companies to forego good products and just produce as many different things as they could.
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Old Jan 24, 2013, 04:37 AM   #6
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He said revenue, not profit.

And what he says is right - Apple could make a ton more revenue / market share (but not profit) if they were as willing as other companies to forego good products and just produce as many different things as they could.
There's always temptation for a company with a hard-won reputation for quality products to go after the low-hanging fruit by badging a bunch of whatever products people buy because of the nameplate. Some of it is products still at high prices, but which don't really meet the standards for usefulness their best ones do and so would've been better unreleased. Another is to go downmarket and sell cheap versions of existing lines.

Investors and others put pressure for "growth, growth, growth," and within companies ambitious people want to expand their divisions to advance their own interests.

I remember the steep erosion in the aura of quality that used to surround Sony when they began selling "value-priced" audio and video gear, e.g., $10 ear buds with cables that would break in a week. Real junk that depreciated their brand image, and therefore the value of the brand itself.

Both have worked to restore the prestige of their brands in specific categories, e.g., both have highly-rated cameras these days. But neither badge truly evokes the sense of something special across the board they had before they sold out.

The worst thing Apple could do is enter "a race to the bottom of the barrel," however profitable it might be in the short run.

All their strategic efforts are best aimed out continually inventing new products "people never knew they needed" until they were unveiled at a keynote....
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Old Jan 23, 2013, 05:14 PM   #7
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+1. The whole point of a company is to make profit
Jobs always said Apple main objective is not to make money.
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Old Jan 23, 2013, 05:33 PM   #8
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Jobs always said Apple main objective is not to make money.
Of course he did - What do you think he'd say? That the purpose of Apple is to squeeze the disposable income out of Americans?
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Old Jan 23, 2013, 05:35 PM   #9
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Of course he did - What do you think he'd say? That the purpose of Apple is to squeeze the disposable income out of Americans?
Sorry. But this is great.

Made my day. Thanks !

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Old Jan 23, 2013, 05:21 PM   #10
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+1. The whole point of a company is to make profit
No, it's the whole point for the shareholders. It's only part of the point for CEO's (at least some of them anyhow).
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Old Jan 23, 2013, 05:24 PM   #11
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got no complaint


only one

Make sure iOS get revolutionised
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Old Jan 23, 2013, 06:07 PM   #12
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If it aint broke...

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got no complaint


only one

Make sure iOS get revolutionised
Have a look at how "wonderfully well" Microsoft have "revolutionised" Windows with Win8.

I'd much rather the incremental changes we get with iOS and MacOS thank you very much.

Change for change's sake is not good.

If you want constant newness, jump to Android and play in their pool. I dipped my toe there and jumped back out again. It's for tinkerers and non-thinkers who just want a cheap product. Google have played a smart game letting multiple vendors, who had little choice, to use their "open software". We got cheap products. But we also got a cheap experience on many (not all) devices. There are some shockingly awful budget tablets out there. Give me the "walled garden" keeping things under reasonable control any day. And universal OS updates for the last few gens of hardware all on the same day, not at the carrier or manufacturer's whim.
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Old Jan 23, 2013, 05:28 PM   #13
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Originally Posted by mrsir2009 View Post
+1. The whole point of a company is to make profit
This was what they taught in business schools 20 years ago. What they teach now is Stakeholder Theory. A business exists to meet the needs of all the stakeholders which include shareholders, employees, customers, the community, etc. Not all stakeholders get the same priority, but managers have to balance the needs of all those people. So, I wish people would give the old "we exist only to make money" thing a rest. Granted, if a company is not profitable it simply fails. But good management requires a balancing of many constituencies.
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Old Jan 23, 2013, 07:31 PM   #14
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This was what they taught in business schools 20 years ago. What they teach now is Stakeholder Theory. A business exists to meet the needs of all the stakeholders which include shareholders, employees, customers, the community, etc. Not all stakeholders get the same priority, but managers have to balance the needs of all those people. So, I wish people would give the old "we exist only to make money" thing a rest. Granted, if a company is not profitable it simply fails. But good management requires a balancing of many constituencies.
Great post. I work for an organizational development company, and I got a master's degree in the subject a few years ago. It's what my company believes, and it's what I was taught in grad school. Far too many posts on these forums devolve into simplistic "greedy corporations vs. screwed consumers" tirades: "All Apple wants to do is make profits, and we're forced to buy their over-priced prodcuts." I rarely hear the converse: "I'm a consumer, and all I care about is getting as much as I can while paying as little as possible." Or, "I'm an employee, and I care nothing about my work or doing a good job. I just want to make as big a paycheck as possible while putting forth as little effort as possible." I'll grant that some individuals, and even some companies, care only about making a buck, just as some consumers are thieves, and some employees are lazy and take no pride in their work. Some people and some companies (and, lest we forget, companies are composed of people) do get away with it and do get rich. For long-term success, though, companies generally have to offer products or services that consumers find valuable, and most employees take pride in their work and want to feel that they earn their paychecks. Apple isn't perfect, nor are the people who run it or have run it in the past, but, in general, they've always made great products. That's why they've been so successful.
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Old Jan 23, 2013, 08:23 PM   #15
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Quote:
Originally Posted by mrsir2009 View Post
+1. The whole point of a company is to make profit
According to Peter Drucker: "The purpose of a business is to create a customer." I think that's what Mr. Cook is talking about.
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Old Jan 24, 2013, 06:41 AM   #16
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Originally Posted by mrsir2009 View Post
+1. The whole point of a company is to make profit
Wrong. The point of a company is to create something of value for customers in exchange for money. Making profit is a result of getting that right.

