Tim Cook Says Apple Products 'Change the World' and Aren't Priced Just 'For the Rich'

[johngordon]

Next day: announces $1000+ smartphone

One billion people have a $1000+ smartphone? That's incredible!

You seem to be confused. Cook said that Apple don't just make products for the rich, not that Apple don't make any very expensive products.

This is why, for example, lots of students have Apple laptops, but don't necessarily have a $3,000+ Mac.

But hey - why let common sense get in the way of a flippant cliche?

 

[Essaux]

The pricing doesn't bother me. They do make premium products and for that one pays the price.

However, this whole changing the world stuff is what irks me.

Change the world by paying your labor force assembling the phones more money. By moving production back to the US. Let's start there Timmie.

 

[Falhófnir]

Well, no, that's not true and it's easy to verify.

It's significantly faster than the iPad 2, about 1.5x, in all but multi-core geekbench (no surprise, given the core count) where it draws level.
Better battery life too.

http://www.macworld.co.uk/review/ipad/new-ipad-2017-review-3656385/

Compare Geekbench to MacWorld's own 6s review and you'll see they're pretty much within margin of error, or at least near as doesn't matter. I even used the figures from the 6s+ to make it a fairer fight.

http://www.macworld.co.uk/review/ip...y-uk-geekbench-benchmark-audio-cheap-3623611/

Geekbench
iPad Air 2: 1823
iPad 2017 Single Core: 2359
iPhone 6s Plus Single Core: 2527

iPad Air 2: 4343
iPad 2017 Multi Core: 4340
iPhone 6s Plus Multi Core: 4407

Same story in graphics performance, all sourced from the above URLs. In fact, here the iPad 2017 pretty much destroys the Air 2 and beats the 6s handily too in the T-Rex test, though can't keep pace in Manhattan.

GFXBench Metal T-Rex Onscreen
Pad Air 2: 41.6 fps
iPad 2017: 56.1 fps
iPhone 6s Plus: 38 fps

GFXBench Metal Manhattan Onscreen
Pad Air 2: 29.3 fps
iPad 2017 Single Core: 28.6 fps
iPhone 6s Plus Single Core: 37 fps

Odd to make such a specific claim that's so easily refuted.

I'd say it's fair to say it has more in common with a 6s.

Well, that's all fine, yes performance is on a par with what you'd expect from an a9 based device but again you're missing the point, I was talking about the general components that make up the device, which are identical to an iPad Air, except Chip, Touch ID home button and wifi radio. I never disputed that the device was based on more powerful silicon...

 

[Robstevo]

in Canada, the iPhone X, if really priced at 999USD, will likely be closer to $1500 CAD.

that's insane for a phone.

Same in Australia, although I suspect it will be 1600 dollars.

The new note costs 1500aud!

These phone prices are getting ridiculous. The only market where the prices are going up the more mature the market is gettingZ which is bizzare.

Most of the time with technology the more mature the tech gets, the cheaper it gets ect

The phone market is extrely mature now. Yet prices are still going up
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The pricing doesn't bother me. They do make premium products and for that one pays the price.

However, this whole changing the world stuff is what irks me.

Change the world by paying your labor force assembling the phones more money. By moving production back to the US. Let's start there Timmie.

They don't make premium products though. They make phones out of the same material 100 dollar phones are coming out with.

 

[WatchFromAfar]

I think Tim could have worded this better by saying "each of our products is a good long term investments. Its value is high yes, but we have never been about cutting corners here, its not in our DNA. When I see someone still using an iPhone 5s thats what I mean". It would sound less out of touch.

I agree with what you're saying but take issue with that "(its not )in our DNA" part. That "DNA" non-sense has been put forward as an argument for doing, or not doing business decisions for too long now.
"Music; it's in Apple's DNA"
"It's in Apple's DNA that technology isn't enough"
All that is rubbish; are Apple engineers born with a pre-disposition towards a certain way of making things to sell to other humans. People put too much faith in these people; they are not Gods but mortal like the homeless guy in the street.

 

[MH01]

Would you pay tax if you didn't have to pay them? Or do you send in extra now?

A couple of things.

No one pays extra.

Would I partake in evasion or avoidance , that is another question .

So my question to you, would you cheat in sport to win? If you knew you could get away with it , due to a technicality in the rules? If you did that says more about your character than the rules.

