Speaker 1: I'm Carol Masser and I'm Tim Stanevik the cover story
Speaker 1: this week. Ten years ago, Tim Cook became CEO of Apple,
Speaker 1: succeeding co founder Steve Jobs. In the decades since Cook's
Speaker 1: Apple has soared to a market cap of two point
Speaker 1: three trillion dollars, the most of any company, and could
Speaker 1: reach three trillion in twelve months. The revenue looks endless.
Speaker 1: It really does. So how has Cook transformed the company
Speaker 1: by expanding its portfolio products and services, deepening the company's
Speaker 1: relationship with China, and navigating complicated geopolitics during the Trump presidency,
Speaker 1: all while fending off antitrust scrutiny and using privacy to
Speaker 1: skewer competitors such as Facebook and as critics are swift
Speaker 1: to point out, Apple today looks increasingly like the IBM
Speaker 1: of yesteryear, especially the one depicted in its famous commercial.
Speaker 1: Of course, Cook happened to work at IBM. Tim Cook's
Speaker 1: two point three trillion dollar fortress trade war Trump please
Speaker 1: antitrust Zoock's problem, Ditto privacy Revenue endless by Austin Carr
Speaker 1: and Mark German. Joe Biden had a question for Tim
Speaker 1: Cook why the then vice president wanted to know, couldn't
Speaker 1: Apple make the iPhone in the US. It was January,
Speaker 1: during President Barack Obama's re election campaign and three months
Speaker 1: after the death of Cook's predecessor, Steve Jobs. Biden was
Speaker 1: in Palo Alto for a dinner meeting with Cook and
Speaker 1: a group of tech leaders that included Netflix chief executive
Speaker 1: officer Read Hastings, Google executive chairman Eric Schmidt, and Facebook
Speaker 1: chief operating officer Cheryl Sandberg. As everyone at the dinner
Speaker 1: well knew, the idea of mass producing an iPhone or
Speaker 1: any advanced consumer electronics in a domestic factory was an
Speaker 1: exceptionally tall order. The big Asian contract manufacturers, especially Apple's
Speaker 1: main partner Fox con, had built city size factories in
Speaker 1: China with armies of hundreds of thousands of skilled laborers.
Speaker 1: None of that scale existed in the US. Chinese factory
Speaker 1: employees generally worked much longer hours for a fraction of
Speaker 1: what even the lowest paid American workers make. I'm not sure,
Speaker 1: short of dictatorial practices, that you could ever make that work,
Speaker 1: says John Richard Tello, another Silicon Valley executive who witnessed
Speaker 1: the exchange between Cook and Biden. Biden's question put Cook,
Speaker 1: who had become Apple CEO the previous August, in an
Speaker 1: awkward position. He was the architect of the strategy to
Speaker 1: outsource Apple's production to China, a trend of increasing concern
Speaker 1: for the Obama administration. But Cook was also, as it
Speaker 1: turned out, extremely effective at deflecting political pressure. He was
Speaker 1: certainly more diplomatic than his old boss. Obama once asked
Speaker 1: jobs the same question, and jobs is characteristically blunt reply
Speaker 1: landed on the front page of the New York Times,
Speaker 1: those jobs aren't coming back. Cook, though, was smooth and
Speaker 1: non combative, so much so, in fact, that Richichello can't
Speaker 1: recall exactly what he said to Biden. By the end
Speaker 1: of that year, Cook announced a small yet politically significant
Speaker 1: shift Apple, he said, would start making some mas in
Speaker 1: the US, and then Apple's reliance on China only grew.
Speaker 1: You might think It's ever tighter embraced with the country
Speaker 1: would have put Cook in a worse political position. After
Speaker 1: Donald Trump was elected president in twenty sixteen, based on
Speaker 1: a campaign marked by anti China rhetoric, threats of a
Speaker 1: trade war, and promises to bring jobs loss to Shunjun
Speaker 1: back to American shores, not to mention the challenges of
Speaker 1: the coronavirus pandemic and rising antitrust fervor during his term
Speaker 1: in office. Strangely, though Apple thrived under Trump. In August
Speaker 1: twenty eighteen, the company's market value reached one trillion dollars.
