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During Apple’s first quarter 2021 earnings conference call with investors and analysts, CEO Tim Cook was asked a general question about how the company decides to enter new markets. Cook provided an interesting response, explaining that Apple likes to work on products where “hardware, software and services have to come together”.
The question came from Katy Huberty of Morgan Stanley, who asked Cook to explain – without details – how Apple assesses when a new market might be attractive.
The framework we use is that we ask ourselves if this is a product or a service that we would like to use. That’s a pretty high bar. Is it a big enough market to be there? Unless it’s an advanced product, it’s about customer experience. There is no fixed way that we envision, no formula. We take all of these things into account.
Apple’s CEO specifically said that Apple is looking for markets where it can intersect hardware, software and services:
The types of things we like to work on are the ones that hardware, software, and services need to come together. The magic happens at this intersection.
Cook added that he believed there were “some really good opportunities” for Apple:
I think we have some really good opportunities and if you look at our current product portfolio, we still have a relatively small share in a number of very large markets. We think we have a very good advantage there and a good advantage in the service area, which we have been working on for some time.
Cook, of course, didn’t provide specific details on which markets Apple might consider entering. 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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