Transcripts For KQED Charlie Rose 20160301

Culture. And the culture here is this very unique blend of idealism that anything is possible that we can be bold and humanity. Everybodys fear wants to change the world and we do that through our product. Rose politics and apple when we continue. Rose funding for charlie rose has been provided by the following and by bloomberg, a provider of multimedia news and Information Services worldwide. Captioning sponsored by Rose Communications from our studios in new york city, this is charlie rose. Rose the 2016 president ial election could be remembered as one of the most bizarre and unpredictable in american history. A new series on show time seeks to capture its jaw dropping head scratching moment in real time. It is called the circus inside the greatest political show on earth. Show time president david nivens says it aims to expose not just the nitty gritty about Campaign Work but al Society People behind the candidates. Joining me are the series creators and host Mark Halperin and John Heilemann of Bloomberg Politics and also with all due respect veteran political strategist mark mckinnon. Im pleased to have them at this table on the tuesday eve and then well talk about the circus. Tell me about, john, super tuesday going on monday night. It looks like two front runners in the republican and democratic party. That would be donald j. Trump, once a farfetched and conceivable front rupter and at one point the inevitable front runner. They are both front runners. They could have big nights tomorrow and you could wake up on march nd, wednesday morning and have them be in a prohibitive place. Which would confirm on the democratic side we have evolution and on the republican we have a revolution. Rose interesting comment. So you think it could be really over tomorrow . I mean, it wont be mathematically over but the prospect is the front runners will win all or almost all the states. Rose trump will win all but texas. Im not sure hes going to win texas. He might. Will he win oklahoma. I dont think hes going to rose you think hes going to win them all. He could. I think he will likely win one or two. His delegate lead thereby big but the momentum lead will be big and the logic of a trump steam roll through the next set of contests will be pretty high. On the democratic side, i think senator sanders will have a tough time arguing theres a path to be nominated. Im not asking anybody, i think hes done an incredible job. Rose because he has enough. You can go to other states but its tough arguing theres a path to nomination. In the democratic rule ones you get a lead, its hard to catch up. You need to win the remaining votes. Rose shell shift togenera. She already has. What people dont know you have the best of the democratic racesal all throughout the contests are proportion sult delegates. There is no winner takes all states. You cant win california and come back. You cant win a huge delegate cash which makes it very hard as mark said. If youre in the democratic race. Once youve got an appreciable lead its hard to close that lead. You got to start winning states by huge mawrgz. This is what happened in 2008 with problem. On the republican side there are winners of all states we will face going down the line which is why even though trump may be the overwhelming victor tomorrow night, youre going to see marco rubio will want to stick around florida which is winner take all. Youll see john kasich stick around. Rose is it a broker convention. Getting it oneonone. All three of them cruz, kasich and rubio believe if it was contests with them against trump, carson got out as well they would win some of those contests. Nvention trying to take it away from trump you go to a convention that no one had 40 or more of the delegates and therefore theres an alter to be made that perhaps the convention should decide because no one can go to the convention and say i have a majority. Rose the assumption all those votes against trump would not go to him in part. They would. But you could imagine a world in some states where trump got his share of the votes from the people who left, kasich or rubio or cruz in the right states could beat him in certain its such a model election. On both sides on one side you have a potential sort of email inquiry where does that go and on the republican side maybe trumps taxes or whatever. Its an argument for somebody to stick in just in case something crazy happens. Another factor which is although theres been unhappiness about trump, the National Review and others over the last few weeks and months have said this guy shouldnt be our nominee, it is this week, even the debates is superbn tuesday reached a boiling point of people saying, the Republican Party will be destroyed if this person is nominated. Rose what caused them to finally say that. The fact he will become the nominee. Rose but the kkk i think look theres, it was going to come. This phone was going to come in the Republican Party where people looked up and said that guy is going to be our nominee . Really. Thats a moment. And i think that moment came. Weve said a million times donald trump has said things that would have destroyed any other candidate. He said them for months. But it is the case that the kkk is different in american life. It is different. Just the words kkk. Just like the american nazi party. Those are like, there are a lot of things you can do and say but you cant get yourself in a situation where youre not seen four square against those things. There are a lot of republicans after he refused initially in that Television Interview to say not just to repudiating, hes basically saying if you want me to repudiate it which is not the way you repudiate Something Like this. Rose explain Chris Christie to me. He had two options looking at a political future. One was under president elect rubio with limited options or president elect trump where he had something. Very simple. Rose hes ambitious. He