The head of the most valuable company in the world talks to Bloomberg Businessweek Editor Megan Murphy.
Tim Cook, the CEO of Apple Inc., was interviewed in San Jose, California, on June 5 by Bloomberg Businessweek Editor Megan Murphy. Following are excerpts from their discussion, which appear in the June 19, 2017, edition of the magazine.
MEGAN MURPHY: You’ve talked about Steve Jobs and how you revere him. How much time do you spend thinking about what people will say about your legacy at Apple?
TIM COOK: None. To be totally honest with you, I don’t think in those terms. I think more about doing stuff. I hope people remember me as a good and decent man. And if they do, then that’s success.
Steve’s DNA will always be the base for Apple. It’s the case now. I want it to be the case in 50 years, whoever’s the CEO. I want it to be the case in 100 years, whoever’s CEO. Because that is what this company is about. His ethos should drive that—the attention to detail, the care, the simplicity, the focus on the user and the user experience, the focus on building the best, the focus that good isn’t good enough, that it has to be great, or in his words, “insanely great,” that we should own the proprietary technology that we work with because that’s the only way you can control your future and control your quality and user experience. And you should have the courage to walk away and be honest with yourself when you do something wrong, that you shouldn’t be so married to your position and your pride that you can’t say, “I’m changing directions.” These kind of things, these guardrails, should be the basis for Apple a century from now. It’s like the Constitution, which is the guide for the United States. It should not change. We should revere it.
In essence, these principles that Steve learned over many years are the basis for Apple. It doesn’t mean the company hasn’t changed. The company’s going to change. It’s going to go into different product areas. It’s going to learn and adjust. Many things have changed in the company, even in the last six to seven years. But our “Constitution” shouldn’t change. It should remain the same. I think of it as a North Star. It’s always important to have that in mind as you make decisions. It actually makes decision-making much simpler.
I was a little surprised the HomePod was pitched primarily as a music device when the competitive talk is of Amazon Echo’s Alexa and the immersive experience in the home. How will the HomePod better integrate Apple inside people’s lives?
We’re actually already in the home through the iPhone you take with you everywhere. It’s in your pocket or laying on a stand. Today, pre-HomePod, I can control my home using Siri through the iPhone. When I get up in the morning, my iPhone is my alarm clock. I say, “Good morning,” and all of a sudden my lights come on. The temperature adjusts and a series of things occur. We’re also in the home through Apple TV. Many people use iPad as their computing device. The desktop Mac enjoys a place in the home. The thing that has arguably not gotten a great level of focus is music in the home. So we decided we would combine great sound and an intelligent speaker.
So it’s going to be a holistic process joining up all those touch points so people can exercise control over their lives, whether through Siri or iPad?
To put it in perspective, Siri is getting requests from 375 million devices right now. My guess is it’s the largest by far of any kind of assistant. Some of those requests are done in the home. Some of those are done on the go. That’s the platform that we build off. It’s very different from our starting point. We’re also in so many languages around the world: Siri isn’t just in English. We’re well-positioned around the world. So, again, what is the thing that’s missing in this equation? The combination of quality audio and instinct.
Do you think people will pay $349?
If you remember when the iPod was introduced, a lot of people said, “Why would anybody pay $399 for an MP3 player?” And when iPhone was announced, it was, “Is anybody gonna pay”—whatever it was at that time—“for an iPhone?” The iPad went through the same thing. We have a pretty good track record of giving people something that they may not have known that they wanted.
When I was growing up, audio was No. 1 on the list of things that you had to have. You were jammin’ out on your stereo. Audio is still really important in all age groups, not just for kids. We’re hitting on something people will be delighted with. It’s gonna blow them away. It’s gonna rock the house.
You’ve talked a lot about augmented reality at the heart of the company’s future. How do you see AR moving forward?
I think it is profound. I am so excited about it, I just want to yell out and scream. The first step in making it a mainstream kind of experience is to put it in the operating system. We’re building it into iOS 11, opening it to developers—and unleashing the creativity of millions of people. Even we can’t predict what’s going to come out.
There’s some things that you can already get a vision of. We’ve talked to IKEA, and they have 3D images of their furniture line. You’re talking about changing the whole experience of how you shop for, in this case, furniture and other objects that you can place around the home. You can take that idea and begin to think this is something that stretches from enterprise to consumer. There’s not a lot of things that do that.
