WHEN: Today, Tuesday, July 15th
WHERE: CNBC's "Closing Bell"
Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Apple CEO Tim Cook and IBM Chairman & CEO Virginia Rometty. Following is a link to the interview on CNBC.com: http://video.cnbc.com/gallery/?video=3000292886.
All references must be sourced to CNBC.
JOSH LIPTON: Well we are here at Apple HQ in Cupertino, California. Just a few minutes ago I had the chance to sit down and talk with Apple's Tim Cook and IBM's Ginni Rometty. Apple and IBM announcing a new partnership today – a new class of business apps that brings IBM's data analytics to iPhones and iPads. Also, IBM will start to sell iPhones and iPads to business clients around the world. I asked Cook and Rometty about this partnership, how it came about. Here's what they had to tell me. Take a listen.
JOSH LIPTON: So Tim, maybe just to start, how did this partnership come about? How long have you and Ginni been talking?
TIM COOK: You know, Ginni and I have started talking-- a couple years ago and getting to know each other. And over that period of time, we built up a tremendous trust and respect for each other. And we began to talk about how complementary our companies are. And so from that, we assigned some teams in both companies to go look at some things we can do together. And this was one of the things that came out.
And I think it's absolutely huge. It's landmarked. It takes the best of Apple and the best of IBM and puts those together. There's no overlap, there's no competition, but they're totally complementary. And more than anything, it focuses on the enterprise customer.
So this is all about transforming enterprise. Reinventing the enterprise. Taking big-data analytics down to the fingertips of people so they can spend their time making complex decisions not running around and around getting data. And so we are just thrilled, I'm thrilled to be working with Ginni. I think-- and more importantly, I think a lot of customers will be thrilled.
VIRGINIA ROMETTY: I know the two of us actually agree very much on the top three things we're going to accomplish together. One is growth for both our companies, but the second thing is this idea that-- we have both-- Tim and I talked often about remaking business and re-envisioning, reimagining professions.
So this is all about unlocking mobility in the enterprise and value that hasn't been there today. And then the third thing we're going to do together is actually addressing the number one inhibitor. And one of the biggest inhibitors has been things like security. And so we're really providing value all the way across those issues.
JOSH LIPTON: And let me ask you Tim, you know, it's obviously a big push here by Apple into the business market. When you think about that, Tim, how big of an opportunity is that for Apple enterprise?
TIM COOK: Well, I think it is big or else I wouldn't be sitting here today. You know, this is a multi-year journey for us. We started investing in iOS back in iOS two, adding enterprise features. Through that period of time, between where we are today, we're in over 90% of the Fortune 500, and over 90% of the Global 500.
But the reality is, that the penetration of these businesses and in commercial in general for mobility is still low. So where we have very good market share the penetration suggests there's a huge opportunity here. And I think if we can bring the kind of transformation we've arguably brought to consumers to enterprise, I think there's a huge opportunity here.
And we knew that we couldn't do that alone. We knew that we needed to have a partner that deeply understood all the different industry verticals that had scale, that had a lot of dirt under their fingernails, so to speak, from really understanding each of these verticals. And we found a kindred spirit in IBM. And I am so happy we did.
Because what I want to see is just like the consumers that write me every day and say, what a difference we've made in their lives, we want to play a part in that in business. And we're doing that to some degree today. But arguably, there is a new level to achieve in business. So I think this is great for Apple and IBM, but more importantly, it's great for customers. And that's why we get up in the morning here.
JOSH LIPTON: And do you think, Tim, just to drill that point, obviously known as a great consumer brand, maybe not as much as a business brand yet, but do you think a partnership like this, with IBM, changes that?
TIM COOK: Well, let me just say this, you know if you are in 90% of the Fortune 500 and over 90% of Global 500, we've got a lot of our products in enterprise. But yes, I think in order to fill out and deliver the promise of mobility in a big way, that takes Apple and IBM doing that.