Speaker 1: Twenty four months later, even as Trump bellowed on the
Speaker 1: campaign trail that these stupid supply chains in China should
Speaker 1: move home, it surpassed two trillion dollars. Current and former employees,
Speaker 1: executives at rival companies, and Washington insiders credit this to
Speaker 1: Cook's shrewd management, equally shrewd politicking, and zero reluctance to
Speaker 1: wield Apple's market power. Tim Apple, as Trump once called him,
Speaker 1: charmed and cajoled his way into the former president's good
Speaker 1: graces while keeping Beijing happy and finding ways to squeeze
Speaker 1: more revenue from the iPhone. Cook's handling of Trump suggests
Speaker 1: how Apple, which declined to comment for this story, might
Speaker 1: approach now President Biden. Over the next four years. His
Speaker 1: White House will continue pushing to increase US manufacturing and
Speaker 1: may support congressional scrutiny of potentially anti competitive practices egged
Speaker 1: on by Facebook and other companies that say Apple exercises
Speaker 1: too much power, but Cook has been counterpunching, broadening his
Speaker 1: influence over the mobile phone industry while marketing Apple's commitment
Speaker 1: to privacy as the antidote to the practices of social
Speaker 1: media companies. Moreover, Cook's unflappable temperament makes him well suited
Speaker 1: to the polarized political climate. Allies praised his operational skills
Speaker 1: and diplomatic instincts. Tim may not be able to design
Speaker 1: a product like Steve, says Warren Buffett, who knows Cook
Speaker 1: well and whose Berkshire Hathaway has a stake in Apple
Speaker 1: worth one and eleven billion dollars as of a September filing.
Speaker 1: But Tim understands the world to a degree that very
Speaker 1: very few CEOs I've met over the past sixty years
Speaker 1: could match. Cook came to Apple in after a dozen
Speaker 1: years at IBM and a six month stint at Compact,
Speaker 1: and seemed, at least to old Apple hands, devoid of
Speaker 1: any obvious personality. He'd work eighteen hour days and send
Speaker 1: emails all through the night when he wasn't in the office.
Speaker 1: He seemed to live at the gym. Unlike jobs, he
Speaker 1: had no pretensions to being an artist. Tim was always
Speaker 1: pure work, grind, grind, grind grind, says one former Apple
Speaker 1: executive who worked with Cook in his early years at
Speaker 1: the company and who, as with other sources in this story,
Speaker 1: spoke on the condition of anonymity because of non disclosure
Speaker 1: agreements and fear of corporate reprisals. I always found him
Speaker 1: exceptionally boring. Apple's turnaround in the ensuing years has generally
Speaker 1: been attributed to Jobs as product genius, beginning with the
Speaker 1: candy colored Imax that turned once beige appliances into objade
Speaker 1: to office. But equally important in Apple's transformation into the
Speaker 1: economic and cultural force it is today was Cook's ability
Speaker 1: to manufacture those computers and the iPods, iPhones and iPads
Speaker 1: that followed in massive quantities. For that, he adopted strategies
Speaker 1: similar to those used by HP, Compact, and Dell companies
Speaker 1: that were derided by Jobs but had helped usher in
Speaker 1: an era of outsourced manufacturing and made to order products.
Speaker 1: Back when Cook was managing Compacts hardware inventory, he became
Speaker 1: friendly with Fox confounder Terry Guo. According to two people
Speaker 1: who've worked closely with Cook, the Taiwanese company had started
Speaker 1: as a lower end manufacturer. Early products included the plastic
Speaker 1: channel changing knobs for televisions and connectors for Atari joysticks,
Speaker 1: but by the late nineteen nineties fox kN had graduated
Speaker 1: to more complex manufacturing, such as making computer chassis for Compact.
Speaker 1: Fox Con eventually moved on to other PC parts, which
Speaker 1: it produced in sprawling factories around Shunjn, near component suppliers.
Speaker 1: By the time Cook joined Apple, these centralized factory hubs
Speaker 1: were far more efficient than anything in the US. Apple
Speaker 1: sold off a huge Colorado plant in and after Cook arrived,
Speaker 1: he temporarily cut its Ireland based manufacturing workforce, closed what
Speaker 1: was then its only remaining American production line in Elk Grove, California,
Speaker 1: and outsourced more and more production to China, starting with
Speaker 1: laptops and webcams. The Elk Grove facility is now used
Speaker 1: for refurbishing and hairs. Cook's global supply chain greatly improved
Speaker 1: upon the fabrication approaches that Dell and Compact had developed.
