Apple’s Tim Cook outlined plans to capitalize on emerging markets and build on the success of the iPhone and iPad, revealing the focus on its best-selling products to fend off competition.
The Cupertino, Calif.-based company’s CEO spoke at a Goldman Sachs conference in San Francisco yesterday, making a rare stage appearance in front of investors to explain Apple’s overall strategy in many business areas, focusing on its commitment to continue bringing innovative products to the field. The company rakes in revenues through its apps and iTunes business, but products remain the central node of Apple’s overall strategy.
Cook called the opportunities presented by smartphone growth “jaw-dropping” and acknowledged the projected jump in smartphone ownership over the next few years as a big opportunity for Apple. Apple is hinting at a 4G LTE iPhone 5 for later this year, in a move to keep momentum rolling in the marketplace on its popular mobile devices.
Apple’s CEO also talked about the “off the charts” growth and adoption of the iPad. He attributed the tablet’s success to the company’s decision to hold off on releasing it until it built on technologies already familiar and available to consumers, such as iTunes, the App Store and multitouch. According to Cook, users got used to Apple’s signature technologies and services on the iPhone, paving the way for the iPad to take them to the next level.
He acknowledged upcoming iPad competition, reversing his earlier dismissal of Amazon’s Kindle Fire tablet to recognize the “different strengths” of the online retailer’s tablet offering. Cook also said the iPad will continue to steal business from the PC market, pushing Apple’s competitors to step up their game in pushing into the mobile and tablet fields.
Not content to rest on its laurels, Apple is testing a smaller-sized iPad to combat low-cost tablets like the Kindle Fire, showing the company is aware of the threat posed by competing offerings and its readiness to jump into other segments of the tablet market.
Apple’s tablet strategy faces setbacks in China, however, where a technology company seeks to ban iPad shipments into or out of the country. This move, if successful, would also hinder Apple’s efforts to capitalize on emerging markets and may lead to an iPad shortage.
Cook said in his speech China and Brazil will account for nearly a quarter of the smartphone market by 2015, making these areas critical to Apple’s global success. However, the company’s proposed factory in Brazil is on hold and it is held back in China by its high device prices and legal disputes, opening a possible window for a competitor like Google to gain an edge in these huge potential markets.
Apple is aiming to consolidate its success by keeping products one of the central linchpins of its strategy, but its rivals are also moving to gain ground as well. The iPad’s success pushes Microsoft to refine its mobile strategy in the face of the declining PC market. Microsoft is relying on its new line of Windows phones from Nokia to gain an edge in the mobile market, and Nokia is considering a foray into Windows tablets as well.
Microsoft is waiting on its new operating system, Windows 8, to unify all its products and provide a platform for the release of new tablets to compete with Apple’s. The new OS will likely attract other tablet hopefuls, such as Acer, to the Windows platform as well, potentially giving rise to a serious iPad competitor.
Cook revealed Apple’s future strategy involves staying the course, and stressed above all his company will keep product innovation its primary business focus and continue to build on the popularity of its top-selling devices to ensure future success.
“What we’re focusing on is the same thing we’ve always focused on. Making the world’s best products,” Cook said. “We think if we stay laser-focused on that, and develop the ecosystem around that, we have a pretty good opportunity to take advantage of this enormous market.”