GO
Loading...

Live Blog: Cook Says Apple Does Not Have 'Depression Era Mentality'

Tuesday, 12 Feb 2013 | 11:16 AM ET
Getty Images

Editor's Note: Apple CEO Tim Cook is speaking at the Goldman Sachs Technology and Internet Conference today.

(Read More: Apple's Cook Calls Einhorn Lawsuit 'Silly Sideshow', Says Company's Not Tight-Fisted )

11:15 A.M.: Cook: "I don't have very many bad days, I'm very fortunate from that point of few ... if I'm feeling down ... I go to a store. It's like a Prozac," he said.

11:13 A.M.: Cook: "I don't think we would have been nearly as successful with iPad if it weren't for our stores ... here's a product coming out that was different ... people thought of tablets as a heavy thing that the Hetrz guy was holding .... I don't think the launch would have been nearly as successful without stores that welcomed 4 million people per week," he said.

11:12 A.M.: Apple will be expanding stores, adding 30 more overseas, including Turkey.

Did Apple's CEO Deliver?
CNBC's Scott Wapner provides highlights from Apple CEO Tim Cook's address at the Goldman conference. And Nick Bilton, New York Times, explains why he believes Apple is "still the sexiest" company out there. Also Jon Fortt, weighs in on the IPads' halo effect.

11:11 A.M.: Cook: "I'm not sure 'store' is the right word anymore (for retail)," he said. "They are the face of the company...people don't think about Cupertino anymore, they think about the local Apple Store."

11:10 A.M.: Cook on retail: "There's no better place to discover, explore, learn about our products," he said. (He calls retail staff the most amazing people on Earth. (I thought the engineers were!)

11:08 A.M.: Cook: "There's only one major country where we're not selling movies ....We've got farther to go in some places, but we've really advanced the ball," he said.

11:07 A.M.: Cook: "Last year, we put enormous energy into expanding our ecosystem geographically (app store, iTunes)," he said.

11: 06 A.M.: Cook: "We're managing Apple for the long term. I know people care about quarters, and we care," he said. "We don't look at the sale of a product as the last part of our relationship with a customer. It's the first..."

11:05 A.M.: Cook on longer term gross margin trajectory: "I don't want to get into projecting margins beyond what we do in conference calls, but you can accept a lower margin on a given product at a given time for many reasons," he said. "But in the background we know the halo effect plays, we have confidence in our ability to work down costs in the supply chain... because we're not a hardware company, we have other ways to make money and reward shareholders."

11:01 A.M.: Cook's first explicit mention of China and Brazil, which he's said before are the two explosive growth markets.

People buying iPads there don't have other Apple products. (Implied: This will draw them into the ecosystem, because that's what's happened before.)

(Read More: Apple Cash Hoard Is Destroying Shareholder Value: Analyst )

11:00 A.M.: Cook on iPad mini: "The first time I got asked about cannibalization was when Apple came out with the iBook, and people were worried that it would cannibalize the PowerBook .... When we came out with the iPad, people worried it would cannibalize the Mac," he said.

(Implied: Don't worry about margins in cannibalization. As he's said before, iPad mini is more likely to eat into the PC market than the iPad or Mac market)

(Read More: Apple Announces New iPad With More Storage )

10:57 A.M.: (Almost all of this is based on ideas Cook has shared before, on earnings calls.)

10:56 A.M.: Cook points out that Black Friday numbers showed customers used iPads and iPhones to shop far more than their Android counterparts.

"I'm not sure what people are doing with these other tablets," he said.

10:55 A.M.: Cook: "We have a significant lead in the tablet app ecosystem ... you can see the tablet app ecosystem," he said.

"I have no idea what market share is, because we're the only company that reports how many units we sell," he said.

10:54 A.M.: Cook: "The tablet market is a huge opportunity for Apple .... There were more iPads sold than HP sold in their entire PC lineup ... we're in the early innings of this game," he said.

There were 12 million tablets sold last year, the projection is that this will triple in four years, he said.

10:51. A.M.: Cook: The customer experience is always broader than that which can be defined by a simple number.

"The only think we'll never do is make a crappy product ... that's the only religion that we have is we must do something great, something bold, something ambitious ..."

10:50 A.M.: Cook: "With displays, some people are focused on size. There are a few other things that are important. OLED displays, the color saturation is awful. You can't depend on the color of an OLED display. The Retina display is twice as bright as an OLED display." (Arguing against a larger iPhone?)

Pebble Watches Apple's Innovation
CNBC's Scott Wapner reports Apple's Tim Cook is still optimistic about growing the smartphone market. And Eric Migicovsky, Pebble CEO & co-founder, explains why he thinks more consumers are interested in wearable tech devices.

10:48 A.M.: Cook is saying sometimes you can take the issue and you can solve it in different ways. But the North Star for us is always a great product, not how do we hit a price point.

(I wonder if this means Apple will make something that's not a traditional smartphone in order to break into lower price points in emerging markets. Wrist watch?)

(Read More: Disruptions: Where Apple and Dick Tracy May Converge )

10:47 A.M.: "We are making moves, or have made moves to make things more affordable," Cook said.