has a personal relationship with trump and i think hes comfortable that trump could win a general luckion. I think a trump christie ticket will be for repliedable. Two North Eastern aggressive guys that would take it to the clintons in a big way. I think also you look at christys view of himself. He cant be king he wants to be king maker. In this case rose he already made himself. The king was there and christie i think looked and said this guys going to be the nominee. A scenario where its not farfetched, hes my friend. Rose you said and correct me if im wrong hes the best politician since billdo you bel. Hes as good as anybody. George w. Bush is pretty too. And barack obama is not bad. Are you talking about instincts. Not really retail the thing about trump is hes doing this with almost no teeth. Hes got a small staff of people who are close to him and he eres a little bit but theres an extraordinary understanding of an instinct about how to use television to advance his agenda. They are like you could argue this its horrifying or impressive. Hes extraordinarily, the things mark talked about hes extraordinary bully to harness sense of resentment rose his own party. He taps into it in a really deep visceral profound way. Its powerful and you couldnt teach that to someone. And the other thing is that hes, hes got an extraordinary instinct for the attack. Understanding of the psychological vulnerabilities of the people hes running against. Distilling it down to a simple thing in an almost like fifth grade language being able to attack people. How do you explain the david duke thing. I think he was careless about it. I dont think it was a tactical thing about people in the south. I think he was careless about how he answered because he often will try to just answer what he wants to answer. In this case, he answered what he wanted to answer which is as john said before when youre talking about the plan or nazis you got to answer the question directly and with moral authority rather than glibly. Rose thank you, congratulations. Thanks for having us. Rose we begin this evening with a seriesr,ijt conversations about apple, the company. It is one of Global Corporations in the world. The legendary steve jobs built it into one of most Successful Technology companies of all time. Apple products like the imac, ipod, iphone, ipad and iair for the design and function, the meetings of the humanities and technology. After the death of steve jobs in 2011, are his handpicked successor and number two tim cook took over as ceo. Since then he has taken over the leadership and steered the company to unparallel profits and dominant in global markets. Today tim cook and apple are locked in a very visible and controversial fight with the u. S. Government. President obama and the f. B. I. Over the sand bernardino tragedy. Fbi has asked apple to hack the iphone which would open a back door to the iphone and establish a damaging precedent. The fbi says it is a question f national security. Apple is ordered to comply under the fed judiciary. It may go to the supreme court. Tim cook and the director of the fbi realize the stakes are high for all the values argued by both sides. Theyre calling for a National Conversation and national action. Having to stake stands against their government that are not very comfortable for them but they consider very necessary. In september 2015 i and my colleague went tocm apple headquarters to interview tim cook and his closest colleagues to understand as best we could the company known for secrecy that now finds itself in a public fight. This was five months before the present crises. But understanding who they are perhaps illustrates how they got to where they are and how they see themselves in the world they inhabit it. To understand apple you need to know three people steve jobs, tim cook and johnny ives. We begin with tim cook. This interview in the cafeteria of apple took place in september of 2015. Everybody wants to know the answer to this question. What is it about apple . Why apple . Its the people, charlie. We do have a little bit of money and weve got some ip and so forth and all this stuff is great. But its the people that make apple. Its the people and the culture. And the culture here is this very unique blend of idealism that anything is possible that we can be bold and deep humanity. Everybody here wants to change the world and we do that through creating the great parts of the world and we try to give people tool that make them do things or allow them to do things that they could not always do. Thats sort of the thread that types us all together. And its the best place in the world to work. Rose why . Because the feeling. The feeling you get when youre making a difference. Its better than any paycheck, its better than anything you could ever get out of a job. This feeling that youre truly making a difference in the world. And i never felt it before entering the apple door. i and after you get that feeling, you become incredibly selfish. You never want to give it out because you know how special it is and ive never really empowered it in other places. And so i hold it dearly. Rose different mind set or different attitude about products or different ethos about perfection. Its a bar of excellence that nearly good enough. It has to be great as steve used to say, insanely great. Its that it not only has to be great but it has to make a difference with people. It has to enrich somebodys life. So you get the combination of these feelings coming together. And i dont know, its just, you feel like a kid again. And it feels like theres nothing impossible that you can do anything. Rose you believe you could do things other companies cant do. You do. We all do. And we have fortunately. And you do it to benefit other people. And so its not a thing about, you know, revenues and profits. Those are outcomes and results of doing things great. Theyre not the purpose. Theyre not the north star. And