Tim Cook ATD

Image via AllThingsD

We are here on the scene at Tim Cook’s interview at AllThingsD‘s D11 Conference in Palas Verdes, California. The proceedings will begin at 6 PM Pacific / 9 PM Eastern, and we’ll be noting both Walt Mossberg and Kara Swisher’s questions and Tim Cook’s answers in this post.

At last year’s D10 conference, Cook gave insight into improved relations with Facebook (which forecasted iOS 6 integration), hints at the demise of Ping, insight into his first few months as taking over the reigns from Apple co-founder Steve Jobs, and more.

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This year’s interview will follow Apple’s improved transparency with manufacturing partners, several major product launches, the Apple Maps debacle, the departing of two top Apple executives, and comes amidst a time in which Apple’s competition is heating up and new Apple product categories are rumored to be brewing.

With that in mind, it will be interesting to see both AllThingsD‘s questions and Cook’s responses. Find our complete live blog below:

- We’re in our seat!

- Should be starting up soon! The conference is being introduced.

- Some jokes about Tim Cook being asked about updating apps at his hearing with the Senate on taxes.

- Walt and Kara are out!

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- Tim Cook now on stage for the interview!

- Walt: Has Apple lost its cool? Is Apple in trouble?

- Tim: “Absolutely not.” Huge iPhone and iPad numbers. Customer satisfaction rates are “off the charts, unprecedented.” “Unbelievable” usage statistics. 59% of all web usage on this device category. “I look at this and I say: ‘I’m feeling pretty good.’ Discussing major product launches late last year: iPhone 5, iPads, iPods, Macs, new iTunes.

- Kara: Rivals?

- Tim: Apple has had rivals like Microsoft and Dell. Now, Cook does not see a different competitive landscape differing 5, 10, 15 years ago. Apple has always had competition to focus on. However, our North Star is always been focusing on making the best products. The best phone. The best tablet. The best PC. The best MP3 player. More important than me thinking this, our customers think this.

- Tim: The stock price has been frustrating for investors and all of us. This, too, is not unprecedented. The beauty of being around this long, you can see  many cycles in financials. AAPL was $200 in ’07, by ’09, it was $70-$75. A few years earlier than that, there were other move-downs. We need to focus on new products, and then other things will happen.

- Walt: Apple is generally perceived of changing the game. It has been a while since this happened. iPad mini was a good move, but it wasn’t a game changer like the original iPhone and iPad. People expect hits like they do from movie studios. When is the next hit.

- Tim: People are lately defining innovation as a new category. We have some incredible plans that we have been working on for a while. We have incredible ideas, the same culture and the same people that brought the iPhone, iPad, and iPod, and the Mac. We have similar more game-changers in us.

Kara: Talk about TV?

Tim: Apple TV sales increasing. This business has found many, many more customers that love the Apple TV experience. Great for customers and very good for an Apple learning point of view. Lots of us would agree that the TV space could be improved.

Walt: What’s holding back the TV project, technical stuff? Hollywood?

Tim: I don’t want to go into technical details. TV remains an area of great interest to us. The work we’ve done on current Apple TV provides more knowledge than what we would have without that product. The popularity of the Apple TV has been greater than expected. It is encouraging. The TV experience is not an experience that many people love. It’s not an experience that you would say has been brought to date for this decade. It is like the experience from 10, 20 years and go.

Kara: What, in broad terms, would you want in a TV.

Tim: I don’t want to go into more detail on this. There is a “very grand” vision for TV. I have nothing to announce, but it is an area of incredible interest.

Walt: Will you so something about it this year. “I’ll make you a deal: you’ll be the first person…”

Kara: What about wearables? What’s your take on Google Glass?

Tim: Positive points in the products. Would be more likely to appeal to certain vertical markets. Broad range appeal “tough to see.” Wearables, in general, incredibly interesting, profound.

Walt: Are wearables beyond fitness?

Tim: Nike Fuel Band well made for the fitness category. Works well with iOS. The ones that do more than one thing aren’t great. They won’t convince a kid who has never worn glasses, a band, or a watch to wear one. There are lots of things to solve in this area, ripe for excitement. I think there will be tons of companies playing in this (won’t respond to Walt asking if Apple will). I see this as a very key branch of the tree… referring to the post-PC era.

Kara: Which area of wearables are you interested in? Glasses, watch?

