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Cook: The only thing Apple won't do is release a lousy product

Lex Friedman | Feb. 13, 2013
Apple CEO Tim Cook spoke Tuesday at the Goldman Sachs technology conference.

"It seems perfectly reasonably to me to have an iPad and an iPad mini," Cook said. "This is going to be the mother of all markets. I think we did the right thing, and of course are customers are voting and they're buying." And, he said, Apple is still struggling to meet iPad mini demand.

He also said that he doesn't fret over Apple's lower average sales price per iPad with the cheaper iPad mini in the mix. "You can accept a lower margin on any product at any given time, for a strategic reason." He referenced Apple's beloved "halo effect," that customers discover the joy of using one Apple product, and soon buy into the ecosystem even more.

Plus, "We have confidence in our ability to execute the supply chain and work down the cost curve. In the area of tablets, we think the market is huge, and it makes sense to have another product there, because people wanted a full iPad experience, but in something smaller and lighter."

In stores

Cook also said that he remains "bullish" on Apple's retail stores. He said that the Genius Bars serve "an important role in the community," and that they help users get more out of their Apple products.

Cook said Apple's relocating 20 stores to find them bigger spaces this year, and adding 30 new stores as well, "disproportionately outside the U.S." And because Apple only has stores in 13 countries, Cook sees a lot of opportunity.

He also credits Apple Stores with boosting the company's success with new product categories like the iPad. When people thought of tablets before the iPad, Cook said, they were thinking of "the heavy thing that the Hertz guy was holding. Nobody wants one of those!" But the store lets people put their hands on the iPad. "I don't think that the launch would have been nearly as successful without the stores," he said. It gives Apple "an incredible competitive advantage." And he said that competitors are finding that the Apple Store is "not so easy to replicate."

The Apple Store provides a more personal benefit to Cook, too: "If I feel I'm dropping down a level, I go into the store... It's like a Prozac or something!"

What he's proud of

Last year at the same conference, Cook promised Apple would improve working conditions in China, a promise the company has worked to keep with its closer observation of, and public reports about, the overseas companies involved in its supply chain. Cook cited such improvements as one of the things he's proud of at Apple during his short tenure as CEO thus far.

 

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