so i will, i dont think this thing is replicatable so we hold it very dear. Rose is the dna of steve jobs deeply into everything you just said. It is, it is. This is steves company. This is still steves company. It was born that way, its still that way. And so his spirit i think will always be theku dna of this company. That doesnt mean that it doesnt change and morph with the times and so forth. But the underpinnings of excellence of creating great products. This will always be the foundation of the company. Rose because you have control over hardware and software. Thats a key element. Thats why we can innovate like anyone else because we have control over Hardware Software and services and theres real magic that happens when these things come together. Very few, really im not sure any other company has that. Most people subscribe to the specializing in one of those. We found that to produce a Great Customer experience, you have to do all three. You have to do all three to make them seamless. And thats what we do. Rose someone said samsung has the hardware not the software. Google has the software and not the hardware. Yes. I think thats a fair thing. Both companies have tried to do the other and foundao its not o easy. And fortunately we have decades of doing both. And really get the power of those. We also know that you can only do it really great on a few things. And so the other part of our model is to focus. And you know, you could put every product weve got here around us right now and despite our revenues being over 200 billion. And i think thats, we would not be able to be really great if we had to do many different products. We couldnt do that and we know we couldnt do it and dont even try. Rose if youre so good and theres so much money in the world, why cant people come and steal your best. People who try to copy a product they try to copy the culture that produces the product. Its not simple. You cant tell people that to all of a sudden magically want to change the world. You cant tell people how to feel. You cant instill passion. These things develop out of the culture that sort of self sustaining in some ways. And were very fortunate to have that. Rose but youre making product. How is that changing the world . Making phones and ipads. Like what this phone. This phone created an App Ecosystem that has one andahalf million apps in it and you can literally do everything with these apps. They can improve your health, ey can help a kid learn whog. H, hasmu autism. They can help you write music. They can help you create art. They do things that are, that give you the tools to do things that you would not otherwise be able to do. Just think about your day and what youve been able to do because that ecosystem exists because that product exists. I dont know about you but i look at my life and i cant imagine it without these things. Rose see, i dont understand why somebody cant duplicate this. Yes, you have good people, yes, you have great people. Rose great people. And yes you have a passion for perfection. But people who believe in that are not here in coopertino. It awe sounds me that apple is unchanged. They get in the way of themselves so they begin to create organizations that have their own objectives and then they begin to create conflict between these organizations and they fight each other. They begin to become focused on each other instead of on customers and competition. We dont really do that. We have very few objectives for the company. We have very few product. We all are in a great direction in the direction of great products, how to take the company around. So it becomes, we do complex things. But we have a very short list. And it makes it work with us. Rose you see ideas that maybe you could turn into good products but you say no. Yes. And saying no is always the hardest thing is because you go through your life and every day, all day long, all of us can say well oh, this is so crazy wed like to do work on this, wed like to work on that. We can come up with an infinite list literally of thingsps to wk on but we know we cant do them all great. So we short the list a lot. Rose how do you decide which ones you do. Theres no formula. Theres no formula. Its arguing, its debating, its figuring out what things that we can do better than other people. If there are other people that can do them as good, were not interested in going into that. We want to be somewhere where we can do something thats truly great and truly differentiated. Rose nobody in the world can make an apple watch the way apple can make an apple watch. I think you can look at the market and see thats true. Rose if they had they would have stepped forward. Of course. Theyve already been on the market but it wasnt, there were smart watches on the market just like there were smart phones on the market before iphones and tablets on the market before ipad. Arguably we had the first modern one of each of those. Rose let me go back to steve for a second. How does he contribute today. What does the legacy of steve jobs mean in the day to day activities . Of apple . That was talked about originally from steve. The idea of focusing on a few things. The idea that excellence is at an incredibly high bar. The focus on building great products. The idea we should have a functionalbased organization and not a Division Like most corporations do. All of these things were things that link back. Rose hes not the only perfectionist in the world. No. Rose he never was. No. Rose i know a lot of people insane about perfection. Are you saying the only one insane about perfection is products. I think he was, i dont know i would say only. There are characteristics of steve. I think of people as packages. Packages of all kind of characteristics. I think steve had such a unique set of characteristics rolled into one person. Ive never met anyone on the face of the earth like him before. Rose never met anyone on the face of the earth like him, not one person. Not