The Businessweek interview with Tim Cook is fascinating because it's not often you get to hear the tech titans talking about each other. CEO's of most tech companies are fairly guarded when speaking to the press, and most won't address the competition head on, but Cook didn't shirk those subjects.
I think if I bought [an Android tablet] and used it, and I thought that was a tablet experience, I’m not sure I would ever buy another tablet. The responsiveness isn’t there. The basic touch is really off. The app experience is a stretched-out smartphone kind of experience. It’s not an optimized experience. However, that said, I have always said that the tablet market was going to surpass the PC market. I was saying that well before it was viewed to be sane to say that. It’s clear that we’re 24 months away from that.
On Android's market share:
Has Android’s rise in market share surprised you in the time that it’s happened?
I don’t think of Android as one thing. Most people do. I mean, from a consumer point of view, if you look at what Amazon (AMZN) does with Android, forget the name Android for a minute. If you’re coming down from a different planet and you were going to name it, you wouldn’t name it the same thing as what another company does. If you compared that to what Samsung (005930:KS) does, I’m not sure you would name that the same thing either.
I think that the importance of that is overplayed. The truth is that there are more people using iOS 6 than there is any version of Android. And in days from now, iOS 7 will be the most popular mobile operating system. And so what does it really mean at the end of the day to show these share numbers and combine all of these disparate things as if they’re one thing? I’m not so sure it has a great meaning to it at the end of the day.
So your question, does it surprise me? I don’t look at it in the same way as you might. I think the way a consumer looks at this is different. Does a consumer that’s buying a Kindle think about it being an Android? Probably not. And so I think that’s a bit different than where Microsoft (MSFT) and Windows was.
On Android's OS fragmentation:
What’s your take on Android’s many versions? The “fragmentation” issue.
It’s a growing problem.
From a functional level?
Yes. And it’s just not growing in the—it’s not like a baby that becomes an infant. It’s not like that. It’s an exponential. It’s a compounding problem. And think about all these people that they’re leaving behind from a customer point of view. People do hold on. Most people hold on to their phones a couple of years. They enter a contract and honor that contract and then upgrade after that two-year period. So in essence, by the time they buy the phone, many of these operating systems are old. They’re not the latest ones by the time people buy. And so by the time they exit, they’re using an operating system that’s three or four years old. That would be like me right now having in my pocket iOS 3. I can’t imagine it.
It’s not because it was bad. It’s just because the world has changed and there is so much more. And so anyway, I think it is a growing issue. It will show up in developers. It will show up for people that no longer have access to certain apps. It will show up in security issues, because if you’re not moving your customer base to the latest version, then you have to go back and plug holes in all of this old stuff, and people don’t really do that to a great degree. So they are more susceptible to issues.
It just shows up in—I mean, name it. And that issue grows, and because the population is growing, it becomes bigger and bigger and bigger. So we’ll see.
On market share generally:
While these phones represent the high end of the industry, there’s another part of the industry that’s racing toward the bottom. Chinese manufacturers, Indian manufacturers, $100 phones, $150 phones. What do you think about that? What does that mean for Apple?
I think it’s important that we grow, but I don’t measure our success in unit market share. So if there are a lot of $69 tablets sold that you’re just pounding on to get something to work and get some responsiveness, and it’s thick and fat and just a terrible experience, I don’t really weigh that unit of share like I do a different unit of share. I don’t weigh them to be equivalent.
So I think in most markets in consumer electronics, there’s always a large junk part of the market. We’re not in the junk business. We don’t want to make something for that. What we want to do is make a really great product and provide a great experience. And I’m sure we’ll get enough customers that want to buy that. We want to please them.
That other business, it’s not something—we don’t spend our time obsessed of how to make a product for that because that’s just not who we are and what we’re focused on.
The most common questions about Apple: why don't they come out with a lower price iPhone for non-subsidized markets? Why do they leave a price umbrella in phones and tablets? Is Android's growing market share concerning? Cook took them all head on and seems, at least to me, very candid. The next time someone poses these questions again they can just reference this interview.
The Cook interview pairs nicely with the Ben Thompson post What Clayton Christensen Got Wrong. Christensen is the intellectual of the moment in technology the past several years with his theories of disruption from his classic text The Innovator's Dilemma. Disruption has proven to have great explanatory power in many sectors of the technology industry. But Christensen has been wrong, repeatedly, about Apple's susceptibility to disruption. Many a time he has predicted Apple will be bitten at the heels, and time after time they've been fine.
Thompson believes he knows why.
In the case of low-end disruption, the rational buyer considers the superior integrated offering and the inferior (but still good) modular offering, decides the latter is “good enough,” and buys it because it is cheaper. The buyer knows the integrated offering is better, but the buyer is unwilling to pay a premium for features the buyer does not need.
EVERY ATTRIBUTE THAT MATTERS CAN NOT BE DOCUMENTED AND MEASURED
The attribute most valued by consumers, assuming a product is at least in the general vicinity of a need, is ease-of-use. It’s not the only one – again, doing a job-that-needs-done is most important – but all things being equal, consumers prefer a superior user experience.
What is interesting about this attribute is that it is impossible to overshoot.
Given how often the tech industry rushes to apply Christensen's theories of disruption (as in most walks of life, disruption is the hammer through which the tech industry sees an infinity of naials), Thompson's article is a must read.