 

[recoil80]

Take a shot each time you hear one of these words spoken during the 09/12 announcements:

- Terrific
- Amazing
- Magical
- Stupendous (take 2 shots)
- Aluminium
- Inspiring
- Precision
- Precise
- Excellence
- Special
- Laser
- Great
- Ultra-fine
- Redefine(d)
- Meticulous
- Miraculous

You forgot "only" or "just" followed by a price, and of course "best iPhone we've ever made", that's an evergreen.

 

[Carnegie]

A couple of things.

No one pays extra.

Would I partake in evasion or avoidance , that is another question .

So my question to you, would you cheat in sport to win? If you knew you could get away with it , due to a technicality in the rules? If you did that says more about your character than the rules.

What does Apple do with regard to taxes that's comparable to cheating in sport?

As for you partaking in avoidance (evasion is not at issue here), do you not follow the tax rules which allow you to pay less taxes? Take deductions? Claim credits? If you own stocks, do you pay income taxes on the profits made by the corporations you own shares in before those profits are distributed to you? You likely pay taxes on dividends paid or capital gains from selling shares. But do you also pay taxes (yourself, in addition to what the corporation pays) on its undistributed profits?

 

[I7guy]

A couple of things.

No one pays extra.

Would I partake in evasion or avoidance , that is another question .

So my question to you, would you cheat in sport to win? If you knew you could get away with it , due to a technicality in the rules? If you did that says more about your character than the rules.

Is that cheating evasion or avoidance?

 

[Carnegie]

"Well it's not high margin. I wouldn't use that word."


Gross Profit Margin (Quarterly) of 38.51%...That's decidedly high for tech, only Intel and sometimes Nvidia play in that field. Sure if you look at clothing or something, you'll find much higher margins, but also for much cheaper products.

Is there an iPad for under 300? The 2017 ipad is 329 and the Mini is 400, what is he talking about? I guess the Mini 4 from the refurb store, the 329 iPad isn't there yet.

Still waiting on rMBP pricing to return to normal though...

Only Intel and Nvidia in tech? What about Samsung or Huawei, among others?

A lot of people mistakenly believe that Apple's great profits come from unusually high gross margins on premium products. But that isn't the case. Its great profits come, in large part, from (1) great operational efficiency and (2) selling so many premium products (the kind for which they, and others, see high gross margins).

Other companies have comparable gross margins on comparable products. They just don't sell as many (or as much worth) of those products. Apple sells those premium products in staggeringly high volumes. (It also has very successful direct distribution channels which, in a number of ways, allows it to keep a larger share of retail price of those products for itself rather than having to share more with third-party retailers.) Selling such products in such high volumes creates great leverage on operational expenses. That combined with it being an incredibly well run company yields very high operating margins and great profits.

Other companies have comparable (and sometimes better) gross margins - overall and, in some cases, with regard to comparable products. The separation comes in their respective operating margins.

 

[Radon87000]

Said the guy who champions the $750 S8 and $950 Note 8 constantly.

And how many accessories and extras are shipped with the Note 8? Will Note 8 price stay at 950 2-3 months down the line?

 

[atmenterprises]

A couple of things.

No one pays extra.

Would I partake in evasion or avoidance , that is another question .

So my question to you, would you cheat in sport to win? If you knew you could get away with it , due to a technicality in the rules? If you did that says more about your character than the rules.

Still trying to figure out what cheating has to do with this. Apple utilizes the laws in place to pay as little as possible in taxes, just like any smart person would do.

 

[Carnegie]

Well rich to TIM is someone who makes Billions of dollars a year.
For the average joe like most of us Rich is someone who makes over 100K/year.
SO ya to Tim everyone can afford them.

I don't think most people, in the U.S. at least, would consider someone making over $100,000 a year rich. In many areas that would mean they were doing pretty well. But that doesn't mean they're rich. There's a wide range between being poor and being rich. Even if we did consider someone making over $100,000 a year to be rich, there are lots of people making far less than that who own Apple products.

That said, I think Mr. Cook is right on both points (from the OP title). Most of the people I know who own Apple products aren't rich. And based on the number of units (or, e.g., iPhones) that Apple sells, it's safe to say that most of them aren't being sold to rich people. Apple makes, mostly, premium products and prices them accordingly - and such that more than just the rich can buy them, at least some of them.

When we consider how important a smartphone is in people's everyday lives, the prices paid for them (even for premium models) doesn't seem all that high. What other products play such a substantial role in most people's lives? Are as necessary or increase their efficiency as much or provide them with as much entertainment (or whatever they're looking for)? Our homes and our vehicles, maybe a couple other things?