one. Rose who had . Who had this incredible and canny ability to see around the corner. Who had this relentless driving force for perfection. Who had this ability to focus things to their simplest. If i learned anything at my tenure at apple is that simple is the hardest. Its easy to come up with a complex solution to something. Its easy to design a complex product. Its so hard to get it really simple. To peel things back to their core. He had a way of doing that that he infused in all of us to do it. Rose how would he expect it. It wasnt always, you know, it wasnt a teacherstudent kind of thing although maybe i look back on it and i would describe it like that. Its how he conducted himself every day. From the clothes he wore, he didnt want to make a decision about what to wear so he wore the same thing. Thats about focus. Its about deciding what things youre going to focus and he knew that that was one item that he could peel away from himself to take away the clutter. Well that same thing, i saw him do all day every day. He went to very few conferences. Rose how do you explain steve jobs. I dont know if you can explain it. Its like a thousand year flood or something. These things. You know hes the original of a species. On rose one of a kind. One of a kind. Sort of like haleys comment although that came along more often than steve jobs. Rose he talked to you about living. He did. Rose did he teach you about dying. He did. Yeah, he did. It was very, that was a very difficult period for him and for evybody around him. But there were many things he taught me and how he did that. I mean, there the point where i think i said this once or twice before, but i went over to his house after work and one day in particular he was in such bad shape. And he was waiting to move up the waiting list for a liver, for a cadaver liver. And it didnt seem to me he was going to live long enough to get to the top of the list. And so i went out and had mine checked and he told me he had a rare blood type and i found out i had one as well. And i assumed they nudged and i offered him mine and he was like no. There was just no way that was going to, he was going to accept it. He wouldnt even discuss it. And i think this says a lot about him. And you know, really makes me wonder, i hope, that if im in the similar situation i can make this thing turn. I think theres a great lesson there. Rose buta he knew he was . Did he know. Its hard to answer that is the honest question. He and i in some way are polar opposite. But we shared a lot as well. We shared a really focus on excellence. We both shared a deep love for apple. And there were lots of things. We worked together very closely. I clearly had Great Respect for him and i think he felt the same way toward me. Rose it was the important thing he had other than family was the well being of this thing he built with his life. When he told me, i felt like almost indescribable feeling. Its like somebody entrusted in you a huge part of themselves. And thats the way i felt that day. I remember asking him, are you sure you want to do this. This was six weeks or so before he passed away. And at that point in time, that was not, i didnt see that occurring. And i dont think he did either at that point. I dont think he did. Not8rcm at least in that time f. And he had decided he would not be ceo any longer and that he was going to be chairman. And he called me and said come over, i want to talk to you about something. It was a weekend or something. So when do you want me and he said now. And so i drove over to his home and he said tim, apples never had an orderly transition of ceo. Never in the company. And i want that to occur. And i want you to be the ceo. So he and i hadthis very general times before that, obviously. But not like im ready to give you the torque so to speak, the drive. I wasnt expecting this at all. Because i had seen him Getting Better and better. And so it was a bitafor me. Rose he also told you about what he would do. He did. He mentioned that he had watched what happened to disney when walt passed away and he described the company as being paralyzed of sitting in meetings and trying to guess at what walt would do and whatever situation it was. And he did not want that to happen with apple. And so he actually covered this twice then and once subsequently that he did not want this to occur with apple to never think about it. To just do what was right. And ive always tried to do that. Rose what was it that you two did together . What was the relationship, the business relationship . You know, with stheaf steve i wpbt call it a business relationship, it was a friendship. With apple and i think this is more true with the company that business and personal blend together. And so there was a, you know, a very close bond there. And can i describe, im not sure i can describe it, charlie. Think about somebody you see every day and you do for multiple years. And you sort of feedro off each other a bit. That was, thats the way i felt about steve. And over times he entrusted me in doing more things and i always appreciated that. And i always learned from him. Every day i learned something. And it was a privilege of a lifetime. Rose you cant be more different. You come one of the beauties in steve is he didnt want everybody to be alike. He didnt see a need for everyone to look alike, talk alike, speak alike, whatever. He didnt put everybody through a car wash and get a ticket on the other side. I think you can tell in his selection thats not how he thought. Rose he wanted diversity. He did. Rose experience. Diversity of experience, diversity of life experience, diversity, people seeing things through different lens. And i think he knew, i know he knew the that the most important thing about apple is getting everyone to Work Together well. Getting the collaboration of the high level. Because were fortunate to have such fantastic people. If you can get the collaboration, you can get some