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Apple CEO Cook: We Don't Do Junk

Apple is more than a hardware company. But it still needs to raise the quality of its software and services.
Apple, insists CEO Tim Cook, "isn't in the junk business."

Junk probably isn't the first thing that comes to mind when thinking about Apple products. The current crop of Apple ads presents the company's product as the antithesis of junk, as works of passion and art.

But what business is Apple really in? It has traditionally been a hardware company that relied on software as a barrier to competition and a vehicle for customer satisfaction. It's much more than that these days. Its software has become a platform for partners, for commerce.

It was always thus for software developers who created applications for Macintosh computers. But there's more to it now than applications in a niche market.

[ Learn more about iOS 7. View Apple iOS 7: Visual Tour. ]

Thanks to Apple's iTunes App Store, Apple's platform supports developers, publishers, musicians and video makers. Its platform has mass market appeal. In the company's fiscal 2012, iTunes, Software and Services generated $12.8 billion in revenue, more than half the revenue generated by Mac sales. The iPhone and iPad during this period accounted for almost $110 billion in revenue, so Apple clearly remains a hardware company but the software side is growing rapidly. iTunes, Software and Services grew 25% in the company's third fiscal quarter of 2013.

The software and services segment represents Apple's fastest growing business in the past year. And while the company's latest software release, iOS 7, most definitely isn't junk, its software isn't always as polished as its hardware, as Apple's poorly received iOS 6 Maps app demonstrated.

Other examples include the performance issues that plagued iCloud last year, lack of enthusiasm for its iAds service and its Ping social network, the bungled initial release of Final Cut Pro X and the lynchpin of its software ecosystem, the widely derided iTunes application.

Back in late 2005, while the iPhone was being developed, Apple co-founder Steve Wozniak complained about his former company's focus on hardware and its lack of attention to software. "I get the worst, worst software almost always from Apple," he said in an interview with the Stanford Cardinal Inquirer. "I get third-party stuff and it's almost always just better, cleaner and more understandable."

Perhaps Wozniak has revised his opinion since then -- he hasn't responded to query -- but others have said as much.

In any event, it seems great software comes from small companies, which would explain why Apple and its competitors often order out for innovation, acquiring startups and turning their ideas into mass market applications.

Apple of course changed a lot since 2005, and its enormous financial success tends to render such criticism, almost eight years on, moot. But it's an issue that Apple needs to address. Apple isn't in the junk business but its software remains uneven. Even high-profile projects like Siri are a mixed bag, at turns brilliant and infuriating.

Cook made his remark in a BusinessWeek profile of three top Apple executives, the other two being Jonathan Ive, the company's head of design, and Craig Federighi, who oversees the company's software. He was drawing a distinction between what he sees as the two parts of the bifurcated mobile market: customers who want a quality product and customers want an inexpensive product.

Apple competes for the former, Cook says, and isn't particularly concerned about the latter. Let them eat Android, in other words. Until recently, Apple's software inconsistency paled beside the mess that was Android. But Android stopped stumbling around, got help and now competes on a more or less even playing field -- the very same playing field that Apple is on, as much as Cook would have us believe otherwise.

Federighi's presence in the interview represents a reason to believe Apple is looking to software to do more than just support its hardware. Federighi took on the responsibilities of Scott Forstall, Apple's former head of iOS software, ousted last year after the Maps debacle. But Federighi purview extends beyond iOS. He's the senior VP of software engineering at Apple. Between Federighi and Eddy Cue, senior VP of Internet software and services, Apple has the management to make its software to the same exacting standards as its hardware.

The problem is software is hard. Quality control issues are clearer in hardware. Bugs can be insidious.

iOS 7 shows what Apple can do when the company devotes as much attention to the design of its software and services as it does to its hardware.

No doubt there's still work to be done, but at least software can be improved over time. The question is how much time Apple can afford with Google, Microsoft, Samsung and the rest of the technology industry nipping at its heels.