During Apple’s Q1 2021 earnings call with investors and analysts, CEO Tim Cook was asked a broad question about how the company decides to enter new markets. Cook provided an interesting response, explaining that Apple likes to work on products where there’s a “requirement for hardware, software, and services to come together.”
The question came from Morgan Stanley’s Katy Huberty, who asked Cook to elaborate — without specifics — on how Apple evaluates when a new market might be attractive.
The framework that we use is we ask ourselves if this is a product or service we’d want to use. That’s a pretty high bar. Is it a big enough market to be in? Unless it’s an advanced product, it’s about customer experience. There’s no set way that we’re looking at it, no formula kind of thing. We’re taking into account all of those things.
The Apple CEO specifically said that Apple looks for markets where it can intersect hardware, software, and services:
The kinds of things we love to work on are those where there’s a requirement for hardware, software, and services to come together. Magic occurs at that intersection.
Cook went on to say that he believes there are “some really good opportunities” out there for Apple:
I think that we have some really good opportunities out there and if you look at our current portfolio of products, we still have a relatively low share in a number of very big markets. We feel that we have really good upside there and good upside in the services area, which we’ve been working on for some time.
Cook, of course, did not provide any specific details on what markets Apple might be looking at entering. The current rumors, however, indicate that Apple is working on a self-driving electric car, potentially in partnership with Hyundai, as well as an AR/VR headset.
More from Apple’s earnings call:
- Apple users set all-time record for FaceTime calls over the holidays
- Apple crosses 1 billion active iPhone users for the first time as install base reaches new milestone
- Apple (AAPL) reports record-breaking Q1 2021 earnings with $111.4 billion in revenue
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