During Apple’s quarterly earnings from investors and analysts in the first quarter of 2021, CEO Tim Cook was asked a broad question about how the company decides to enter new markets. Cook elicited an interesting response, explaining that Apple likes to work on products where hardware, software and services are required to come together.
The question comes from Morgan Stanley’s Katy Huberty, who asked Cook to elaborate without details on how Apple evaluates when a new market may be attractive.
The framework we use is that we ask ourselves if it is a product or service we want to use. This is a very high bar. Is it a big enough market to be in? Unless it’s an advanced product, it’s about customer experience. There is no fixed way to look at it, no formula. We take all these things into account.
Apple’s CEO specifically said that Apple is looking for markets where it can cross hardware, software and services:
The kind of things we like to work on are things that require hardware, software and services. Magic occurs at that intersection.
Cook further said that he believes there are some very good opportunities “for Apple:
I think we have some very good opportunities there, and if you look at our current portfolio of products, we still have a relatively low share in a number of very large markets. We feel that we have really good upside there and good upside in the services, which we have been working on for some time.
Cook, of course, did not provide any specific details about what markets Apple might want to enter. However, current rumors indicate that Apple is working on a self-driving electric car, possibly in partnership with Hyundai, as well as an AR / VR headset.
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