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The Cook Doctrine

We believe that we’re on the face of the Earth to make great products, and that’s not changing.

We’re constantly focusing on innovating.

We believe in the simple, not the complex.

We believe that we need to own and control the primary technologies behind the products we make, and participate only in markets where we can make a significant contribution.

We believe in saying no to thousands of projects so that we can really focus on the few that are truly important and meaningful to us.

We believe in deep collaboration and cross-pollination of our groups, which allow us to innovate in a way that others cannot.

And frankly, we don’t settle for anything less than excellence in every group in the company, and we have the self-honesty to admit when we’re wrong and the courage to change.

And I think, regardless of who is in what job, those values are so embedded in this company that Apple will do extremely well.

- Tim Cook, Acting Apple CEO, January 2009 FQ1 2009 Earnings Call

See also: Apple vs. Exxon-Mobil

Prepare for unrestricted iPhone distribution

I’m picking up all kinds of signals that Apple is about to let loose with a storm of operator distribution deals.

It all started with Tim Cook’s comment in the last conference call:

Over the past year we have moved a number of markets from exclusive to non-exclusive. In each case as we have done that we have seen our unit growth accelerate and our market share improve

Now we are hearing of unrestricted iPhone distribution in France and today the rumor of T-Mobile picking it up in the US (which I always thought was more logical than Verizon).  There are other hints from the Nordic countries

Three to Carry iPhone 4 in UK | News | The Mac Observer observes that there will be five (!) UK carriers selling it.

In addition to the super-steep ramp of 88 countries launching in 3 months.

It looks like Tim pulled all the stops.

Tim Cook on iPad vs. Netbooks: "It is sort of 100 to zero"

In terms of the iPad competing for customers who are considering a netbook, you know I am the wrong person to ask that. To me it is a no-brainer. iPad/Netbook, it is sort of 100 to zero. I can’t think of a single thing the netbook does well. iPad does so many things very, very well. I am already personally addicted to mine and couldn’t live without it.

via Apple Inc. F2Q10 (Qtr end 03/27/10) Earnings Call Transcript — Seeking Alpha.

Tim Cook on Apple TV: 34% growth but tiny addressable market

The units were up for the quarter 34% year-over-year but the absolute number of units are still small and we still classify the product as a hobby for the company. I would just repeat what I have probably said before. If you look at the other markets that Apple is in, the Macintosh competes in a market of 300 million or so units a year. The iPhone competes in a market if you look at all phones of maybe 1.2 billion a year. The iPod competes in a market that has 100 million plus or minus units per year.

So these are enormous sized markets and clearly the market that AppleTV is in is not in our view nearly that large as yet. That is the reason we classify it as a hobby so that no one gets the wrong impression that we have a vision that it is anywhere close to the size of the other businesses. However, a number of us love the product, use the product and we continue to think there is something is something interesting there and we continue to invest in it.

via Apple Inc. F2Q10 (Qtr end 03/27/10) Earnings Call Transcript — Seeking Alpha.

Tim Cook on iPhone Distribution: eight new carriers, three remain exclusive, total of 151

You can look at the number of carriers we added which was eight as I had mentioned, and out of the 151 carriers at the country level it is a good number but not a significant number. Obviously the existing carriers performed very well in addition to the adds.

… There are three main countries where iPhones have a contractual exclusive relationship. That is the United States, Germany and Spain. There are a few smaller countries where we have an exclusive or co-exclusive but those three are the ones that are the major markets. Over the past year we have moved a number of markets from exclusive to non-exclusive. In each case as we have done that we have seen our unit growth accelerate and our market share improve. But that doesn’t mean we view that formula works in every single case. I would just sort of reiterate what I did last time that this is how we are learning so far. That is the result we have seen so far. We think very carefully about each of these at the country level to conclude what is in our best interest.

via Apple Inc. F2Q10 (Qtr end 03/27/10) Earnings Call Transcript — Seeking Alpha.