Speaker 1: The big PC brands often outsourced both manufacturing and significant
Speaker 1: design decisions, resulting in computers that were cheap but not distinctive.
Speaker 1: Cook's innovation was to force fox Con and others to
Speaker 1: adapt to the extravagant esthetic and quality specifications demanded by
Speaker 1: Jobs and Industrial design head Johnny I've Apple engineers crafted
Speaker 1: specialized manufacturing equipment and traveled frequently to China, spending long hours,
Speaker 1: not in conference rooms as their PC counterparts did, but
Speaker 1: on production floors, hunting for hardware refinements and bottlenecks on
Speaker 1: the line. Contract manufacturers worked with all the big electronics companies,
Speaker 1: but Cook set Apple apart by spending big to buy
Speaker 1: up next generation parts years in advance and striking exclusivity
Speaker 1: deals on key components to ensure Apple would get them
Speaker 1: ahead of rivals. At the same time, he was obset
Speaker 1: best with controlling Apple's costs. Daniel Vidagna, then a supply
Speaker 1: management director, says Cook particularly fussed over fulfillment times. Faster
Speaker 1: turnarounds made customers happier and also reduced the financial strain
Speaker 1: of storing unsold inventory. Vidanna remembers him saying that Apple
Speaker 1: couldn't afford to have spoiled milk. Cook lowered the company's
Speaker 1: month's worth of stockpiles two days and touted, according to
Speaker 1: a former longtime operations leader, that Apple was out delling
Speaker 1: Dell in supply chain efficiencies, Guo always seemed happy to accommodate,
Speaker 1: often building entire factories to handle whatever minimalist cheek design
Speaker 1: specs Apple through. At Fox Con, John Rubinstein, a senior
Speaker 1: vice president for hardware engineering during jobs second tour at Apple,
Speaker 1: recalls almost having a heart attack in two thousand five
Speaker 1: when he went with Guo to see a new factory
Speaker 1: in Shunjan for the iPod Nano, a tiny device smaller
Speaker 1: than Apple's original MP three player, only to find an
Speaker 1: empty field within months. Though a large structure and production
Speaker 1: line were in place in the US, you couldn't even
Speaker 1: get the permits approved in that time frame, he says,
Speaker 1: Jobs and I've had expensive tastes, which made it all
Speaker 1: the more crucial for Cook's team to be unforgiving. When
Speaker 1: negotiating with suppliers for a custom enclosure designed by Ive's
Speaker 1: team to elegantly hold the USB ports on a Mac laptop,
Speaker 1: the former longtime operations leader recalls the company paying roughly
Speaker 1: triple the five cents or so that PC rivals were
Speaker 1: spending for a generic version of the same basic part.
Speaker 1: This person remembers literally negotiating down to four decimal points
Speaker 1: to make it economic. A former product operations manager says,
Speaker 1: even if a supplier promised something as simple as a
Speaker 1: delivery date for a part, it was normal to press
Speaker 1: for the tracking number for each individual shipment as part
Speaker 1: of a litany of detailed logistics and pricing demands. Apple's
Speaker 1: power over suppliers grew after the release of the I phone,
Speaker 1: which Fox Con manufactured and which sold four million units
Speaker 1: in its first two hundred days. By two thousand nine,
Speaker 1: an iPhone supply manager says Apple increasingly took on a
Speaker 1: brute force approach to dealing with suppliers In Asia. I
Speaker 1: could say you do it this way, or your toast,
Speaker 1: this manager says, adding that Apple started to just beat
Speaker 1: the crap out of its vendors jobs as death two
Speaker 1: years later caused skeptics to predict Apple would stagnate without
Speaker 1: a steady stream of his inventions. In fact, the real
Speaker 1: challenge was keeping supply up. In China, operations managers were
Speaker 1: scrambling to buy enough computer controlled milling machines and laser cutters.
