Apple Business Google News, — December 6, 2012 18:23 — 0 Comments
Cook says Apple will build some lines in US and not China and admits it ‘screwed up’ when it dumped Google’s maps for its own
Tim Cook, the chief executive of Apple, has promised to shift production of one of its Mac lines to the United States from China by next year and admitted that the company “screwed up” when it dumped Google’s maps for its own in September.
In his first media interviews since taking up the CEO post on the death of founder Steve Jobs, Cook said Apple was already sourcing more of its parts in the US, and would spend 0m next year to move production of the unspecified computer line from China.
He also said the company was working extremely hard to improve the functionality of its maps feature.
The interviews, with Bloomberg Businessweek and NBC’s Rock Center with Brian Williams, come as Apple has seen sharp falls in its stock as investors fret about intensifying competition from rivals such as Samsung in the smartphone and tablet markets. There are also concerns about the effects of the fiscal cliff crisis on capital gains tax, which could make shareholders liable for high payments on shares.
Cook’s comments are published on the day that a judge in California began hearing post-trial arguments from Samsung and Apple over the case in which a jury awarded Apple bn for patent and design infringements by its South Korean rival.
In his NBC interview, Cook noted that the main cost of making a PC or smartphone comes in buying chips, many of which are made in the US. But the issue of where Apple assembles its products has been touchy for Apple: its Chinese manufacturing partner Foxconn has faced significant criticism over working conditions at its factories, and some politicians in the United States have criticised Apple for not doing more to support the US economy.
Cook told Bloomberg that Apple’s plans for Mac production in the US would include more than just final assembly of the chosen product line. “This doesn’t mean that Apple will do it ourselves, but we’ll be working with people and we’ll be investing our money,” Cook told Bloomberg Businessweek. He did not say where in the country the Macs would be made.
The new US-made line is likely to represent only a tiny piece of Apple’s overall production – iPhones and iPads form the largest part of Apple’s business and will continue to be made overseas.
On the maps issue, Cook defended the decision to drop Google maps in principle, suggesting Google blocked the provision of turn-by-turn navigation and voice direction.
“We had a list of things that we thought would be a great customer experience [on maps], and we couldn’t do it any other way than to do it ourselves,” Cook told Bloomberg. But he added: “We couldn’t do it any other way than to do it ourselves” – suggesting that Google blocked those services to the iPhone.
The work began some years before, not in order to cut Google out, but to provide customers with the services, Cook said. “And the truth is that it didn’t live up to our expectations. We screwed up.” But he added: “We’re putting all our energy into putting it right … we’ve got a huge plan to make it even better.”
Apple was heavily criticised over some problems in the maps it provided, such as the misidentification of locations, and missing details about public transport compared to Google’s. Cook wrote a public letter of apology and in October fired the head of iPhone software, Scott Forstall. It also ousted John Browett, the Briton who formerly ran Dixons and had been Apple’s head of retail.
Forstall’s failure, Cook implied in the Bloomberg interview, was that he couldn’t bring enough collaboration to the company. The firings were intended to “get us to a whole new level of collaboration”, Cook said. That hints that Forstall, who had particularly been identified as insufficiently collegiate, had become too divisive within the company for Cook’s liking.
“I despise politics,” Cook said. “There is no room for it in a company. My life is going to be way too short to deal with that. No bureaucracy … no politics, no agendas. When you do that, things become pretty simple.” The converse “sucks the life out of you”.
Instead, the task of running the stores presently falls to Cook himself, while the software line is the responsibility of Sir Jonathan Ive, who Cook said “has the best taste of anyone in the world and the best design skills”.
He hinted that Apple has “some really cool ideas” in the field of wireless – perhaps something involving phones.
Steve Jobs explicitly told him not to try to second-guess his decisions after his death. Cook said he was told by Jobs: “I saw what happened when Walt Disney passed away. People kept looking around, and they asked what Walt would have done… I never want you to ask what I would have done. Just do what’s right.”
Cook declined to discuss what products might be forthcoming from Apple’s stable. But he did say that a growing amount of the parts used in Apple products are made in the US, including the processor for the iPhone and iPad – by Samsung in Texas.
He said that he wants to keep Apple in its unusual format to maximise innovation: “Creativity and innovation are something you can’t flowchart out. A lot of companies have innovation departments, and this is always a sign that something is wrong when you have a BP of innovation or something. Everybody in our company is responsible to be innovative.”
He pointed out that 80% of Apple’s revenues are from products – the iPhone 5, iPad mini, and revised iPad – that “didn’t exist [in shops] 60 days ago. Is there any other company that would do that?”
But Apple still sticks to a number of traditions – such as the “Monday morning meeting” which began under Jobs, which begins at 9am and discusses “everything in the company that’s important, every new product”.
Asked how he feels about suing a company that is also Apple’s biggest supplier, he replied: “I hate litigation. I absolutely hate it. For us, this is about values. We tried every other avenue [to settle] and so we’ll see what happens in the future.”
Cook said that being the full-time chief executive, rather than the part-time basis on which he did it when Steve Jobs was ill in 2004, 2010 and then 2011, is “different” and has been “a bit of a surprise” – but equally, he said he loves it. He said that he is a private person, and that “I don’t feel famous”.
Cook also revealed that he gets hundreds of informal emails every day from customers with praise and criticism. Apple, he believes, has always engendered strong emotion in its customers – whether positive or negative. “Customers got angry with Apple and would yell and scream – but they would keep buying,” he said. By contrast, they would simply switch suppliers between PC manufacturers such as Dell and Compaq.
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