During Apple’s first quarter 2021 earnings conference call with investors and analysts, CEO Tim Cook was asked how the company decides to enter new markets. Cook gave an interesting answer, explaining that Apple likes to work on products where there is a “hardware, software and service requirement together”.
The question came from Katy Huberty of Morgan Stanley, who asked Cook to elaborate – without specifying – how Apple evaluates when a new market can be attractive.
The structure we use is that we ask ourselves if this is a product or service that we would like to use. This is a very high barrier. Is the market big enough to be in? Unless it’s an advanced product, it’s about the customer experience. There is no definite way to look at it, any kind of formula. We are taking all these things into account.
The Apple CEO specifically said that Apple seeks markets where it can cross hardware, software and services:
The types of things we like to work on are those where there is a requirement for hardware, software and services together. The magic occurs at this intersection.
Cook also said he believes there are “some really good opportunities” for Apple:
I think we have some really good opportunities out there and if you look at our current product portfolio, we still have a relatively low share in several very large markets. We feel that we have a very good upside there and a good upside in the service area, which we have been working on for some time.
Cook, of course, did not provide any specific details about the markets that Apple intends to enter. Current rumors, however, indicate that Apple is working on an autonomous electric car, potentially in partnership with Hyundai, as well as an AR / VR headset.
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