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tv   Bloombergs Studio 1.0  Bloomberg  June 24, 2017 10:30am-11:01am EDT

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♪ emily: it hasn't been nearly six years since tim cook took over for apple's iconic cofounder, steve jobs. each year, the company becomes more cook's own. there will be apple watch and apple music, he pulled off the largest acquisition in history buying beats. he takes on social issues like the environment, equality and , education. he stood up to president obama and maintains a relationship with president trump despite their disagreement on climate change. now, as iphone sales by still,
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question remains where the big innovation at apple will come from. he stakes out new territory for the company's future from tv to cars and apples new category in first years, a smart speaker called home pod, a direct challenger to amazon and google. on this edition of "bloomberg studio 1.0, apple ceo, tim cook. tim thank you for joining us. , tim: it is great to see you again, and unbelievable to be here. emily: let's start with the new smart speaker, why should people by apple home pod? over its competitors at this price? tim: we tried to develop a breakthrough speaker first. music is deep in our dna, dating back to itunes and ipod. and so, we wanted something that number one sounded unbelievable.
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of course it does other things, and those are important, but we wanted a high quality audio experience as well. you are excited about how these will sound in the home will i be able to make a phone , call, call a car, order groceries? tim: there are a lot of things you can do with it. one of the advantage is there are a lot of things that siri knows how to do from the phone. and so, we will start with a patch of those, and then you can bet that there is a nice follow-on activity there as well. emily: let's talk about e-commerce, which is very important. i can order paper towels on my amazon echo, does this tell us about apple's aspirations in retail? tim: i wouldn't read into it in that regard, but apple is a company that deeply cares about music, and wants to deliver a great audio experience from the
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home. we feel like we reinvented it in the portable player arena, and we think we can reinvent it in the home speaker as well. we know people want a speaker to do more than that, and so we are combining what has been thought of to be two distinctly different things until now. emily: how long have you been working on this? tim: multiple years. and so the underlying technology , and here is something to behold and to get the experience that we wanted at the quality we wanted -- you know, like apple products in general take multiple years to do. starting with core technology and building up to the product. emily: you have people saying, finally, what took so long? tim: for us it has never been about being first in anything.
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if you think back we didn't have player.rst mp3 we didn't have the first smart phone. we didn't have the first tablet. there was a tablet a decade before, very few people used it. arguably, we shipped the first modern mp3 player, the first modern smartphone, the first modern tablet, but we were not first in any of those. for us it's not about being , first, it's about being the best. emily: it is the 10th anniversary of the iphone. you have unveiled the new ios. what does that tell us about what is next? tim: i can tell you ios 11 is unbelievable. both for iphone and ipad, there are incredible things in it from peer-to-peer payments. ipad releasegest ever. an area that i have great excitement -- i am excited about
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all of it, but i am really excited about ar. as we get this in the hands of developers, we will have the largest augmented reality platform in the world. emily: you talk about ar with regards to developers, but what about consumers? when will consumers see an apple a our product? tim: with core technology, and as a platform owner, the first thing, and arguably the most important, is to build a foundation. and then from the foundation, you can do many things. emily: peter keels says that he believes that innovation in smartphones is over. are the days of quantum leaps in smartphone innovation over, or are there more quantum leaps to come? tim: i don't agree with that view at all. the thing that drives quantum leaps is the core technology. and when i think about all of the things that are going to change from a core technology point of view in the future, i
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think we are just getting started. i am incredibly excited. and clearly, there is nothing that i think of virtually anybody would say will replace smartphones anytime soon. and you know as time has gone , on, the smartphone has become more important to people's lives. when it started, the phone call was still a dominant reason or -- reason for having its, now if you look at what people are doing on smart phones, it is a minor piece of what a phone is now. when i look at that and the help -- health kit, the use in the car, i am controlling all of my house with siri using my iphone. and so i think about all of these things, the usage of it, is now -- you do not leave your
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home without your iphone. no i think it is in the early , stages, still. i don't see it in that light at all. emily: controlling your home with your device is still a fairly niche behavior. when you see it becoming more mainstream? tim: i think this year, honestly. we built it into ios 10, after that, you saw more accessories coming to the market that are home kit enabled. it is super easy to set up we . made it easier for vendors to be compatible with home kit, because you now can use software encryption. you do not have to have hardware encryption to go. i think that also unleashes more accessory guys to join. and i think people will increasingly want to automate different parts of their home. i wouldn't live without it at this point. it's one of those things at you go wow, how could i have ever
