CEO Tim Cook: Apple CEO Tim Cook Talks Pricing

CEO Tim Cook: Yesterday, we brought you a news story centered around Apple Inc. (NASDAQ:AAPL) CEO Tim Cook and his conversation at the Goldman Sachs’ Technology and Internet Conference. That story touched on the company’s approach to its cash hoard. It can be read in its entirety here.

Today, we are going to touch on money once again but this time around it has more to do with the pricing of Apple Inc. (NASDAQ:AAPL) devices. During the same conference, Cook was asked how the Cupertino-based company is going to deal with customers who are unable to afford the price associated with the current iPhone.

AppleInsider did a great job grabbing some of his quotes, and here is how Cook got started:

“This is a popular question. […] We wouldn’t do anything we wouldn’t consider a great product. There are other companies that do that, and that’s just not who we are.”

Before we go any further, let’s revisit that quote. What Cook is saying is simple: regardless of price, the company is not willing to lower its quality standards in any way, shape, or form. He also makes note that this is something the competition often does.

He then goes on to discuss pricing for the Apple Inc. (NASDAQ:AAPL) iPhone 4 and iPhone 4S:

“If you look at what we’ve done to appeal to people who are more price sensitive, we lowered the price for iPhone 4 and iPhone 4S, and in the December quarter, we didn’t have enough supply of iPhone 4, so it surprised us as to the level of demand we had for it.”

Cook also made special note that the cost of Apple devices have the tendency to naturally decrease over time. He backed up this claim by discussing how an iPod shuffle can be purchased today for $49, but how the original iPod had a much higher price tag.

“We are making moves to make things more affordable. Instead of saying how can we cheapen this iPod to get it lower, we said how can we do a great product, and we were able to do that. The same thing, but in a different concept in some ways.”

Despite all the conversation about iPhone pricing, Cook never gave a solid idea of when or if this could happen. That being said, Piper Jaffray analyst Gene Munster still believes this device is coming later in 2013. Here is what Munster said:

“We continue to believe Apple will have a cheaper phone product to address the emerging markets, which may or may not be similar to the existing iPhone. Additionally, we note that over time, something like the rumored smart watch could be an option in addressing emerging markets with a lower cost product through a different form factor (iPad as cheap Mac).”

What are your thoughts on what Apple Inc. (NASDAQ:AAPL) CEO Tim Cook had to say regarding pricing?

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DISCLOSURE: I have no positions in any stock mentioned.

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