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Federighi, Cook, and Ive  (Source: Bloomberg)
Cook, Jony Ive and Craig Federighi talk about the new iPhones, market share and the competition

Only a week after the big iPhone 5S/5C reveal and a day before their launch, Apple CEO Tim Cook says he isn't worried about iPhone market share, and even managed to throw a few stones at the likes of Nokia and Google's Android. 

Bloomberg BusinessWeek's Sam Grobart sat down with Cook to talk about Apple's place in the mobile market, and whether Cook is worried that competitors like Android will continue gaining market share in various areas as Apple continues to offer luxury-priced phones that appeal to only certain markets. 

“There’s always a large junk part of the market,” said Cook during the interview. “We’re not in the junk business. There’s a segment of the market that really wants a product that does a lot for them, and I want to compete like crazy for those customers. I’m not going to lose sleep over that other market, because it’s just not who we are. Fortunately, both of these markets are so big, and there’s so many people that care and want a great experience from their phone or their tablet, that Apple can have a really good business.”

Apple recently announced the expected high-end iPhone 5S, which has a starting unsubsidized price of $650. The iPhone 5C, which was believed to be a budget version of the iPhone for emerging markets like China, was expected to be priced at a "budget" range. However, its unsubsidized price is only $100 less than the 5S. 

While Apple is working hard to make deals with China Unicom, China Telecom and China Mobile, many wondered if Apple would be able to sell to this market considering the still-high price of the iPhone 5C. 

iPhone 5C

“We never had an objective to sell a low-cost phone,” said Cook. “Our primary objective is to sell a great phone and provide a great experience, and we figured out a way to do it at a lower cost.”

Google's Android is a good example of an operating system that spans both high and low end smartphones, offering a vast price range for those looking to shop on either side of the spectrum. This gives Android the ability to reach various markets, and continue gaining market share. In fact, IDC said nearly 80 percent of the world’s smartphones run Android. It also said the average unsubsidized price for a smartphone fell from $450 to $375 last year. 

But Cook brushes this off, saying that customers tend to buy Android devices and dump them in a drawer while an iPhone is the smartphone they truly use.

“Does a unit of market share matter if it’s not being used? For us, it matters that people use our products. We really want to enrich people’s lives, and you can’t enrich somebody’s life if the product is in the drawer.”

Cook added that he doesn't see Android as just one entity competing against Apple. Rather, the operating system is so fragmented that many users are running versions as old as Gingerbread from three years ago. 

Here's a breakdown: About 45 percent of Android users are on Jelly Bean, the latest version of Android, while 31 percent are still on Gingerbread and 22 percent are on Ice Cream Sandwich. Apple says 93 percent of its users were on iOS 6 at the end of June.

iPhone 5S

“And so by the time they exit, they’re using an operating system that’s three or four years old," said Cook. "That would be like me right now having in my pocket iOS 3. I can’t imagine it.”

Apple's idea is that having one company work on both the hardware and the software makes a big difference when it comes to user experience, instead of Google's method where Android is given out to various hardware manufacturers like Samsung. 

Jony Ive (senior vice president of Design at Apple) and Craig Federighi (senior vice president of Software Engineering at Apple) -- who also took part in the interview -- agreed that the new iPhones marry hardware and software better than other smartphones. And while the iPhone doesn't receive new OS versions or updates as often as Android, they said that Apple doesn't just push out new features for the sake of having them; they take the time to perfect them, and make them better than anyone else. 

“New? New is easy. Right is hard,” said Federighi.

Cook also addressed the Apple/Microsoft comparison of the 1990s, where Microsoft licensed its Windows operating system to hardware makers like Dell and Hewlett-Packard while Apple only used its operating system on its own Mac hardware line. This allowed Microsoft to gain a ton of market share at that time while Apple's plummeted, and many wonder if Apple is making the same mistake in its competition with Android. 

