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Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

May 29, 2012 at 6:11 PM

D10: Apple’s Tim Cook on iPad vs PC, outsourcing and more

RANCHO PALOS VERDES, Calif. _ Apple Chief Executive Tim Cook said he’s “loving every minute” of his new job and he thinks “everybody at Apple’s loving every minute of it, too.”

Cook – during an interview on stage at All Things D with hosts Walt Mossberg and Kara Swisher – was intensely upbeat, touting Apple’s recent success and teasing that even better things are in the works at its Cupertino, Calif., headquarters.

In a rare quasi-public appearance, Cook declined to preview any new products, but hinted that Apple’s working with Facebook on improving usage of the social network via Apple devices.

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Cook also said he’s not trying to duplicate the visionary role of Steve Jobs, who left a strong team of executives to lead the development of new products. None of which he revealed.

“Never have I seen the things I can’t talk about today – the juices are flowing and we have some incredible things coming out,” he said.

Apple’s under pressure for the working conditions at Chinese factories where it outsources manufacturing. Cook said the company is working to be the most transparent company in the world and is publishing monthly reports on its progress, posting information such as compliance with limits on overtime in the factories.

Asked if Apple would ever resume manufacturing in the U.S., Cook said components such as glass and semiconductors are already manufactured here. One challenge is the decline of tool and die makers in the U.S., he said, noting that all of those companies couldn’t fill the room.

“There has to be sort of a fundamental change in the education system etcetera to bring back some of this but there are things we can do,” he said.

So, Mossberg asked, will Apple device manufacturing ever return to the U.S.

“It may,” Cook said.

Cook earlier drew laughs, joking that “we’ve had a few decent quarters,” before talking about the runaway success of the iPad and its challenge to the PC business.

“I’ve never seen a product in technology that consumers loved pretty instantly and business loved and education loved and people of all ages loved,” he said. “The iPad has just been unbelievable, it’s been a knockout, and I think we’re in the first inning.”

After Cook talked about the iPad potentially surpassing the PC business, Mossberg asked about competition from upcoming Microsoft Windows tablets that have more PC-like capabilities.

In response, Cook stated that they are different products, which is a powerful statement in a tech industry that has increasingly blended the iPad and PC. Some research firms even lump their sales together now.

But combining the products into a single category diminishes the differentiation that Apple has sought to establish with the iPad.

“In my view the tablet and the PC are different,” Cook said. “You can do things with the tablet if you’re not encumbered by the legacy of the PC, if you view it as different. If you take a view that says this is another PC, all of a sudden you’re pulling all of the leg weights of the PC market and you wind up something that may not be that dissimilar to what the tablet was two years ago.”

Cook said Apple “invented the modern tablet.”

“I love convergence and I think convergence is great in many areas but I think products are about tradeoffs, you have to make tough decisions, you have to choose.

The more you look at a tablet as a PC, the more the baggage of the past affects the product.”

Cook also said the tech industry’s patent wars are “a pain in the ass” but Apple will protect its innovation.

“From our point of view it’s important that Apple not be the developer for the world. We can take all of our energy and all of our care and finish the painting and have someone else put their name on it,” he said. “We can’t have that.”

Pressed on why Apple doesn’t produce a lower-priced phone, similar to the way it produces iPods at different price points, Cook said the company didn’t set out to produce a mix of products at different prices.

“Who knows what we’ll do in the future … but on the iPod it wasn’t that we sat around and said we need a $49 one and a $99 one and so forth,” he said. “It was ‘we can do a pretty cool product called the iPod Shuffle.’… So each of the products were great products and the result of that, one of the results, it didn’t start as the objective, but one of the results were we could have different price points.”

“Whenever we can do some fantastic products and they yield different price points we’re all for that,” he added.

Mossberg and Swisher pressed Cook on whether Apple is going to produce TV sets. Cook didn’t answer directly, saying the company’s now focusing on its AppleTV set-top box device.

“We’re going to keep pulling this string and see where it takes us,” he said.

TV “is an interesting area, we’ll have to see what we do,” he continued. “Right now our contribution is Apple TV.”

If Apple were to enter a new business it would consider whether it can control the key technology, make a significant contribution “far beyond others” and make a product that Apple employees want.

“Those are all the things we would ask about any new product category,” he said.

Cook declined to say what the key technology would be in a TV set.

In response to Swisher’s questions about acquisitions, Cook said Apple continues to buy companies for talent but not revenue. It didn’t look at buying Instagram, he said.

“We’re not looking at a big one right now, but I wouldn’t rule it out,” he said.

Mossberg asked about Apple’s relationship with Facebook and why the social networking giant isn’t better integrated into Apple products. Cook hinted that the companies are working together on improvements.

“Stay tuned on this one,” he said.

The interview concluded with questions comparing and contrasting Cook to Steve Jobs. Swisher asked if Cook is a visionary

“Steve was a genius and a visionary,” Cook said. “I’ve never really viewed that my role was to replace him. He’s an irreplaceable person. Steve was an original. I don’t think there’s another one of those being made. I’ve never really viewed or felt the weight of trying to be Steve – it’s not who I am and it’s not my goal in life. I am who I am and I’m focused on that, and being a great CEO of Apple, and it’s incredible everyday to work with what I consider to be the smartest and most innovative people on earth.”

Mossberg asked who curates products, serving as the final arbiter. Cook said there are many experienced people on the executive team.

So, Mossberg asked, it was a myth that Jobs did it all?

“If he was sitting here he would tell you no one person could do it all,” Cook said. “He brought in great people … and set a standard for who they brought in and that built an incredible company. His legacy will be leaving that foundation – his spirit will always be in the DNA of the company. So I wouldn’t get overly focused on who does what piece.”

Asked what convinced Cook to leave Compaq 14 years ago and join Apple, Cook said he was drawn to Jobs independent vision, the striking loyalty of Apple customers and the potential to help Jobs rebuild the company.

“If a customer got angry with a company, they would yell loudly, but they would continue to buy,” he recalled. “At Compaq, if people got angry at Compaq, they would just buy from Dell. At Dell, if they got angry with Dell, they would buy at that time from IBM. People were moving freely to and fro but the Apple customer was a unique breed.”

Cook continued:

“I knew that was different,” he said, “and when I looked at the balance sheet of the company I thought I could add something and participate in turning around what I thought was a great American company.”

Cook appeared after a gospel choir sang and a marching band came through the ballroom at the Terranea resort to celebrate the tenth anniversary of the conference. Taking in the spectacle from the front row was News Corp founder Rupert Murdoch.

Comments | More in | Topics: Apple

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