I think there's no better two people on earth to do this, or two companies on earth to do this. Or for that matter, any number of companies. I think we fit together like a puzzle. And so this is profound. It is landmarked. It's historic. We've come from 30 years ago being competitors to today being incredibly complementary and I think that the people that will really benefit from this are the enterprise customers who can be more productive running their businesses.
VIRGINIA ROMETTY: I mean, if you think about this, what Tim and I have talked often about, and we know enterprise well, as Apple the gold standard for what is out there, what it means to be consumable and in consumer space and us the gold standard in what it means to be in the enterprise. And knowing that while there's deployment in the enterprise of mobility, 60% is for things like email and calendaring.
And then as well, 70% name security is the number one concern. So we're going to take our strengths, as Tim said, these puzzle pieces that go together. We've built a $16 billion business in big data and analytics, married with mobility growing over 70%, a cloud business growing over 70%. Security, strong double digit.
All the shifts you see, and this pulls them all together. And then we put those two gold standards together and really drive, which I've said, we both agreed number one, it's actually bringing, unlocking new value in the enterprise that isn't there today, for lots of professions, lots industries.
JOSH LIPTON: And let me ask you Ginni, obviously you have a range of potential partners you could have gone with. Why Apple?
VIRGINIA ROMETTY: Look, this is, you know, back to our gold standard analogy we both use with each other. So one is the complementary nature of what we both bring. And understanding again those kinds of things that what we built and something we're going to do together as an example, enterprise-grade Apple care. Where for Apple care, legendary in what it does.
But for enterprise clients, onsite, when it comes to security, private cloud, backup, restore, data. And then when you say, "Why Apple," at the end-- the two of us together, this is about something that on a global scale we can both do together to remake how work is really done inside of an industry.
JOSH LIPTON: And Ginni, you know, obviously IBM going through its own transition, that has come with its own set of challenges. How do you think of this partnership in terms of IBM's overall strategy here?
VIRGINIA ROMETTY: Oh, look this is clear and we both agree with this. The industry is reordering itself. It's reordering itself around the trends of big data analytics, around cloud, around engagement, which is mobility. But underpinned with security. And this goes right at the convergence of all of those trends. And so it's a bold move that just further accelerates our growth initiatives, as I know for Tim accelerates his.
JOSH LIPTON: And Ginni, could you give us is there an example of an industry – an industry that would benefit here? An app that you think of?
VIRGINIA ROMETTY: Well, the teams – our teams together and Tim and I have talked about this, and in seeing some of the prototype work, have done a great job, right? These two in fact sort of a side point is what forbodes well for a long-term partnership, the two teams, the engineers, the designers, the consultants, they've worked beautifully together.
And so one of the apps we looked at, think about the airline industry, fuel. Big analytics around fuel. This is taking that, making that a mobile application in the hands of a pilot who makes that final determination before a plane takes off, how much fuel is onboard. This can save 10%, 15% for an airline deployed widely.
And that's taking complex – I say scaling the enterprise down into the hands of the individual user. Complex analytics, enterprise strength mobility, strength security, yet letting him in a very consumable way, he or she, the pilot, make those kinds of decisions.
TIM COOK: This is a great example of taking it to the next level because pilots were one of the first group to adopt the iPad. And they did this because their flight manuals were like this. So by putting all of this on the iPad, they had access at their fingertips. It saved fuel actually, because the weight of those flight manuals are so huge.
But this arguably now takes that decision-level making to the next level. And so there's thousands of these examples across retail, from insurance, to banking, to literally all of these verticals. And so this is what gets us excited. You know, it's really redefining and reinventing the enterprise.
JOSH LIPTON: Last question, Tim, I got to ask. You know, we've talked before about that product pipeline. You mentioned how excited you were. I know Eddy Cue talking about best pipeline he's seen in 25 years. Any more you can tell us, Tim, about that pipeline?
TIM COOK: I'd agree with Eddy. (LAUGHTER) I'd agree with Eddy. I totally agree with him.
VIRGINIA ROMETTY: Good place to end. (LAUGHTER)
TIM COOK: That is a good place to end. (LAUGHTER)
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