Speaking of Microsoft, Cook said the recent $7.2 billion purchase of Nokia's devices and services unit shows that more companies are trying to follow Apple's lead. He also took a jab at Nokia, saying that it's failure to innovate led to its end as a mobile leader.

“Everybody is trying to adopt Apple’s strategy,” said Cook. “We’re not looking for external validation of our strategy, but I think it does suggest that there’s a lot of copying, kind of, on the strategy and that people have recognized that importance.
"I think [Nokia] is a reminder to everyone in business that you have to keep innovating and that to not innovate is to die.”

The iPhone 5S and iPhone 5C hit store shelves tomorrow, and while iPhone market share sits below that of Android and Apple stock has taken a dive since its $700+ high last September, Cook believes that the company is doing the right thing.

Source: Bloomberg Businessweek

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RE: Man
By half_duplex on 9/19/2013 12:30:25 PM , Rating: -1
I don't see it as smug, they are simply responding to the smug marketing campaigns of Samsung and every other competitor.

Unlike Samsung, they are directing their comments at their rival, not their rivals customers. Remember the 2+ minute Super Bowl spot Samsung ran which basically portrayed any Apple use as a trained monkey?

RE: Man
By msheredy on 9/19/13, Rating: -1
RE: Man
By Kiffberet on 9/20/2013 7:48:02 AM , Rating: 3
Apple CEO Tim Cook Says No One Uses Android Smartphones

Great headline. Except Tim Cook didn't say that...

Made me read the article, though, so well done.

RE: Man
By exeedorbit on 9/20/2013 9:55:35 AM , Rating: 5
Brought to you by the "talented" Tiffany Kaiser. She's always sensationalizing titles of her articles.

RE: Man
By futrtrubl on 9/19/2013 1:26:45 PM , Rating: 5
“There’s always a large junk part of the market,” said Cook during the interview.

Sounds like they are directing their comments at the "large junk part of the market" using Android.

And then there was that entire ad campaign saying PC users were, by proxy, boring.

There are no innocent companies now. The innocent fail.

RE: Man
By Guspaz on 9/20/2013 12:13:59 PM , Rating: 4
There's some truth to it. By all measurements, Android is vastly outselling iOS devices, and yet iOS has a vastly higher mobile browser marketshare. I'm not entirely sure how to interpret that and relate it to device sales, but my guess is that Android is converting large chunks of the feature-phone market with low-end Android devices, and that most of these users continue to use their new smartphone like they did their feature-phone (as in, don't use the "smartphone" features like apps or browsers).

That's great for Android from a revenue perspective, but isn't directly useful in terms of building the ecosystem. The upside is that all those users already have the hardware, so they may grow into the smartphone ecosystem; they're already part-way there.

RE: Man
By Solandri on 9/20/2013 5:29:02 PM , Rating: 4
Search for my name and read my other post. Android generates nearly twice as much web traffic as iOS does. The aphorism that iOS has more market share comes from measurements of unique visitors each month, not actual web traffic volume.

In other words, iOS' share of unique visitors is inflated by millions of iOS users who occasionally browse the web. The people who do heavy web browsing are mostly on Android. Android has roughly half the number of people who browse that iOS does (that part of the aphorism is true - most Android users never browse the web). But those people browsing with Android generate nearly twice the web traffic of iOS despite having only half as many people.

RE: Man
By ihateu3 on 9/20/2013 12:13:25 AM , Rating: 3
Remember Microsoft never attacking Apple or its users, but yet Apple struck against their users with "I'm a Mac, and I'm a PC" commercial? But now that its not Apple doing it, its wrong? Looks like Samsung must have copied Apple again, but this time on the marketing asshole side, SMH...

All companies trying to compete with Apple must fight fire with fire, because GD if Apple is not one of the dirtiest companies...

Remember Apple attacking its own customers with "you're holding it wrong" or "Apple's do not need virus protection" etc???

"This week I got an iPhone. This weekend I got four chargers so I can keep it charged everywhere I go and a land line so I can actually make phone calls." -- Facebook CEO Mark Zuckerberg

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