Speaker 1: Every millimeter was scrutinized for savings, as were even the
Speaker 1: seemingly least consequential parts. Three people familiar with the company's
Speaker 1: supply chain, say, there was an Apple employee whose job
Speaker 1: consisted of negotiating the cost of glue. In the post Jobs,
Speaker 1: Apple i've's influence began to wane, while Cook asserted a
Speaker 1: more cost conscious approach to new products. He ordered his
Speaker 1: operations team to work closely with the industrial design group
Speaker 1: from the earliest stages of the development process, rather than
Speaker 1: joining months in, as had been the norm under Jobs.
Speaker 1: iPhone six was the poster child of this transformation, according
Speaker 1: to a person involved in the product's development, While the
Speaker 1: device had complex internal components and a larger screen, it
Speaker 1: dropped the diamond polished edges and the precisely cut glass
Speaker 1: parts of the back of the iPhone five and five s,
Speaker 1: which had been difficult to produce. Even the company's spaceship
Speaker 1: esque headquarters, The design of which Jobs had micromanaged, didn't
Speaker 1: escape the new financial discipline. According to a person familiar
Speaker 1: with its construction, Cook's allies tried to aggressively drive down
Speaker 1: extravagant expenses, including for the curved glass now surrounding the building,
Speaker 1: which The Wall Street Journal reported was originally expected to
Speaker 1: cost as much as one billion dollars. Meanwhile, Cook expanded
Speaker 1: the business in ways jobs used to resist Jobs. Loved
Speaker 1: to point out that Apple's product lineup was so unrelentingly
Speaker 1: spare it could fit on a small table. At the
Speaker 1: time of his death, Apple sold two iPhones and one iPad.
Speaker 1: Today it offers seven iPhones and five iPads. Cook also
Speaker 1: added high priced products that amounted to accessories for the
Speaker 1: flagship mobile devices, such as air pods and the Apple Watch.
Speaker 1: And yet, even as Cook transformed Apple into a more
Speaker 1: diversified company, its dependence on China grew. The only way
Speaker 1: to drive economies of scale and manufacturing consistency was to
Speaker 1: concentrate more and more of Apple's output in areas such
Speaker 1: as Shunjun. If you're talking about making a million a
Speaker 1: day of something launching on a dime and having the
Speaker 1: capacity to do that, every machine has to be precise,
Speaker 1: and to have that happening in multiple countries as challenging,
Speaker 1: says a former top executive, The question becomes, are you
Speaker 1: relying too much on one place. In November twenty nineteen,
Speaker 1: a year before the presidential election, Trump flew to Austin
Speaker 1: to meet Cook and tour Apple's mac pro factory in
Speaker 1: front of a gaggle of White House press, Cook called
Speaker 1: the Mac Pro a five thousand nine dollar computer aimed
Speaker 1: at creative professionals, an example of American design, American manufacturing,
Speaker 1: and American ingenuity. At another point, the pair leaned close
Speaker 1: together so Cook could show off the computer's components as
Speaker 1: Trump nodded approvingly. Many of the parts Cook noted came
Speaker 1: from places such as Arizona and Pennsylvania, key swing states
Speaker 1: where Trump had promised to bring more manufacturing jobs. Trump
Speaker 1: touted the plant as a campaign pledge fulfilled. I said
Speaker 1: someday we're going to see Apple building plants in our country,
Speaker 1: not in China, he told reporters. And that's what's happening.
Speaker 1: It's all happening. It's all the American dream. Cook looked
Speaker 1: on soberly and didn't mention what was obvious to factory
Speaker 1: employ ease Trump was lying. The facility had been in
Speaker 1: operation for Apple for six years. During Trump's time in office,
Speaker 1: he and Cook forged an unlikely friendship that upset liberal
Speaker 1: leaning Apple veterans, who couldn't imagine Cook's infamously temperamental predecessor
Speaker 1: tolerating any co option of Apple's brand name by someone
Speaker 1: as boorish as Trump. Cook, who supported Hillary Clinton in
Speaker 1: the presidential campaign, voiced disagreement over Trump's approach to immigration,
Speaker 1: racial unrest, and climate change, but he also attended the
Speaker 1: president's CEO summits, as well as dinners at the White
Speaker 1: House and at the President's golf club in Bedminster, New Jersey,
Speaker 1: and bonded with his daughter Ivanka and his son in
Speaker 1: law Jared Kushner Gary Kohene, Trump's chief economic advisor until estimates,
Speaker 1: Cook came to Washington every four to six weeks, far
Speaker 1: more frequently than other Texi eos. He made it part
Speaker 1: of his agenda to figure out where we could work together,
Speaker 1: says Own. Our dinners weren't talking all about Apple, tariffs
Speaker 1: and technology, I'd say sev was talking about life. To
Speaker 1: be a good CEO, to get things accomplished, you have
Speaker 1: to be personable, you have to be a good communicator
Speaker 1: and a good listener. And Tim was all of those things.