You’ll see things happening in enterprises where AR is fundamental to what they’re doing. You’re going to see some consumer things that are unbelievably cool. Can we do everything we want to do now? No. The technology’s not complete yet. But that’s the beauty to a certain degree. This has a runway. And it’s an incredible runway. It’s time to put the seat belt on and go. When people begin to see what’s possible, it’s going to get them very excited—like we are, like we’ve been.
Apple has traditionally focused on consumers and not on selling to companies. Talk about how you see the enterprise technology business growing.
Enterprise is like the mother of all opportunities. At one point in time you had to choose, “Do you want to do consumer or enterprise?” But the reality today is a bit different: Enterprises are a collection of consumers.
In the past, almost all applications were being written on Windows. So the Mac gradually lost its positions in enterprise. But today’s a different world. For most enterprises, iOS is the preferred mobile operating system. IOS is a fantastic platform because of the ease with which you can write apps that are great for helping you run your business efficiently or interface with your customers directly. We see many, many enterprises now writing apps. Well, what do they use to write the apps? They use the Mac. The Mac is the development platform for iOS.
The other thing that has changed is that the most forward-thinking chief information officers and chief executives are saying, “The top thing is, let’s have happy and productive employees.” When you care about people’s happiness and productivity, you give them what brings out the best in them and their creativity. And if you give them a choice, they’ll say, “I want an iPhone” or “I want a Mac.” We think we can win a lot of corporate decisions at that level. I think this megatrend is true in every country in the world, not just the United States. It leverages things that we’re great at as a company. I think there can be dramatic growth for us.
So we’ve been pulled into enterprise to some degree by the employee. At the same time, we did some smart investments in iOS starting many years ago to make it enterprise-class in terms of security in particular. We’ve done some smart partnerships with Cisco, with SAP, with Deloitte, with IBM. We understand that we need to play well with others. You don’t say, “I’m the only one.” We’ve done the smart things on relationships.
You’ve announced a $1 billion advanced manufacturing fund. How have you looked at boosting job growth for Apple in the U.S. and globally?
I feel a responsibility as the CEO of an important company to grow jobs in the United States. And so I may have a little different view on this than some of my peers. But I do feel that that’s a role that we have. We’ve thought about it at a pretty deep level: For manufacturing, you want to skate to where the puck is going. You don’t want to skate to where it is. So where’s it going? We can do the most in advanced manufacturing. The likelihood of robotics absorbing an assembly-type thing fairly quickly is high. But in advanced manufacturing, there’s going to be a lot of jobs. An example of this clearly is Corning. We’re working with them on things that have American innovation in them and create a good number of jobs.
There are more things like that. We can use our level of expertise about where the puck is going and, frankly, some of our cash to try to get as many of these in the United States as we can. Apple builds so many components here. That’s lost to a lot of people because they only look at the final assembly. We have to do a better job of educating people on that.
Apple’s created 2 million jobs in the United States. A million and a half of those are app developers. They’re everywhere in the United States. But you do see certain demographics who have been left out of that. So we started thinking, What can we do about this? We decided to create a programming language that was easier to learn. We call it Swift. The second thing we did was say, “You know, we could prepare a curriculum instead of asking educators to come up with their own.” We provided one for elementary schools because we think coding should be a required language just like English is. We call that Swift Playgrounds. We did that last year. And it’s taking off.
Then we said, “You know, the reality is that you miss a lot of kids who aren’t going to learn Swift Playgrounds because they’re already in high school or college. What can we do here?” So we geared it at a different age group. Universities like Stanford don’t need help. They are out front on these things. But community colleges do need help. Community colleges reach people who have not historically done well in app development jobs, which are taking off—like a weed, to be honest with you. It’s probably the fastest-growing major job segment in the United States.
So we prepared a Swift curriculum aimed at that group and went out to community colleges around the U.S. We picked a half a dozen where we had preexisting relationships to work with them and get their feedback. We’re providing it for free as well. We’ve worked with Houston. We’ve worked with the community college system in Alabama. We’ve worked with a huge system in Ohio. In California as well. We’re not limiting to those. They’re going to start offering it this fall. We’re hoping more people will sign up. This could light a match in this job segment by picking up different demographics.
