It was refreshing to hear a CEO answer a couple of hard-hitting questions without alluding them. There are many who disagree with him—including BlackBerry CEO John Chen—but it’s hard not to admire Cook’s mater-of-fact stance. When asked about handing over information in a criminal case, Cook was resolute in protecting the user: “If the government lays a proper warrant on us today then we will give the specific information that is requested,” Cook said. “In the case of encrypted communication, we don’t have it to give. And so if your iMessages are encrypted, we don’t have access to those.”
There isn’t much of a gray area. Cook outright dismissed the notion of a so-called back door—“The reality is if you put a back door in, that back door’s for everybody, for good guys and bad guys”—and called the idea of privacy versus security “overly simplistic.” “We’re America,” he said. “We should have both.”
When pressed on the issue of taxes—Apple has some $75 billion stashed overseas, and the U.S. government is fighting to force the company to bring back—Cook was just as blunt. He admitted to taking advantage of a legal loophole to avoid the 40 percent penalty and called out Congress for refusing to update a tax code “that was made for the industrial age, not the digital age.” And he called the case against Apple “total political crap.”
The fight is likely to go on for many years, but if the government thinks Apple is going to bow to public pressure, it has another think coming. Cook could have easily taken a broad, political route on such a national stage, but he chose to attack the issue head-on.
Apple has only scratched the surface in China
Over the past several quarters Apple has been enjoying tremendous growth in the Middle Kingdom, and with 1.3 billion inhabitants, it doesn’t take an expert to see that it’s a major market for Apple. But Tim Cook thinks it will eventually become Apple’s biggest: “The numbers tell me that. And not just the numbers of people, but the numbers of people moving into the middle class. That, for a consumer company is the thing that really begins to grow the market in a big way.”
Chinese customers testing out iPads. Credit: Michael Kan
But even more than the growth opportunity, Apple’s manufacturing ties to China are equally important. Cook bumbled through a question about whether cheap labor was the primary reason for building the vast majority of its products in China, citing workers’ skill level as the primary motivator, and he was clearly uncomfortable during that segment of the interview, particularly when asked about the safety and wages of workers.
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