Apple CEO Tim Cook Says No One Uses Android Smartphones, Nokia Failed to Innovate
September 19, 2013 12:03 PM
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Federighi, Cook, and Ive
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,
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.
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.
“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.
“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.
This article is over a month old, voting and posting comments is disabled
9/19/2013 3:32:47 PM
funny thing is that as soon as 5c and 5s were announced, apple stock was downgraded by many analysts with targets set to below $500 mark.
With Nokia take over, Microsoft gets a bit more control on the hardware side too. And Microsoft is a company that has sunk billions of dollars to gain market share in all industries - xbox, bing, Windows phone, ... Google's android has shown it is unstoppable and with Motorola hardware under its helm, you have two Nancy Tellemlining their Aces up against Apple. Samsung brand too has become a behemoth to deal with and it too is a force to be not reckon with. And on the hardware side you also have to look at the likes of Qualcomm and Intel, new entrant, who too are behemoths that Apple is indirectly competing against.
So Apple now can and will feel the competition heat. It will need to pull up Aces too and at a quicker pace than it has in the past to keep its market share. Also the recent trend easily is proving that the brand value advantage Apple had over others has dramatically been reduced by the likes of Samsung.
Apple isn't going to disappear in matter of couple years but I can see them losing out on ASPs big time with all those behemoths aiming to take their own bigger bite of the market. And that's what will hurt their market capital big time too.
9/19/2013 10:08:21 PM
you have two Nancy Tellemlining their Aces up against Apple
not sure what Nancy Tellemlining is doing there but it should be two behmoths.
“We do believe we have a moral responsibility to keep porn off the iPhone.” -- Steve Jobs
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