Tim is absolutely right to assert that it is about making the best products as that is the purpose of the company. The profit is the result they want to obtain from doing that right.
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Old Jan 24, 2013, 07:02 AM   #17
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Wrong. The point of a company is to create something of value for customers in exchange for money. Making profit is a result of getting that right.

Tim is absolutely right to assert that it is about making the best products as that is the purpose of the company. The profit is the result they want to obtain from doing that right.
Apple, like all other companies, wants to make the cheapest possible product, and sell it to you for the greatest profit, what, however, apple has managed to do is invest in a pretty shell for its products that add a perceived value to the consumer, the components are still the same components you get in your Dells or HPs or Samsungs or Acers , but they are in a case that makes them LOOK well built.

Net result, Apple can charge a LOT more and sell you the same goods you can buy elsewhere, cheaper, because you want to own the shiny shell.

Apple gets a LOT more profit per unit, still selling the same innards as its competitors.

Kudos for apple for playing the system well.
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Old Jan 24, 2013, 09:15 AM   #18
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Originally Posted by Nightarchaon View Post
Apple, like all other companies, wants to make the cheapest possible product, and sell it to you for the greatest profit, what, however, apple has managed to do is invest in a pretty shell for its products that add a perceived value to the consumer, the components are still the same components you get in your Dells or HPs or Samsungs or Acers , but they are in a case that makes them LOOK well built.

Net result, Apple can charge a LOT more and sell you the same goods you can buy elsewhere, cheaper, because you want to own the shiny shell.

Apple gets a LOT more profit per unit, still selling the same innards as its competitors.

Kudos for apple for playing the system well.
I have a 2008 MBP that is still going strong while my wife's Dell and my daughter's ACER have both long ago taken a dump. And you are incorrect that it's the same components as other computers. They may source from some of the same companies (Intel, Qulacom, etc.) but if you really think that the internal build quality of a Mac is the same as other PC vendors, then you clearly have never actually owned a Mac.
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Old Jan 26, 2013, 01:33 AM   #19
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Originally Posted by hackjo View Post
Wrong. The point of a company is to create something of value for customers in exchange for money. Making profit is a result of getting that right.

Tim is absolutely right to assert that it is about making the best products as that is the purpose of the company. The profit is the result they want to obtain from doing that right.
What, it's not better to be like HP and Dell and chase every penny and devalue your brand to the point of comedy?

It's not just about grabbing share and revenue. Companies that believe that tend to make a lot of crap with occasional quality.

I'd rather Apple stick to the limited product line, limited release schedule where the goal is good products are priority one.
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Old Jan 24, 2013, 08:15 AM   #20
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+1. The whole point of a company is to make profit
You're projecting your views towards others and assuming they think how you think. Your comment only tells us about you, not about Apple.

While they will make money on the product lines they choose to develop, the goal is not to make money, but to make a good product. This shows in the quality of the products they produce. How is it that you don't see that? All you need to do is go pick up some Android phones and you will see the difference between a company that is profit focused and one that is quality focused. You will see the same thing in the entire Apple product line. Compare them to the competition and you'll see who is focused on making YOU a good product.

Profit focused companies don't use the kind of packaging that Apple uses. Profit focused companies don't use the quality of components that Apple uses. Just look at the quality of your iPhone charger compared to other cheap chargers. They could get by with less but choose not to. Why would they do that?
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Old Jan 24, 2013, 04:08 PM   #21
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Originally Posted by mrsir2009 View Post
+1. The whole point of a company is to make profit
1. Companies are run by people. The goal of those people is quite often not making the biggest possible profit for the company.