We also have the largest number of student developers. It does your heart good to sit with these folks. They’re idealistic. They want to learn. There’s no cynicism. We can change diversity by doing this. We can begin to help people who have been left behind by the tech resurgence.
You’ve talked about a tax plan for repatriating the billions of dollars U.S. companies keep overseas.
I’ve suggested that. That’s not the parochial view of what’s best for Apple. That’s a view of what’s good for America. I’d come up with a reasonable percentage. I’d make it required, not something where people say, “Well, I’ll just bring back X.” You get charged, and you can decide whether you want to bring it back or not. But you’re getting charged. That’s what I would do on the past stuff.
On the future stuff, I’d come up with a really simple system. I would go for zero deductions. I wouldn’t allow any. I think when you begin to open the door to things that people want, it doesn’t close. It just keeps opening and opening and opening. I would be draconian and say “none.” The rate gets as low as it can go. I don’t know what that would be. Maybe it can get to this 15 percent people are talking about. Maybe not. Maybe it’s 20.
I would still charge a tax on international earnings. I am a party of one on this topic. The issue is not that there’s a tax on international earnings. The issue is the existing tax has been crazy. No one would bring it back at a 40 percent—I mean, 35 percent federal and then state taxes. That’s the problem.
I think it’s smart for the United States to have some kind of tax revenue for international earnings—if that tax were reasonable. Because it will be the small-business guy on the corner that this happens to. They’re going to see opportunity to sell their wares around the world—and it’s worth something to be domiciled in this country. And I’d give a credit for the taxes you pay internationally.
What’s been your experience of working with Donald Trump?
I feel a great responsibility as an American, as a CEO, to try to influence things in areas where we have a level of expertise. I’ve pushed hard on immigration. We clearly have a very different view on things in that area. I’ve pushed on climate. We have a different view there. There are clearly areas where we’re not nearly on the same page.
We’re dramatically different. I hope there’s some areas where we’re not. His focus on jobs is good. So we’ll see. Pulling out of the Paris climate accord was very disappointing. I felt a responsibility to do every single thing I could for it not to happen. I think it’s the wrong decision. If I see another opening on the Paris thing, I’m going to bring it up again.
At the end of the day, I’m not a person who’s going to walk away and say, “If you don’t do what I want, I leave.” I’m not on a council, so I don’t have those kind of decisions. But I care deeply about America. I want America to do well. America’s more important than bloody politics from my point of view.
Let me give you an example of this. Veterans Affairs has struggled in providing health care to veterans. We have an expertise in some of the things at the base level that they’re struggling with. So we’re going to work with them. I could give a crap about the politics of it. I want to help veterans. My dad’s a veteran. My brother served. We have so many military folks in Apple. These folks deserve great health care. So we’re going to keep helping.
How do you respond to critics who say Apple isn’t as innovative as it once was?
We invest for the long term. We don’t feel an impatience to be first. It’s just not how we’re wired. Our thing is to be the best and to give the user something that really makes a difference in their lives. When you look back in time, the iPod was not the first MP3 player. The iPhone was not the first smartphone. The iPad was not the first tablet. I could go on.
If you get caught up in the shiny thing du jour, you lose sight of the biggest forest. When I think about the big things, I think about AR. We’re not the first people talking about AR. Nor was it our objective to be. We wanted something well thought out that we could integrate into the platform and unleash a lot of developers to do some really cool stuff with it. We’ve got a great initial start there. Same thing on the home speaker. We’ve been working on this multiple years. We didn’t feel an urgency to get something because somebody else had it. It’s actually not about competing, from our point of view. It’s about thinking through for the Apple user what thing will improve their lives.
We’re pulling the string on that because we’d like to help as many people as we can. We put SOS in the watch because we recognized that people got into situations, and all you have to do is hold this thing down and it’ll dial 911 for you—or the appropriate number in Hong Kong or wherever you are in the world. I just got an email just a few days ago from a guy who had a car accident, and the car tumbled. He couldn’t get to his phone, but he had his watch—and that’s why he was able to get out of the car. You hear about these things. It’s making a difference.
This article first appeared in www.bloomberg.com
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