Our smartphones fill so many roles for us - e.g., often they are our main communication devices, our main cameras, our main information conduits, our means of navigation, our means of paying for things, our personal assistants. An amount equivalent to, in the U.S., about a weeks worth of the median household income is not that much for something that plays such an important - and constant - role in our lives. It makes sense that we spend a little bit of money - a week or two or even three worth of income - to get what we consider to be the right product to fill that role.

 

[drzen]

False equivocation. Find me a digital rangefinder with a full frame sensor that takes the stellar M lenses for $1000 and I will give you my car.

I made that analogy to highlight how Leica brings to their target customer an immediate image of a company with certain look, feel, performance to their impeccably engineered products. It is obviously worth that generous premium they charge to their buyers. But the average consumer shopping for a bargain priced "pro" camera sees only hugely diminishing results for the enormous extra cost.

Could Apple and Leica both charge considerably less for their well-engineered products? Of course.

 

[Carnegie]

He makes US$150 million a year now.

if you made $100,000 a year then...

$1000 to t.Cook is like $12.



(based on him making ~$8.5m / year)

He makes considerably less than $150 million and considerably more than ~$8.5 million per year.
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Apple products are for the rich, i you can afford one you are in the top 1% of the worlds earners... you may not be the 1% of the 1%, you may not drive a lambo but you are really ****ing rich. So Tim Cook get off your high horse

How is Apple selling so many units (of, e.g., iPhones, iPads and Macs) if only the top 1% of the world's earners can afford them?

 

[bopajuice]

I recently travelled overseas and visit what many would consider poor countries. But then I saw all the people happily using their iPhones, iPads and even Mac Pro's even though they haven't been updated for so long, they still enjoyed using them. So anyway, I thought well here it is, the proof that Apple isn't just for the rich! I mean these people barely had enough to eat or proper housing, but well that didn't stop their love for Apple products!

I could say the same thing about what I observe here in the USA. I have been through neighborhoods where the homes are falling apart, the yards are full of weeds and broken fences, graffiti, yet I was surprised to see how many of the beat up neighborhoods have brand new Mercedes and BMW's in the drive. This was especially noticable in Southern California. Maybe if people didn't spend all their money on material things they could improve their living conditions. You can't blame Mercedes or Apple for people's priorities, but the cost of their product is separate from the types of people that use them. I still think Apple products are offered at a premium, yet people will find a way. Does not prove their products are priced appropriately.

 

[Mercifull]

Tim Cook on Monday: Apple products aren't priced just for the rich.
Tim Cook on Tuesday: This is the new iPhone X. Prices start from just £1000

 

[dewski]

Yeah Apple's collapsing and on the verge of bankruptcy because he's not catering to the Dollar General crowd.

Its not the dollar general crowd. Its the upper middle class crowd as well. Aint no way I am going to get 2 iphones for the price of 1000 each. I think they may have pushed too far on this one. We will see, I could be wrong. They have to come back down to earth eventually.

 

[Mr. Dee]

I agree with what you're saying but take issue with that "(its not )in our DNA" part. That "DNA" non-sense has been put forward as an argument for doing, or not doing business decisions for too long now.
"Music; it's in Apple's DNA"
"It's in Apple's DNA that technology isn't enough"
All that is rubbish; are Apple engineers born with a pre-disposition towards a certain way of making things to sell to other humans. People put too much faith in these people; they are not Gods but mortal like the homeless guy in the street.

I'm not going into the architecture of their language, but, in this particular case, Tim sounded a bit too out of touch, especially from a state that suffers sever inequality.

 

[WatchFromAfar]

I'm not going into the architecture of their language, but, in this particular case, Tim sounded a bit too out of touch, especially from a state that suffers sever inequality.

You are correct. Apple's PR system should maybe reign him in a little if he's out of touch.

 

[Pilgrim1099]

actually.. if you read the first sentence of the OP :

Apple has ranked third on Fortune's annual list of companies that "change the world" based on the social impact of their core businesses, and CEO Tim Cook sat down for a related interview with executive editor Adam Lashinsky.
​

...you'll see Apple was included on a list of companies that change the world.. and some dude Adam interviewed him about it.
it's not like Cook was giving a speech and uttered 'changing the world'

Oh he did utter it a few times. Not in this interview alone but in the last few times he spoke with the media. The first sentence of the OP don't mean a thing because TC actually did say it himself. It's not about Fortune's annual list. TC once said on keynote a few years ago during the Apple Watch's first unveiling, I quote him from 2015, " Our objective is to change the way people live their lives ".

