Apple CEO Cook predicts massive iPhone growth, tablets will overtake PCs
Apple CEO Tim Cook
With the handset market poised to grow to 2bn units and Apple having sold 24pc of the available smartphone market (37m units) in the last quarter, nine out of 10 buyers are buying something else, leaving enormous room for growth for the iPhone, Apple CEO Tim Cook told a Goldman Sachs Technology Conference.
Cook began by addressing the plight of workers in factories in Asia producing iconic products like the iPhone and iPad and said Apple is focused on ensuring good working conditions. According to a transcript of the conference, available on MacRumors, Cook said Apple began collecting weekly data on more than half a million workers in Apple's supply chain and found 84pc compliance.
He said the Fair Labour Association Audit of Apple's final assembly vendors will turn out to be the biggest audit in manufacturing history and he has high expectations of the results.
“We know that people have a very high expectation of Apple. We have an even higher expectation of ourselves. Our customers expect us to lead and we will continue to do so. We are blessed to have the smartest and most innovative people on earth. We put the same kind of effort and energy into supplier responsibility as we do with our new products," Cook said.
Tim Cook and the law of big numbers
Cook offered responses to questions at the conference about the law of big numbers - Apple has US$96bn on its balance sheet - and opportunities it is revealing.
"(The number) 37m is a big number. It was a decent quarter. It was 17m more than we'd ever done before. We were pretty happy with that, but let me give you the way I look at the numbers. As I see it, that 37m for last quarter represented 24pc of the smartphone market. There's three out of four people buying something else. Nine out of 10 phone buyers are buying something else.
“The handset market is projected to go from 1.5bn to 2bn units. Take it in the context of these numbers, the truth is that this is a jaw-dropping industry with enormous opportunity. Up against those numbers, the numbers don't seem so large anymore. What seems so large to me is the opportunity.
“What we're focusing on is the same thing we've always focused on. Making the world's best products. We think if we stay laser-focused on that, and continue to develop the ecosystem around the iPhone, that we have a pretty good opportunity to take advantage of this enormous market," Cook said.
In tackling emerging markets like China and Brazil, Cook pointed to the 'halo effect' of how new devices add strength to existing ones. For example, the iPod created a halo for the Mac.
“The world changed for us when the iPhone was launched. The iPhone introduced Apple to millions of people - our brand - to people who had never met Apple before. Now, it's interesting to look. Take China as an example: last year, the Macintosh grew more than 100pc in China, year-over-year. Not on a big base, but 100pc is pretty good. The market grew 10pc, so we outgrew the market 10 times.
“The iPhone is creating a halo for the Macintosh. iPhone has also created a halo for iPad. You can definitely see the synergistic effect of these products, not only in developed markets, but also in emerging markets where Apple wasn't resonant for most of its life."
Cook also admitted the iPad had cannabalised some Mac sales. "The way that we view cannibalisation is that we prefer to do it to ourselves than let someone else do it," he said, adding that he doesn't predict the demise of the PC. "There will be a strong PC industry but tablets will be stronger in units."