2. In the computer business, and in many other businesses, it has been shown that making decisions solely looking at profit will damage the business in the long term. If you set the company goal "we want to make as much profit as possible" and act on it, it will end in tears. Since the first iMac, Apple has consistently worked to give customers the best possible products, built and sold with decent profit. And trying to achieve this goal, not the search for profit, has made Apple the most profitable company in the world, with their last quarter being the most profitable ever.


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if you think that a macs build quality is superior, then you need your head examined, its made from the same parts, sourced at the same locations as everyone else
Try the 15" Retina MacBook Pro. Just try it. Then go back to whatever laptop you are using that is made from the same parts, sourced at the same locations, and whenever you use it, you feel the pain in your heart.

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Old Jan 26, 2013, 01:47 AM   #22
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Originally Posted by gnasher729 View Post
1. Companies are run by people. The goal of those people is quite often not making the biggest possible profit for the company.

2. In the computer business, and in many other businesses, it has been shown that making decisions solely looking at profit will damage the business in the long term. If you set the company goal "we want to make as much profit as possible" and act on it, it will end in tears. Since the first iMac, Apple has consistently worked to give customers the best possible products, built and sold with decent profit. And trying to achieve this goal, not the search for profit, has made Apple the most profitable company in the world, with their last quarter being the most profitable ever.




Try the 15" Retina MacBook Pro. Just try it. Then go back to whatever laptop you are using that is made from the same parts, sourced at the same locations, and whenever you use it, you feel the pain in your heart.
Your post is partially correct. There are two ways of making a profit. One way is to just focus on costs. Essentially, that involves milking an existing revenue stream for profit. That will most certainly lead to unfavorable results.

The other way is to look for ways to both grow revenue and cut costs.

Apple aims to make a profit as any business should, except that they don't just focus on cost-cutting. They focus on growing revenue and cutting costs.

----------

Quote:
Originally Posted by CalgaryTechGuy View Post
Exactly.

You know the funny thing is, if you make a great product, making a profit is much easier.

----------



And this is the problem with the stock market, the average investor doesn't know the difference between revenue and earnings.
Tell me about it. I posted on a different thread about this very issue. There are many articles talking about how Android is beating Apple, and that has probably been a factor in the declining stock price.

But when one looks at the hard numbers, a different picture emerges. What should be of paramount importance to an investor is the ability of a company's business model/strategy to generate cash flow.

IMO, Apple's iOS strategy demonstrates greater cash-flow generating potential than Google's Android strategy.

Many Wall Street analysts are saying Apple needs to introduce a low-cost iPhone in order to take on Android better, particularly in China. Their argument is that Apple ought to grow their market share in this region.

It's likely that the stock price would be much higher than it is today if Apple were to do this. But frankly, these Wall Street analysts' armchair CEO behavior fails to take into account the fact that Apple will earn less profit per phone with this "cheaper iPhone" even though they'll have more market share. Lower profit impairs the potential of Apple's product lines to generate cash.

Disclosure: I am long Apple.
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Old Jan 25, 2013, 06:51 AM   #23
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+1. The whole point of a company is to make profit
Exactly, but hardly confusing. There is a very important difference between revenue (total cash in) and earnings/profit (total cash in - total cash out). OK, this is a gross simplification but something important to bear in mind.

On top of the cash in/cash out calculation on current operations, the value of assets needs to be taken into consideration, with depreciation/amortisation affecting the profit (but not the revenue).

Finally, Apple has a very important intangible asset that is not really reportable in financial reports, and that is its brand. Apple could easily increase profit in any one quarter - or even year - by selling cheaper but less good Apple-branded gear. But it wouldn't be worth it if it reduces the value of the brand and thus the ASP of future Apple products.

As an Apple stock holder, I am very happy with the way the company is going apart from the bad publicity surrounding Maps being released before it was ready. Apple has always been severely undervalued apart from a few months this summer when it was slightly undervalued - it looks like we're returning to the old days of severely undervalued. I bought my first tranche of Apple stock a little under 4 years ago at $110 (Apple's cash pile alone is now worth over $140 per share) and will be buying more when the current bear run bottoms out.
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Old Jan 23, 2013, 05:10 PM   #24
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Biggest lie ever.
Can you help me get a job as a paid shill for Google or Samsung? If so, PM me.
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Old Jan 23, 2013, 05:11 PM   #25
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Can you help me get a job as a paid shill for Google or Samsung? If so, PM me.
You're saying that Apple's mission is NOT to make money, and it's all about making good products? That's ridiculous. Yeah they make good products, but that's in the pursuit of making money.

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