Speaker 1: Cook was willing to do what was necessary to protect
Speaker 1: Apple's China centric supply chain, even if that meant letting
Speaker 1: Trump spin falsehoods. Trump told The Wall Street Journal in
Speaker 1: mid that Cook personally promised to build three big plants,
Speaker 1: beautiful plants in the US, which was false as well,
Speaker 1: and which Apple declined to correct. After the photo op
Speaker 1: in Austin, Trump tweeted today I opened a major Apple
Speaker 1: manufacturing plant in Texas that will bring high paying jobs
Speaker 1: back to America. Apple let that one slide to. Current
Speaker 1: and former employees familiar with the Mac pros development say
Speaker 1: the Texas event was an embarrassment. The factory had undergone
Speaker 1: some remodeling since it was first used to assemble the
Speaker 1: Mac pro, but again, it wasn't new. Moreover, Flex Limited,
Speaker 1: the contract manufacturer that operates the Austin plant, prepped for
Speaker 1: the event by manicuring the production floor as if it
Speaker 1: were a stage set. New computers were put on display
Speaker 1: to look like we're selling these things like hotcakes, recalls
Speaker 1: one engineer. Many employees were given the day off and
Speaker 1: the select few allowed to stay. We're mostly pretending to
Speaker 1: work in the background in their blue uniforms. According to
Speaker 1: another staffer, it was very much a show. This person, says,
Speaker 1: Cook seemed to understand that though Apple was vulnerable to
Speaker 1: Trump's anti China belicocity, he also could use the company's
Speaker 1: reputation and his glad handing as enticement for a president
Speaker 1: who craved mainstream business validation. Tim was very good at
Speaker 1: giving the President optics because Apple is an iconic consumer brand,
Speaker 1: says a former senior Trump administration official. You've got their
Speaker 1: CEO working with the White House, sitting in meetings, traveling
Speaker 1: with Ivanka. You always want to attach yourself to a
Speaker 1: good brand. The Texas factory itself had long been a disappointment,
Speaker 1: according to former employees who worked on the project since
Speaker 1: its Obama era inception. It was an experiment to prove
Speaker 1: that the US supply chain could work as good as China's,
Speaker 1: and it failed miserably, says a former senior manager. Apple
Speaker 1: chose to produce the first iteration of its assembled in
Speaker 1: USA mac Pro in Austin because it was expensive and
Speaker 1: sold in low volume, which allowed more margin for cost
Speaker 1: overruns while ensuring that any losses wouldn't be disastrous. According
Speaker 1: to people familiar with the matter, the mac Pro is
Speaker 1: also much bigger than a smartphone, meaning that in theory,
Speaker 1: it should have been easier to make than something as
Speaker 1: compact and exacting as an iPhone or Apple Watch. But
Speaker 1: then supply chain managers saw an early mock up of
Speaker 1: the cylindrical design that Ive's team had created which made
Speaker 1: the Mac Pro look like something out of Star Wars.