Tim: I’m interested in a great product. I only wear glasses because I can’t see without them. People want wearables to be light, unobtrusive, reflect their fashion/style and so forth. From a mainstream point of view, glasses are difficult. I think the wrist is interesting. It is somewhat natural. I think for something to work [on the wrist], you have to convince people why it is worth wearing them. The sensor field is going to explode.

Walt: Let’s talk Android. Apple started the modern smartphone movement, the one that was the true smartphone. Now, you’ve seen Android swamp Apple in a big way: units, carriers, usage. Do you look at this gap?

Tim: I don’t have my head stuck in the sand. For us, winning has never been about building the most. Arguably, we make the best PC, but we don’t make the most. Same with the MP3 player. However, with the tablet, we make the best and most. Phones we make the best, but not the most. There are several things to assess the health of your products. We look at usage: what customers are doing, North America web usage share. Talking about Black Friday last year: study said there were twice as many e-commerce transactions on iPad than on all Android devices combined. *Applause from crowd* What the numbers suggest over and over again are that people are using our products more.

Walt: So what are Android users doing with their products?

Tim: Some are feature-phones. My own iPad personal use is a significant percentage of my computing work. It has changed the game. I don’t hear that from Android tablet users. Customer satisfaction is sort of the report card no matter the business: iPad and iPhone have the highest customer satisfaction in tablets and phones. We want customers of all ages… we try to appeal to everyone.

Walt: When is the next big change for the iPad and iPhone?

Tim: I won’t answer those. But what I can say is that we have a developer conference in less than two weeks. We’re going to be rolling out the future of iOS and OS X. We’re all “super excited” (said twice) to do that. We have a lot of developers coming in. We owe the world to these developers, they work like crazy. We have a fantastic quantity and quality of apps. We have 350,000 iPad-optimized apps. Compared to others, that number is in the hundreds. I think we have got a substantial lead in that area.

Kara: What’s new in iOS?

Tim: Surprise is fun.

Kara: Is the iOS update dramatic?

Tim: Jony Ive is working on it.

Tim talking changes at the executive level: We recognized that Jony does great design, and the design is incredible.

Kara: Asking about Scott leaving & collaboration. Scott was powerful and significant. What happened?

Tim: I won’t talk about anyone specifically. I think it has been an incredibly great change. Craig [Federighi] is running iOS and OS X. Eddy [Cue] focused on services. These changes have been great. Really, really great.

Kara: What is your management style? How do you differ from Steve?

Tim: Most important things are the same. We’re there to make great products. Keeping the culture of Apple the same. Ridding things that try to change Apple. None of this has changed a bit.

Walt: Product strategy? When [Apple] did the iPod, Steve said its finally good to have a product about 5% share. A range of iPods was created at different iPods. Not like last year’s model. Different use cases, audiences. Apple killed the iPod mini and swapped it for the iPod nano. What about the iPhone? It worked on iPod, why doesn’t it work on iPhone?

Tim: We haven’t done that so far, but that doesn’t shut off the future. Why haven’t we done that so far? Because we have chosen to put our hardware, software, services energy into getting our [flagship iPhones] right. These are choices based on focus. On the iPods, the Shuffle played a different role. It was strikingly different than the Nano/Mini/Classic. These products all served a different person/type/need. On the phone, that is the question. Are we now at a point to serve enough people that we need to do that?

Walt: People like phones with bigger screens. I don’t know exact numbers, but there are people that seem to like those. There are people who like sizes between phones and tablets (with styluses!). Steve used to say styluses are bad, but Steve has done that then made them. Are bigger screens and styluses proper differentiators?

Tim: A large screen today comes with a lot of tradeoffs. There are other things important for a display. Our customers want us to weigh those and come out with a decision. At this point, we felt that the Retina Display we ship is overwhelmingly the best. In a world without tradeoffs, those can be differentiators.

Kara: On taxes. What happened?

Tim: Instead of just saying things are screwed up, we came up with a proposal of what we think should be done. Apple’s tax return is “two feet high.” We don’t use tax gimmicks.

Walt/Kara: Patents, Ireland?

Tim: We have no special tax deal with Ireland. Based on the hearing, the basic thing being debated for a company like Apple that sells things across the world (and develops them in the United States), some people believe that all worldwide profits should be taxed in the U.S. The year Apple went public, there was a deal with Apple U.S. and Apple Ireland to contribute money to products. I worry where development of products would be if global products were wholly taxed in the U.S. I am worried about that potential policy. I think it was great to be a part of the process, to tell our story. I hope it helps the reform question.

