Apple calls tablets "the mother of all markets," Mac cannibalization not a concernThe iPad is "the poster child of the post-PC revolution," according to Apple CEO Tim Cook, who expressed no concerns about the company's industry-leading tablet undercutting sales of the Mac platform on which Apple was founded.
Apple's iPad mini, iPad, and iPhone.
Due to a combination of supply constraints and an admitted level of cannibalization due to the iPad, Apple's Mac sales dropped 17 percent last quarter, with the unit posting its lowest numbers in some time. Cook remains unperturbed by such figures.
"If you look at when we came out with the iPad, what did people worry about? They worried, 'Oh my god, you're going to kill the Mac,'" Cook explained. "The cannibalization question raises its head a lot. The truth is: we don't really think about it that much. Our basic belief is: if we don't cannibalize, someone else will."
Cook reiterated a position he espoused late last year: that the firms that have the most to worry about with regard to cannibalization by the iPad are Windows PC makers, not Apple.
"In the case of iPad particularly, I would argue that the Windows PC market is huge and there's a lot more there to cannibalize than there is of Mac, or of iPad."
iPad sales have over the last two years solidly outperformed a contracting PC market, making Apple the top PC manufacturer when tablets are counted. Cook was quite cognizant of that fact in the interview.
"If you look at the full year last year, there were more iPads sold than [market leader Hewlett-Packard] sold of their entire lineup," Cook said. "I think we're in the early part of this game. The projection is that the [tablet market] will triple in four years."
"I think if a company ever begins to use cannibalization as a primary or even major factor of what products to go to, it's the beginning of the end."The Apple CEO went on to discuss what he sees as the future of the post-PC market. The tablet sector, he said, will be huge: "the mother of all markets," in fact. Developing markets such as Brazil and China where the iPad mini debuted to high demand represent a considerable opportunity for Apple, Cook opined.
"You would find that over 50 percent of the people in countries like China and Brazil that were buying an iPad don't own an Apple product," he said. "This is a huge thing for us to go out and show people what Apple is and introduce them to the company."
That ability to bring in new customers tends to pay off for Apple, Cook noted, as new customers tend to come under the influence of Apple's "halo effect": the notion that, once a consumer has bought an Apple product, she is more likely to buy another Apple product in a different category.
"Through the years, we've found a very clear correlation between people getting in and buying their first Apple product and some percentage of them buying other Apple products."
On the whole, Cook was skeptical of the importance of cannibalization, except possibly as a metric for a company's future success. The trick, he said, is not to dwell on it
"I think if a company ever begins to use cannibalization as a primary or even major factor of what products to go to, it's the beginning of the end."
On Topic: Tim Cook
- Tim Cook's crucial role at Apple extends well beyond his 5 years as CEO
- Tim Cook's fundraiser for presidential candidate Hillary Clinton set for tonight
- Apple CEO Tim Cook touring China, pledges Asia-Pacific R&D center
- Tim Cook says AI & augmented reality are core technologies in Apple's future
- Apple CEO Tim Cook says future products will be 'in every part of your life that we can'