(Is this a slip where he referred to something Apple is working on when he meant to refer to something Apple has done? Or is he just trying to be clear?)

(Read More: Dear Mr. Einhorn: Here's What Apple's Doing With All That Cash )

10:46 A.M.: Cook on emerging markets: "Our north star is great products. When everyone comes to work everyday they think about that. … We wouldn't do anything we don't think is a great product," he said.

"That said, if you look at what we've done to appeal to people who are more price sensitive, we've lowered the price of iPhone 4 and 4S," Cook said.

10:45 A.M.: Cook talking about "Incredible opportunities in emerging markets."

The iPhone is available to only 50 percent of global subscribers.

10:43 A.M.: Cook: "The people I work with don't view that there are limits" talking about a cap on market share gains for the iPhone

"What I see is a market that last year was around 700 million, it's projected to double in the next four years ... more on a longer-term basis, all phones will be smartphones," he said.

10:41 A.M.: Cook: The smartphone market may be one of the best markets of all time. Over 40 percent of the 500 million iOS devices happened last year.

10:38 A.M.: Reading between the lines, Cook is saying Samsung's innovation center in Silicon Valley won't be successful because they don't have the people, the legacy in integration to pull it off. He's saying that Apple believes in its model as much as ever, even though investors are clearly doubting. Apple won't do quick acquisitions or panic/react.

(Read More: Samsung Emerges as a Potent Rival to Apple's Cool )

10:36 A.M.: Cook: Skills and leadership are prerequisites for innovation ... the model that grew the PC industry where somebody specialized in one thing and someone integrated it later ... isn't working today because consumers want an integrated experience. Apple has the ability ... to innovate like crazy and really cause magic.

10:34. A.M.: Cook: Apple's culture of innovation "has never been stronger" ... it's "deeply embedded" in the value and DNA of the company.

10:33 A.M.: Cook: "We will do more acquisitions like PA Semi, where they complement teams we already have working on things ... we have looked at doing large acquisitions ... they didn't pass our test ... for various reasons. I think we have the management talent and depth to do [a large acquisitions]. We don't feel pressure to just go out and acquire revenue. We want to make great products."

(Read More: Inside the Madness: Why Can Apple Do No Right?)

Shareholders React to Apple's Cash Stash
Eric Jackson, Ironfire Capital, discusses if Einhorn was successful in putting forward the issue of Apple's huge cash reserves, forcing CEO Tim Cook to address the proposal with shareholders.

10:30 A.M.: "We would put preferred stock up for a shareholder vote regardless of whether the charter required it," Cook said.

(Read More: Ouch! Apple Had a Terrible January )

10:29 A.M.: Cook sure doesn't sound like he's going to give Greenlight's proposal a ton of thought, at least the anti Prop 2 part.

"Frankly I find it bizarre that we would find ourselves being sued for doing something that's good for shareholders. ... It's a silly sideshow," Cook said.

(Read More: Cramer: What The Heck Was Einhorn Talking About? )

10:27 A.M.: Cook: We're going to "thoroughly consider" Greenlight's proposal.

Cook: The item at the shareholder meeting is about shareholder rights, not about whether Apple will return cash to shareholders.

(Read More: Apple Pushes Back Against Einhorn Allegations of Cash Hoarding )

10:26 A.M.: Cook: "We do have some cash, but it's a privilege to be in this position ...where we can seriously consider returning additional cash to our shareholders."

10:25 A.M.: Cook: "Apple doesn't have a depression-era mentality" about cash ... Apple makes bold bets, he says. Apple invested $10 billion in capex last year, will do a similar amount this year. (That's important.) ... "We're acquiring some companies," he says, which isn't exactly news.

(Read More: Apple Sends Another Signal Bigger Capital Distribution Is Coming )

10:22 A.M.: Tim Cook is wearing a dark jacket and blue dress shirt. Tim Cook reads the safe harbor statement.

10:21 A.M.: Blankfein is introducing Tim Cook, saying 2012 was the first full year for him as CEO: "I'm sure to Tim it feels a lot longer." Cook laughs as he waits beside the stage.

10:20 A.M.: Blankfein: "I won't take too long, because I know why everyone is here."

10:17 A.M.: Lloyd Blankfein will kick things off in a few minutes. He and Tim Cook are waiting in the wings.

10:14 A.M.: The conference is starting.

Editor's Note: Cook is expected to speak about Apple's capital allocation strategy and possibly even new products.

It's expected Cook won't give too much detail about capital allocation, though. Instead it's expected he will express Apple's willingness to increase dividends and have more buy-backs.

  Price   Change %Change
AAPL
---
GS
---

Featured

Contact Technology

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    › Learn More
  • Matt Hunter is the senior technology editor at CNBC.com.

  • Cadie Thompson is a tech reporter for the Enterprise Team for CNBC.com.

  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.

  • Jon Fortt is an on-air editor. He covers the companies, start-ups, and trends that are driving innovation in the industry.

  • Lipton is CNBC's technology correspondent, working from CNBC's Silicon Valley bureau.

  • Mark is CNBC's Silicon Valley/San Francisco Bureau Chief covering technology and digital media.