Walt: Lots of government agencies seem to be focused on Apple, how much attention to you pay to this?

Tim: When you get larger, you get more attention. It comes with a territory. I think we’re doing incredible work. Environment for example. [Apple] is the first to eliminate all toxins in products. We ship the most efficient products. We own the largest solar farm of any non-utility firm. Lisa Jackson is joining Apple. She ran the EPA for the last four years. She will run environmental duties. Reports to Cook. Chemical engineering background.

Tim: E-Book case is “bizarre” We’re going to fight. We’re working with Bono on Product(RED). We can make a difference in this year. We’re going to push things like that.

Kara: What are you doing with your money? Acquisitions?

Tim: Prior to this year, buying about 6 companies a year. Starting from October, we’ve acquired 9 companies. We’ve only announced the ones we had to. I wouldn’t rule out a major acquisition. Would this lead to a big product? Will the culture fit?

Kara: Social?

Tim: iMessage, Game Center are social. We integrate Facebook and Twitter. I never felt that we need to own a social network. We have looked at large acquisitions.

Walt: Facebook Home? Takes over Android. It hasn’t done very well. It’s an interesting idea. Your keyboard and your recognition, predictive typing has not kept pace with what has occurred on the Android/BB10 keyboards. Have you given thought to a little less control in OS.

Tim: You’ll see open up more APIs in the future, but to the degree that we put the customer at risk of having a bad experience.

Kara: Will you allow [ChatHeads] from Facebook Home?

Tim: Customers like our current integration with Facebook services. I’m not sure that’s one, but there’s always more to do. We’ll come up with more things to do together.

Interview with Kara and Walt over.

Q/A Time!

- Q: Mobile advertising?

- Tim: We want a thriving developer community.

- Q: Google and Microsoft are offering cloud services with more features than iCloud, the services are less-platform-specific. iCloud is Apple only (mainly). Should Apple be embracing a broader audience with iCloud?

- Tim: Apple has no religious issue porting an iOS app to Android. We would do it if it made sense. Doesn’t make sense to do this for iCloud today.

- Q: Weigh in on the concern of children’s technology use. Proper age for a parent to by a child an iPhone?

- Tim: I’ve seen incredible things done in the learning space for iPhone + iPad. Parenting is key. What I like to see is kids learning very young and having a very curated experience by a parent on the iPhone/iPad.

Q: Talking about Google strength in voice, Maps, etc. Apple just has iTunes. What kind of services coming from Apple to stay with the iPhone? Payments?

Tim: 2 billion iMessages delivered per day. iTunes apps, movies, TV shows, Podcasts are incredible. The stores work like a train. FaceTime is used tremendously. We’re making tons of investments in services. We’re focused on that area. Core of Apple: great hardware, software, services, and find the magic where they meet. We did not bid on Waze.

Q: Give us a glimpse of the future as Apple sees it.

Tim: We will release products when they are ready. We believe very much in the element of surprise. I have no plan on changing that.

Q: Microsoft + Nokia, Google have Maps. Can you talk about Location + Commerce, where does Mapping sit in your priorities.

Tim: I think Maps is very important, that’s why we’re investing as much as we are. Mapping is complex: POI, other pieces. We have an enormous investment in Maps. Recently, significant Maps updates in Japan.

Walt: Is Maps improved?

Tim: It’s greatly improved, but not there yet. We have more to do.

Q: Media approach?

Tim: We need access to great content, not to own it. We have 35 million songs. 200,000+ TV shows. 60,000 movies. It’s an incredible library. As long as that’s available, we don’t need to own it. We don’t have the skill to produce and direct. iTunes itself is still growing well.

Q: Patent litigation, what has this accomplished? Suing them has validated them as a great competitor. Your answer has always been that you want Samsung to make their own stuff.

Tim: Other companies trying to get injunctions on our products… referring to standards essentials issue. I’m not negotiating it this evening. I don’t like them anymore than I did last year. This is about values.. at the end of the day.

Q: On the Mac, you have iLife, lots of new apps to show why it’s different than Windows.

Tim: iOS has iLife. iOS has iWork too. Pages is most popular paid app on iPad of all time. At the beginning, we were worried that people only saw the tablet for consumption, but now I see people creating all the time. Do I need to do more? Yes, always. You will continue to see some cool things there. you’ll see contributions in the creation space.

- Cook is done.

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