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Apple: We Say No to Good Ideas Every Day

Apple: We Say No to Good Ideas Every Day

Jason Mick

Apple Chief Operating Officer Tim Cook delivered a rather interesting Q&A session at a Goldman Sachs tech conference on Tuesday.  In it he reaffirmed Apple’s assertion that its floundering Apple TV product is really just “a hobby”.  He also offered some insight into how product development works in Cupertino and said that Apple has no qualms with rejecting good ideas “every day”.

When asked about whether hubris and complacency were issues for Apple, Mr. Cook responds [Quicktime Streaming]:

The executive team of the company spends a lot of time thinking and discussing how to retain and recruit the best talent in the world, because at the end of the day – I know it’s a cliché – but people are our most important asset by far, and it’s people that deliver innovation which is key to us. And so what else do we do other than that? Well, we are the most focused company that I know of, or have read of, or have any knowledge of. We say no to good ideas every day. We say no to great ideas in order to keep the amount of things we focus on very small in number, so that we can put enormous energy behind the ones we do choose, so that we can deliver the best products in the world. In fact, the table that each of you are sitting at today, you could probably put every product on it that Apple makes, and yet Apple’s revenue last year was over $40 billion. I think the only other company that could say that is an oil company.
And that is not from just saying “Yes” to the right product which gets a lot of focus. It’s saying no to many products that are good ideas, but just not nearly as good as the other ones. And so I think that this is so ingrained in our company that this hubris that you talk about which happens to companies that are successful but then decide that their sole role in life is to get bigger, and they start adding this and that and this and that. I can tell you the management team of Apple would never let that happen. That’s not what we’re about. So, focus on people, and ensuring that it’s a small list of things to work on and putting all of our wood behind those things, that’s the magic behind us.

About Apple TV, Mr. Cook commented, “Apple TV is still a hobby. We’ve been very clear about that. The reason that we call it a hobby… if you look at the other businesses we’re in, these businesses are all in huge markets. The unit volumes in these things is huge. Apple TV is in a market that’s very small. Today. Apple TV did grow in the quarter we just finished by 35% in a unit basis year-over-year.  No interest in going into the TV market. But still think there’s something there. So we continue to invest in this as a hobby.”

He also delivers a prophecy of the  netbook industry  dying – apparently at the hands of the iPad.  He claims, “iPad new use case or replacement for netbooks? We haven’t sold one. I’m a paranoid guy by nature, but I’m not losing any sleep over cannibalization, to be honest with you. Who would buy it? I’ve been very clear about my view of netbooks. I think they are an experience that most people will not want to continue to have. People were interested in the price and they got it home and used it and went ‘Why did I buy this?’ so I think when somebody looks at iPad and compares it to a netbook, I find it hard to believe that people are going to buy netbooks. Not everyone will make the comparison so I’m not suggesting that. But I think what I’d rather do with this question is report back to you.”  

He also infers that Microsoft is bloated employee-wise, commenting, “Which way is OS market moving? I don’t see it as this or that – iPhone vs. Mac – or this over that. I think there is a place for both. What you’re seeing for Apple is that the Mac OS is very scalable. Huge competitive advantage for Apple. Use the Mac OS in a lot of products. Don’t think there’s another company that can use the foundation of their OS that way. Move at a fast speed with many fewer people than it would take if we were geographically north.”

Apple recently announced its latest bid at an electronics powerhouse with the iPad.  We shall learn this spring if Apple’s latest creation has the power to generate waves in the marketplace like the iPod and iPhone.


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