Tim Cook on iPhone in China: 900% growth

China has been interesting. If you look at greater China which we define as mainland China, Hong Kong and Taiwan, the iPhone units were up year-over-year over 9 times. We added another 800 points of distribution in China. The revenue, we have never released this number before but I will do this in this particular case, through the first half of the fiscal year that we just completed for the six month period our revenue from greater China was almost $1.3 billion and this is up over 200% year-over-year. So we are well pleased with how the company is positioned to take advantage of the growth in greater China.

via Apple Inc. F2Q10 (Qtr end 03/27/10) Earnings Call Transcript — Seeking Alpha.

Peter Oppenheimer, CFO added:

We are very excited about China not only for retail but for Apple. Tim talked about the success we have had in greater China to date with revenue being up about two time’s year-over-year. With regard to retail stores we will open two stores in Shanghai this summer and with targets of having about 25 stores open in China by the end of calendar 2011.

As a point of reference, the Mac business growth in Asia is also pretty impressive: Mac units in APAC grew 67% vs. 20% in the Americas, 18% in Japan and 37% in Europe.

Tim Cook "shocked" by initial demand for the iPad

On the company’s earnings call, Apple COO Tim Cook says the company is “shocked” by initial demand for the iPad. He also added, “I’m personally addicted to mine and couldn’t live without it.”

via Apple Blows Out Earnings Thanks To Huge iPhone Sales – Yahoo! Finance.

Speaking of iPad, the iPad is almost impossible to obtain in Boston area.  By reservation only.

Suiting Up

Well, I don’t want to talk about any specific company. I’m just making a general statement that we think competition is good. It makes us all better. And we are ready to suit up and go against anyone. However, we will not stand for having our IP ripped off, and we’ll use whatever weapons that we have at our disposal. I don’t know that I could be more clear than that.

Tim Cook, my favorite Apple exec, in January 2009.

One thing should be obvious: the accusations against HTC are aimed at Google and Microsoft or more broadly still, they are aimed at any mobile software competitor that intends to use touch and gesture inputs.

When Jobs said in 2007

We’ve been pushing the state of the art in every facet of this design. We’ve got the multi-touch screen, miniaturization, OS X in a mobile device, precision enclosures, three advanced sensors, desktop class applications, and the widescreen video iPod. We filed for over 200 patents for all the inventions in iPhone and we intend to protect them.

he implied that Apple had approached this new input method with much more care than when they introduced the mouse and windowing interfaces in 1984.

Unlike the fight over Windows, which was a copyright debate, this will be all about patents. Apple ultimately lost the GUI fight over the MasOS windowing interface, which is why I think they are much more prepared this time.

Given this strategic intent, the only questions were how the war would be engaged and on what terms. A few skirmishes caused some head fakes.

First, came apparent threats against Palm. Apple was certainly debating going after Palm, but I think they realized it would not be a good strategy. Mostly because the signal would be weak. There would be few consequences to Palm being punished. Palm’s integrated model is not employed by many of the larger device vendors. Except for Nokia, all other vendors license their OS, Samsung, LG, Sony Ericsson and Motorola would not be infused with anxiety over Plam taking a hit.

Second, came the pre-emptive attack from Nokia. Apple was not ready to go after Nokia last year because Nokia did not yet have a UI “worthy of being infringing”.  In other words, there was no target to shoot at.  Nokia’s suit was pre-emptive in that it centered on their desperate wish to have a cross-license agreement–trading GSM patents for touch patents.

That skirmish should not detract from what’s the real goal here:  securing monopoly rights to mobile computing interfaces.


From Apple Computer Inc to Apple (Mobile) Inc

Tim Cook confirmed at a Goldman Sachs press conference yesterday that Apple is calling themselves a “mobile device company” officially. The “traditional model” of having companies sell different things — hardware, software, peripherals — just doesn’t work on today’s world, according to Cook. So Apple is no longer a computer company, or an OS maker, or a media giant. Its main focus is mobile devices.

link: Tim Cook: Yes, we’re a “mobile device company”


33 Million iPod Touch Sold

Tim Cook made the claim yesterday that about 75 million iPhone OS devices have been sold. The total iPhones we know are about 42 million. That leaves at least 33 million iPod touch units or 44%.

iPod touch grew 55% y/y in CQ4.

My estimate had been 40% iPod share of the platform, so this is very encouraging. It seems that the proportion of iPod is growing and with the iPad, it’s possible that we’ll see less than 50% of the ecosystem being iPhones.