This is Tim: Cook at the 2013 Goldman Sachs conference

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In addition, it’s fueling an incredible economic gain for developers. And so we’ve already gone over paying $8 billion now to developers. If you look back at the app economy of the PC market, or look at it today, there’s money flowing to two or three people, but you don’t see a large number of people doing PC apps. I mean, I challenge you to find any, except the usual suspects now; the money’s all moved—the innovation has all moved to tablets and smartphones. And so I see momentum, I see an ecosystem.

When I look at what Apple’s done in China, I think it’s hard for anybody to evaluate this and say it’s not impressive. The company’s gone from a few hundred million in revenue one year to $3 billion plus the next, to $13 billion plus the next, to $23 billion plus last year, and so the last two years were adding over $10 billion a year. And I also see in markets where we haven’t done as well, and I view that as opportunity, not the glass half-empty.

And so when I string together all of these things—from the momentum, to the market that we’re in, to the ecosystem, to the incredible opportunities we have in emerging markets—and I consider that today, this may surprise you, but iPhone is really only available to about 50 percent of the subscribers in the world.

And so there’s tons of opportunity to continue expanding that as well. Frankly speaking, I see a wide open field and that’s the way I look at it. I don’t think about that word “limit.”

On a more affordable iPhone

This is a popular question. It’s important to understand: To understand Apple, our North Star is great products. When everyone comes to work every day, and leaves work, they’re thinking about that, front and center. We wouldn’t do anything that we consider not a great product, it’s just not in us to do it, it’s not why we’re on this Earth. There are other companies that do that; that’s just not who we are.

That said, if you look at what we’ve done to try to appeal to people who are more price-sensitive, with iPhone specifically, we lowered the price of iPhone 4, we lowered the price of iPhone 4S, we did that in September of last year, and in the December quarter, the most recent that we reported, we didn’t have enough supply of iPhone 4 after we cut the price. It surprised us as to the level of demand that we had for it, and so we are making moves—have made moves—to make things more affordable.

Also, if you look back at Apple’s history, what you would see is, you take something like an iPod. When we came out with iPod, it was $399. Where’s iPod today? Today you can go out and buy an iPod shuffle for $49. And so 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 at a cost that enabled us to sell it at a very low price of $49 and appeal to a lot more people.

The same thing, but in a different concept in some ways, is for years, people said “Why don’t you have a Mac that’s less than $500?” or less than $1000 or whatever. Many, many people asked that. And frankly, we worked on this. We concluded we couldn’t do a great product, and so we didn’t. But what did we do? We invented iPad. And now all of a sudden we have an incredible experience, and it starts at $329.

And so sometimes, you can take the issue, if you will, or the way that you might look at it as an issue, and you can solve it in different ways. But the North Star for us is always great product, not “How do we hit a price point?”. And that has served us well. I think it will continue to serve us well. I think on this one we really have a track record to show it.

On smartphones and bigger screens

I don’t want to say what we will do or won’t do, and so don’t interpret anything I say along those lines. Let me go back and compare it to the PC industry for a minute. The PC industry over the years, the way that companies competed were two things: specs and price. And so people would want to say, “I’ve got the largest drive,” or, “I’ve got the fastest processor,” or in the camera business people began to say, “I’ve got the most megapixels.”

The truth is, customers want a great experience, and they want quality. They want that “Aha!” moment each time that they use the product. And that’s rarely a function of any of those things. These are things that technology companies invent because they can’t have a great experience, and so they talk about the spec of something.

Do you know the speed of an AX processor [Apple’s chip processor for the iPhone and iPad]? You probably don’t. Does it matter? I mean, does it really matter at the end of the day? You want a fabulous experience when you open it, and when you use the product.

If you look at displays—if you kind of contrast this to displays—some people are focused on size. There’s a few other things about the display that are important. Some people use displays—like OLED displays, the color saturation is awful. If you ever buy anything online, and you want to really know what the color is, as many people do, you should really think twice before you depend on the color of the OLED display.

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