Apple Inc. (AAPL): What Did Tim Cook Have to Say Today?

If Apple were going to increase its dividend, which seems inevitable at this point, it would most certainly announce such a move on its own terms instead of at a conference hosted by a third party.

Forget specs
When the discussion turned to larger screen sizes, Cook points out how Apple has shifted the basis of competition away from mere specifications — previously unthinkable for a consumer electronics company. Once upon a time, vendors primarily advertised things like hard drive capacity or processor clock speed; Apple is perhaps the only smartphone vendor that doesn’t publicly advertise the speed of its mobile processors, a figure that takes some digging to ascertain.

Instead, Apple has been able to shift the focus to the overall experience, says Cook:

Do you know the speed of an A-X processor? Does it really matter at the end of the day? You want a fabulous experience when you use the product. If you look at displays, some people are focused on size. There are a few other things about the display that are important.

Cook emphasizes not to take his comments as indications of what Apple will or won’t do in the future, leaving the possibilities of more affordable iPhones and larger iPhones on the tablet.

He didn’t say no
When it comes to an affordable iPhone, Cook says that Apple isn’t focused on hitting specific price points and instead just wants to make a great product. It has many ways to do this to appeal to consumers that are more price sensitive, but it won’t compromise on quality.

By his estimates, the iPhone is only available to about 50% of mobile subscribers in the world, so there’s plenty of opportunity still within the smartphone market even without a lower-cost device.

Fret not
Whenever Apple introduces a new product, investors and analysts tend to fret over cannibalization. Apple has never worried about cannibalization and Cook’s philosophy is that if use cannibalization as a major determining factor when deciding which products to pursue, then that signals the beginning of the end, since the company is losing sight of what really matters.

That’s why Apple isn’t worried about the iPad Mini eating into iPad sales, and also hints that it wouldn’t be too concerned about an affordable iPhone grabbing some flagship iPhone sales. Ultimately, so long as Apple maintains a similar gross margin profile, investors shouldn’t worry, either.

The article What Did Tim Cook Have to Say Today? originally appeared on Fool.com and is written by Evan Niu, CFA.

Fool contributor Evan Niu, CFA, owns shares of Apple. The Motley Fool recommends Apple and Goldman Sachs. The Motley Fool owns shares of Apple.

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