Speaker 1: Apple's partners in Asia had been able to handle such
Speaker 1: oddball design specs, but employees involved with the U S
Speaker 1: Flex factory, who had been expecting a boxy shape that
Speaker 1: resembled previous versions of the device, were alarmed. They initially
Speaker 1: worried about having to fit square parts in a circular case,
Speaker 1: according to a former senior level Apple employee, When Apple
Speaker 1: engineers started setting up manufacturing in Texas, sources familiar with
Speaker 1: the matter say they had a difficult time finding local
Speaker 1: suppliers willing to invest in retooling their factories for a
Speaker 1: one off Mac project. According to a former Apple supply
Speaker 1: chain worker, huge quantities of certain components needed to be
Speaker 1: imported from Asia, which caused a domino effect of delays
Speaker 1: and costs. If a shipment arrived with defective parts, For example,
Speaker 1: the Texas factory had to wait for the next air
Speaker 1: cargo delivery. At factories in Hunjun, supply replacements were a
Speaker 1: short drive away. It felt like the opposite of Wuoes
Speaker 1: ultra efficient all in one Fox con hubs. We really
Speaker 1: emphasized with the suppliers to triple check their product before
Speaker 1: they put it on a plane to Texas. This worker
Speaker 1: says it was a pain. Recruiting was another challenge. Skills
Speaker 1: common at fox Con were harder to find in the US,
Speaker 1: where new hires might have worked previously at a cost
Speaker 1: co rather than at a different electronics factory. An ex
Speaker 1: Apple product engineer remembers the team struggling to determine why
Speaker 1: circuit boards coming off the assembly line were crooked. They
Speaker 1: ultimately traced the problem to a single worker who was
Speaker 1: inexplicably screwing in parts from left to right instead of
Speaker 1: by the numbered order. Flex provided. Scrap was high at first,
Speaker 1: and several sources say the teams missed their initial delivery
Speaker 1: and cost targets. Once the products assembly stabilized, Apple employees
Speaker 1: moved on to other more pressing supply chain projects, such
Speaker 1: as manufacturing the Apple Watch, which inevitably was made in China.
Speaker 1: Demand for the cylindrical mac pro was weaker than anticipated,
Speaker 1: and layoffs eventually followed. Flex. Whatever the Austin Plants problems,
Speaker 1: it's political benefits were tremendous. In September, the U S
Speaker 1: granted exemptions on tariffs for importing multiple parts key to
Speaker 1: the macpros future. Days later, Apple said it would make
Speaker 1: a new version of the computer, which the company redesigned
Speaker 1: into a simpler, boxy case, in Texas. During his November
Speaker 1: nineteen factory tour, Trump said he'd be looking into more
Speaker 1: terror for leaf for Apple, which it received in subsequent
Speaker 1: months on the iPhone, iPad, and Apple Watch. Cook later
Speaker 1: gave Trump the first of the new MacPro model produced
Speaker 1: at the Austin factory, according to a White House disclosure form. Still,
Speaker 1: a person familiar with the Austin plant says it struggles
Speaker 1: even today. In a statement, Flex says it is very
Speaker 1: proud of our excellent production capabilities and sustainable innovative supply
Speaker 1: chain solutions. Meanwhile, Apple has moved some production of air
Speaker 1: pods to Vietnam and iPhone to India, where the company
Speaker 1: has run into scale and quality issues too. More significant
Speaker 1: manufacturing diversification is likely to take years, even as Cook
Speaker 1: faces pressure to decouple from China over censorship, human rights violations,
Speaker 1: and criticism about labor conditions at mainland factories. In an
Speaker 1: all hands meeting last year, an employee asked Dan Richio,
Speaker 1: than Apple's hardware chief, why the company continues to build
Speaker 1: products in China given these ethical problems, the crowd cheered, Well,
Speaker 1: that's above my pay grade, he responded, before adding that
Speaker 1: Apple was still working to expand its manufacturing presence beyond China.
Speaker 1: Not even the COVID pandemic, which temporarily shuttered Fox confactories
Speaker 1: in early could loosen China's grip on the bulk of
Speaker 1: Apple's iPhone production. While commercial flights in and out of
Speaker 1: China were suspended, Apple chartered private jets to fly hundreds
Speaker 1: of employees to the country to oversee production and testing
Speaker 1: and ensure the new models hit before with a critical
Speaker 1: holiday season. According to a person familiar with Apple's logistics,
Speaker 1: A long time Apple operations manager also notes that Fox
Speaker 1: Con was still able to produce early versions of the
Speaker 1: iPhone even at the height of the pandemic. There is
Speaker 1: no way you can just move away from China, especially
Speaker 1: at Apple's volumes, this person says. On January seven, Apple
Speaker 1: announced there are now more than one billion active iPhones
Speaker 1: in the world. It's a stellar achievement for cook to
Speaker 1: have navigated these unprecedented times for Apple supply chain, with
Speaker 1: a cold tech war between the US and China. If
Speaker 1: you look back at the last few years, many investors
Speaker 1: were betting that it was going to blow up and
Speaker 1: be a huge black cloud over Apple, says Wedbush Securities
Speaker 1: analyst Dan Ives, who believes the company, which had a
Speaker 1: market cap of two point three trillion dollars as of
Speaker 1: early February, could hit three trillion dollars in the next
Speaker 1: twelve months. He's done a great job being an unofficial
Speaker 1: ambassador between the Beltway and China. Even with Trump out
Speaker 1: of the White House, Cook's tight rope tiptoeing isn't finished.