incredible products out. Rose and then after that, i mean tell me growing up in the segregation of the south shaped you. Because you told the story of seeing a cross burning. And you saw on your bicycle someone you was seared in your brain and it changed your life forever. There were so many things, charlie, with growing up where, this was the period of time, keep in mind i grew up in the 60s and the 70s. And through this period of time, the u. S. In general was struggling with segregation, desegregation was struggling with racial tension and actually the countrys still struggling about that today, although in a different manner than back in the 60s and 70s. And so but the big for me was, what i saw was that people werent able to do their best. That there was some sort of built in head wind for certain people. Maybe it was because they were african american. Maybe it was because they were gay. Maybe it was because they had, they believed in a religion that was different than the majority religion. Whatever it was. Maybe it was because they werefj female. Maybe whatever the situation was, but i saw so many people that had this head wind. My own community was very great community. But i mean looking at the broader community. You saw this and you saw it, it sort of hit you in the face as you traveled about. George wallace was the governor of alabama during part of this. And you know the history there. So you get reminded about how much better life could be for everyone if there was no discrimination. Wouldnt it be incredible if there was none and its free. This is something where you have to sit oh my god weve got a trillion dollar deficit or whatever the situation is. Lets decide about entitlements. Its nothing to do with all of this. Its just treating people with basic respect and human dignity. And from an early age, my heroes in life were dr. King and robert kennedy. And they still are. Because you look at these guys and you focus on what they stood for and their vision of the world and not if we could achieve it, when we achieve it, you think about how great it would truly be. Even if you think about it in a cold way of economics, it will be so great. Its not the reason to do it in my view the reason to do it is its just and right. Rose they remind you. They remind me of whats most important. I showed you the photo of Jackie Robinson and you think7s about what he went through in life and how great he was. And how he was sort of a pioneer. Rose how he knew he had to hold his own two thirds. Yes, for the greater good. Rose to win the game. Exactly. Rose the larger game. Exactly. Exactly. And so i mean these folks really inspire me. Rose you also say, human rights is a big issue for you. Yes. Rose you also say that coming out, announcing, even though your friends knew that you were gay, ceo of a fortune 500 Company Might come out, you said it was gods greatest gift to you. Yes. For me, when i look back and i think why did i have the insight that discrimination was such a massive issue and what would happen in the absence of it about how great things can be. Its fundamentally because of this. Im not saying i know what its like to be african american, i cant say that. But when youre in a minority group, it gives you a senses of empathy of what its like to be in the minority. And you begin to look at things from different point of views. And i think, im not saying no one can do that without being a minority. There are some people incredibly good at looking at it but for me i think it was a gift for me. Rose explain this to me too. So, the founder of the proudlegacy of a great d great people. I met a number of them who were there. Yes. Theyre incredible. Rose Incredible Group of people who come to this extraordinary meeting on a monday morning, every monday morning, they all show up. They want to be there and theyre required to be there to a degree if they want to be part of the management. Yes, sure. Rose you didnt show up for a couple meetings, you would begin to wonder wouldnt you. Yes, they want to show up. They really want to because they want to participate. Rose they want to participate because they might miss something. Absolutely. Things move fast so you dont want to be absent. Rose those are people who may apple. Those are people who made steve jobs. Yes. Rose not one of people love apple deeply. Rose they have plenty of money. Yes but people arent looking for money. Yes, they get paid. Rose resume. Theyve got a beautiful resume but they know theres a difference between really loving the work and doing your best work. And they feel like they can do that here and change the world. And you look at these other thing, yes you can make more money somewhere else maybe and all this kind of stuff but lifes more than that. Lifes so much more than that. And i think they all know that. Rose do you worry at some point that may change not because theyre tired of apple or anythingsay. Yes, people retire after a while. Were not immune from retirement. But fortunately, if you look at their organizations they are the people of the rose you were already part of who they were. I was a known. I was known and i think they knew my strengths, they knew my weaknesses, they knew i loved apple deeply. I think apple is a company that you want someone fitting in the ceo chair that understands deeply the company and loves it. Our requirements so to speak, the requirement to do what we do is to love this company. People would not do well here if they dont love the company. I know that sounds really soft and all valid and some people let them think who cares about that. But we need rose you care about it. I care about it deeply. And to have the level of care that we want in our product, it take that feeling. If you view this as a job or youre working for a paycheck, if thats your purpose, apple is not the company to be at. Because it requires a higher level of energy and passion than you get out of working for a paycheck. Rose they got to