He uttered that Apple products 'changed the world' around the time when they were doing some PR spin to deflect the criticisms toward their lack of Mac Pros and especially, I believe, his statement on iPad Pro being the laptop replacement. He said this BEFORE the Adam Lashinsky interview occurred. The Fortune list has no meaning nor impact. It's a media opinion piece. Apple has been doing this since 1976, long, long before Cook entered the picture.

If I'm not mistaken, he also did say it again in one on one video interviews with people with disabilities, promoting the aspect of accessibility on Apple's part.

 

[MH01]

Is that cheating evasion or avoidance?

evasion, thats the legal one

 

[pondhopper]

Don't worry, the rest of us will be able to afford them in a year's time when the price bottoms out.
1K today is tomorrows $250.00 resale value.

 

[LordVic]

The phone market is extrely mature now. Yet prices are still going up

This is what's truly bothering me with the current smartphone market. it's no longer a booming market. it's well into maturity. The companies aren't inventing anything new, and everything is generally an iteration on previous technologies. None of these flagship companies are hurting with very safe profit margins, even above and beyond what they're spending in R&D.

in almost every single other market, when these products hit these stages of development where it's mostly iterative changes than revolutionary changes, prices drop. Competition spurs price wars which decreases margins and makes the commodity of the product more affordable. Especially as the market matures, economy of scale also should kick in to further lower costs of production and costs to consumers.

Yet in the smartphone world, unlike almost all other commercial tech, we're seeing year after year prices go up. $650 is no longer flagship territory.

I think if the expected changes today come through, Apple's going to be setting themselves up for one of the worst quarters of iPhone sales in a while (but hey, this is just me being armchair analyst here).

if the iPhone 8 launches with nearly identical hardware as the iPhone 7, but at the same price points (649.99 and 750), current iPhone 7 and 6s users are going to balk. 4 iterations of the exact same design and implementation (yes yes, antenna bands don't make a design different), at the exact same price, without marked improvement, iPhone users are going to question whats the point of upgrading to the 8. Meanwhile, at $1000, for the iPhone X, there are going to be a lot of people who just say that it's out of the question and too expensive.

I think Apple needs to do to the iPhone lineup what they did to the iPad lineup. charge their big premium on the flagship device only. the iPhone X, but move the price of the iPhone 8 to be more accessible. it's no longer their Premium high end device, so dropping it's price to 599, or even $550 would give existing iPhone users some reason to upgrade.

however, one thing we haven't seen much of is iPhone 8 product leaks. Maybe we'll be surprised and it'll get a significant upgrade as well

 

[Pilgrim1099]

I agree with what you're saying but take issue with that "(its not )in our DNA" part. That "DNA" non-sense has been put forward as an argument for doing, or not doing business decisions for too long now.
"Music; it's in Apple's DNA"
"It's in Apple's DNA that technology isn't enough"
All that is rubbish; are Apple engineers born with a pre-disposition towards a certain way of making things to sell to other humans. People put too much faith in these people; they are not Gods but mortal like the homeless guy in the street.

That DNA part needs to go every time Tim and his execs open their mouths. They need to stop rehashing it. When Steve Jobs was alive, this was perfectly acceptable due to his work ethic. I can believe that. But after he left, they kept parroting the DNA part. Also, the DNA part got started by Jobs, not Cook. He wasn't there in the very beginning in 1976. Jobs was.

And that DNA part can die out when Cook leaves. People think he will stay there forever. He won't. What should be more concerning is WHO takes place after Cook goes out the window. That is when and how the DNA becomes preserved or destroyed. If it's Craig, it might be preserved and the 'magic' might be restored. Maybe. He's probably the only one who could do it.

But if it's Jeff Williams the COO, the company is screwed. He's another Tim Cook clone as this is a repeat of the late 80s and early 1990s. I hate to say it but Apple needs fresh blood in the exec levels. BADLY. Scott Forstall's gone and won't return to Apple. Ever. I don't think he would ever want to be in the same room with the execs or Jony Ive. He's probably glad he's out of the Apple board room drama and won't have to put up with their BS.

Do people think that when Cook leaves Apple, he's going to carry the 'DNA' aspect of the company work ethics when he goes somewhere else? I doubt it. It's all about adapting to corporate culture, environment and policies.