Speaker 1: Two days before Apple's earnings report, Biden announced a Buy
Speaker 1: American initiative to boost US production. I don't buy for
Speaker 1: one second that the vitality of American manufacturing is a
Speaker 1: thing of the past, he said. In many ways, Cook
Speaker 1: is now applying the lessons Apple learned building its China
Speaker 1: manufacturing network to other parts of the business. Its operational
Speaker 1: prowess has enabled it to churn out more product permutations
Speaker 1: and accessories, and just as Apple uses its awesome buying
Speaker 1: power to extract concessions from suppliers, it's now using its
Speaker 1: control over an equally impressive digital supply chain, which includes
Speaker 1: the company's own subscription services as well as third party
Speaker 1: apps to generate greater revenue from customers and software developers.
Speaker 1: In an October report on the tech industry, the House
Speaker 1: Antitrust Subcommittee said this influence of its app store amounted
Speaker 1: to monopo Holly power and recommended that regulators step in.
Speaker 1: Apple disputed the characterization, but software developers including Spotify, Epic Games,
Speaker 1: and Facebook made similar allegations. Facebook CEO Mark Zuckerberg in
Speaker 1: January accused Apple of using their dominant platform position to
Speaker 1: interfere with apps and targeted advertising. In August, Epic sued Apple,
Speaker 1: alleging that it maintains a stranglehold on mobile phone developers
Speaker 1: by forcing them to use its Apple Store and billing system,
Speaker 1: and taking up to a thirty percent cut of revenue
Speaker 1: in the process. Epic CEO Tim Sweeney says that though
Speaker 1: he's a fan of cook and jobs for disrupting an
Speaker 1: industry once dominated by the likes of IBM and Microsoft,
Speaker 1: he believes Apple is behaving like its old arch nemeses.
Speaker 1: They do a lot of things that we think are
Speaker 1: awesome and totally support, and they do some things that
Speaker 1: we think are just wrong. He says. This summer, Epic
Speaker 1: launched an ad campaign to pressure Apple to let it
Speaker 1: handle in app purchases in its popular video game Fortnite
Speaker 1: and therefore avoid paying Apple sales fees. It included a
Speaker 1: viral YouTube video riffing on Apple's famous ad, with a
Speaker 1: Cook like character playing the villainous IBM Big Brother Roll. Cook,
Speaker 1: of course, worked at IBM. In None of this has
Speaker 1: seemed to throw Cook or Apple. The company countersued epic
Speaker 1: in September, and in late January, Cook went after Facebook,
Speaker 1: suggesting that those criticizing his company's privacy policies simply wanted
Speaker 1: to harvest more personal data and that regulators should scrutinize
Speaker 1: social media instead of Apple. If a business is built
Speaker 1: on misleading users, on data, exploitation on choices that are
Speaker 1: not choices at all, then it doesn't deserve our praise.
Speaker 1: It deserves reform, he said in a speech delivered over
Speaker 1: video chat at a privacy conference. Around the same time,
Speaker 1: amid yet another surge in COVID cases and continued economic uncertainty,
Speaker 1: the company reported revenue on eleven billion dollars for the
Speaker 1: previous quarter, a record, and that is this week's cover
Speaker 1: story in Bloomberg Business Week. Magazine. Find out more in
Speaker 1: the current issue of the magazine. It's on newsstands, online
Speaker 1: at Bloomberg dot com and on the Bloomberg Terminal, and
Speaker 1: be sure to to listen to our Bloomberg Business Week
Speaker 1: Radio show, airing live Monday through Friday at two pm
Speaker 1: Wall Street Time on Bloomberg Radio. Watch us two on
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Speaker 1: I'm Carol Masser. This is Bloomberg. Join us on February
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