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done that in a different manner? emily: in the past you said, the ipad is the clearest expression of our vision of computing. mac sales are holding steady, ipad sales are falling. why is that? jim: we make both and i am happy with whatever people choose to buy. some people only by mac, and some people only by ipad. many of us want to both. and so what we have tried to do with the ipad is bring more productivity features to ipad. i think people buying pcs look at this and think they want to have an ipad pro, and that is great. i think people with an ipad will want to upgrade. but the mac remains a very important to us. so, i see it as both of them are computing devices and we are going to keep investing in both, because we think both have a great future. one of the reasons that ipad on
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the surface -- just look at the numbers, the units are going down, keep in mind the ipad mini came out at a point in time that smartphones were fairly small. were four 3.5 inch inch screens on their smartphone, so one of the rings you are seeing is a natural move to a smartphone not taking all of the market, but taking a piece of it and obviously we are ok with that, too. the 7-plus has been phenomenal. we are seeing growth rates that have shocked us there. ♪ emily: you called president trump and urged him not to pull out of the paris accord. tim: i did, yes. emily: he didn't listen. what does that mean for your relationship? ♪
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emily: you have been engaged with this white house here it
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you called president trump and urged him not to pull out of the paris accord. tim: i did. emily: he didn't listen. what does that mean for your relationship? tim: i would say it differently. he did listen to me. he didn't decide what i wanted him to decide. i think he decided wrong. i think it is not in the best interest of the united states what he decided. but in terms of -- you know, the way i look at this paying -- do you interact with politicians, or do you not, my view is that first and foremost, things are about -- can you help your country? and if you can help your country and do that by interacting, then you do it. country eclipses politics. and so, you know, if there is something that we can work together that helps people in the united states, then of course we would do it. emily: you have other people leaving the table though, like
10:43 am, like elon is the president -- case constituency? tim: i think there is a different between joining a council and helping your country. i think the first one is a judgment call that people make. i didn't join a council, and so it is not a decision i had to make, but i understand both sides of that. but advising on something that you believe will help america, i think is a requirement as a ceo. you definitely do that. and you know, honestly, if i get the chance to go pitch the paris agreement again, i'm going to do it again. because i think it is a very important that we engage to fight climate change on a global basis. this isn't something where you
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can solve it country by country. it requires a global action. you know emissions created in , one country affect another. it is something we feel strongly about and i wanted to do every single thing that we could do to tell how important it was to stay in the agreement. and unfortunately, he decided something different. emily: why didn't you join a council? tim: why didn't i? two reasons. my primary job is being ceo of a company. i spend the bulk of my waking hours doing that. and i do so willingly, because i love the company and people in it. and so traveling back east isn't something that i look forward to doing it except when i need to. secondly, i do not find the
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councils in general and committees to be terribly productive. but it wasn't about not wanting to advise on something where i thought that, you know, we could help or we had a point of view that should be heard. and so, i am doing the latter. i can't imagine a situation where i wouldn't do the latter. because i think it is in the best interest of america to do it. and i am first and foremost an american. presentation -- on repatriation, something important to apple, how would you like a repatriation bill to be structured? tim: in our of view it should be a deemed repatriation. meaning it should be a required pact. you are not asking people who had earnings from international subsidiaries if they would like
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to bring back money. you are saying you must pay the government x percent now or over some period of time. my own advice would be that the u.s. use that money for a significant infrastructure spend in the u.s., because it creates jobs. i think people would argue we do not need investment in america. that is what i think should be done and it should have been done years ago but it hasn't. , so, tomorrow is good. emily: you have made it clear that apple users' privacy is of utmost importance to you. even as terror attacks continue to happen around the world. does the new ios strengthen user security and privacy? tim: these terror attacks -- first of all, our heart goes out to everyone affected by them. they are her rent this and the u.k., for us we have been in the
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u.k. pretty much the whole countryf time for our -- for our company. and it feels like they are our neighbor. we have employees there and our heart goes out. what do we do helping with this, we have done one thing since the beginning of the app store is we curate the app store. and so, we do not want hate speech on there. we do not want these recruiting kind of things on their. so, we have been careful from the beginning about not having that stuff on their. i am not saying we will never make a mistake, but i do not know of a case where anything has gotten through. we have also been cooperating with the u.k. government, not only in law enforcement matters,
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but on some of the attacks. i cannot speak in detail about that, but in cases where we have information and they have gone through the lawful process, we not just give it but we do it , very promptly. i think -- i would hope that they would say that we have been cooperating well. and i think, you know, there is some valuable information. and so, there is a -- i think there is a misunderstanding about -- encryption doesn't mean there is no information, right? because likely metadata exists. and metadata, if you are putting together a profile, is very important. emily: can we assume that apple is always working to make encryption stronger? tim: the reality is that the cyberattacks on people and
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government -- it is happening left and right everywhere -- these affect your safety, your security. it is not just privacy. it is not privacy versus security. it is policy and security versus security. we are always working to stay one step ahead of the attackers who, franklyackers speaking, have gone from the guy in the basement that is a hobbyist, to a sophisticated enterprise. and it takes all that we can do to do it, and we do not think our users should have to think through all of this stuff. it is not practical for people, and so we try to stand up for users and stay one step ahead of these guys. you said cars are an area ripe for disruption. how important is it that apple not miss out on cars? ♪
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emily: let's talk about the world's second-biggest economy, china. how does apple navigate what seem to be uncertain economic and lyrical waters there? tim: we make all decisions for the long-term. we are not investing for next quarter or next year, we are thinking many years out. as i stand back and look at china, i see mega-trends that make china an incredible market, not just to sell in. i also mean for application developers. we have 1.5 million application developers in china now. probably closer to 2 million. it has been an incredible market place for talent and in terms of the size of the marketplace. and so this -- short-term kinds
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of economic moves up and down, i do not get too excited about. emily: how realistic is it to expect double-digit growth to continue for apple? tim: it didn't continue last year. emily: or the days of double-digit growth over? tim: i think we will do better this quarter than the last several. that doesn't mean that we are growing double-digit or will grow, but i think it will be better year-over-year comp over the previous ones. i feel pretty good about that. iphone is the most popular phone in china. iphone seven-plus is the third most popular smartphone in china. last year the size of our business was almost $50 billion in china. we are going to stick at it, because i think china is a huge opportunity over time. emily: how would you characterize tim cook's apple
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versus steve jobs' apple? tim: i don't think about it very much. i guess i will point out that steve's dna will always be the dna of apple, or it will be as long as i am ceo. i think it is deeply embedded in the company and we celebrate it. and it should be like that and stay like that. obviously, things evolve over time as they would have if he were sitting here interviewing with you today. sure, butclearly i'm that is a better question to ask somebody who worked for both of us. emily: you said cars are an area ripe for disruption. how important is it that apple not miss out on cars? tim: i think there is a major disruption looming there, not
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only for self driving cars, but also the electrification. if you have driven an all electric car, it is a marvelous experience. it is a marvelous experience not to stop at the gas station, whatever you call it, and so -- plus, you have ridesharing on top of this. you've got kind of three vectors of the change happening generally in the same timeframe. it --, as we looked at what we are focusing on -- what we have talked about publicly, is we are focusing on an autonomous system. clearly one aspect is self driving cars, there are others. we see it as the mother of all ai projects.
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one of the most difficult to work on. autonomy is something that is incredibly exciting for us, but we will see where it takes us. we are not really saying from a product point of view what we will do, but we are being straightforward that it is a core technology that we view as very important. emily: you are working across so many different platforms, tv, watch, iphone, mac, what you see now as your vision for the future of personal computing across all of these platforms? they aregreat thing is all built on the same core technology, right? but we have thought through how they are used and the experience needed to get the best experience for the user in each of the cases. out of that came watch ios, os, and mac ios.
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when you begin to merge, the risk is the lowest common denominator approach and we are staying away from that. i know others have a different view on that, but that is our view and we are straightforward with it. and so, with tv we wanted to , give an update that amazon was and all apple app tv's later in the year, and we will have more to say about that later. i will keep you in suspense a while there. emily: i think everyone will be speculating after that comment. we will have to leave it there. tim cook, thank you so much. tim: great to see you and spend time with you.
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♪ emily: i am emily chang and this is the best of "bloomberg technology," where we bring the top interviews from the week in tech. world's moste valuable startup and a wide investors decided it was time for travis kalanick to go and a way forward for uber. plus, facebook ceo sheryl , sandberg gives her take on big branding, the future of digital ads, and cybersecurity. and the inside track on the trump


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