find people who feel the same thing at google or amazon or facebook. I suspect at those companies you might. I dont know. But i think, i dont think you would find people that have done it for as long and as consistently as apple. Rose do you feel like you have anything to prove. Because as you know, people say its very hard to follow legend. Its very hard toessentially a. I never viewed i was competing with steve. I loved steve. Steves not my competition. My competition is working out in companies that are competing against apple. And so i never viewed that it was like that. I know that it was a common media view of you cant follow somebody thats successful and do well but from my pointed of view i look at this and said he selected me. I want to do every single thing i can do and use every ounce of energy ive got to do as well as i can because i want to do it because he selected me to do it. And i deeply love this company. And ive never felt that way before entering the those doors. Rose let me talk about whats here. Theres this recipe for innovation. It is the notion youre creating products. Youre creating products people dont know they need until they need them. Yes. Rose because they love them. Yes. I think if you go out for focus groups, focus groups generally will find evolutionary kind of things. Theyll say i want something to be a bit faster or whatever. Youre not going to find things that are around the corner from a focus group. And so you can, what we do is we make things that we want and we think were reasonable proxies for a greater number of people. So if we can design something that passes our talent and our expectations then we feel like it could be pretty successful in the market. Rose you measure that because somewhere at some point one of you had thought wouldnt it be nice to and because you were here you knowmeet certain. Yes. Rose itm÷only work well buo look well and feel well and be unique and somehow be of a quality that people feel like they have to have it. Yes. Rose and whats in it. It has to be better. Not just different but better. And if it doesnt pass that test, we dont do it. Rose apple has improved price created by other companies with music and smart phones rather than coming up with some brand new idea. It takes something somebodys tried and makes it as close to perfection as you can. Sometimes people have tried it, absolutely. And i think you would find that in the phone case, smart phones on the market. You find it with mp3s. Before ipod. There were tablets on the market well before ipad. I would point out that the first modern one were those items. The ipad for tablets and iphones for smart phones and ipod and once that benchmark was set, the industry began to run toward that new objective. Rose so you set a new paradigm for it. You do. And it takes as it turns out, it takes longer to do that than it does to be first. We dont have an objective of being first. If we are, its great. But if were not were not losing any sleep because we want to be the best. Not the first and not produce the most. Our overriding objective is to be the best. Rose and you are prepared to wait until you feel like youre there. Absolutely. Rose a youre not going to put a time line. Were not going to have a time line on it. Rose you have to have this buy. No. Were opposed to doing that because you begin to drive decisions that are not great for great products. Rose who decides when to pull the trigger . You do . At the end of the day its my responsibility, yes. Do i depend on some great people, of course i do. Rose but at the end of the day the definition of the ceos role is you decide when we are make a major move. Yes. Although the most important thing i do is decide people. Theyre the most people, yes, because theyre making the thousand things that, thousand decisions that dont necessarily come to the top. Rose how do you know those people . First of all you dont bat a thousand and you have to admit to yourself youre not going to bat a thousand because when you do make a bad selection you want to change. Fortunately after youve been doing it for a while, you develop a feel for what kind of person does their best work here. And for apple, that means a high level curiosity. The best people here are intellectually very curious. Theyre always asking why. Theyre wicked smart. Theyre collaborators. They are willing to sort of be in the background. They dont really care about their own brand so to speak. They care much more about apple. Rose and youre prepared to go outside to find the best. We are, sure. Rose o to get dr. Dre or jimmy. Exact low. Rose you werent that interested in headphones but you were more interested in talent which proves your point. Absolutely. Rose people make the difference. Its people. Apple is about people. Rose and to get people, you will steal them. I dont think of it as stealing. Rose did steve steal you from compact. He wanted you. Compact didnt own me. He convinced me to join. Rose okay. It is said that youre hiring some of the smartest people that understand cars now. Ive read that. Rose but that would be, if you are doing that, and theres every reason that you are, it would fit the pattern at apple. Youre planning to go there, get the best people to take you there. And so they read that you are hiring these people, you have to be able to go there. You know, what we do charlie, is we will look and explore a number of them. And then a very small fraction of those we advance. And so im not going to comment about cars, our interest there but i would just say that if you just monitor where we hire, the skills we hire, does not necessarily connected the dots because theres such a great, theres curiousity creates an exploration here. We have to go far enough to get down the road to see what the end looks like. Sometimes that takes a lot. I can see youre not buying it. Rose not buying it at all. But it is true. This is true. a rose let me talk about products now and well get to cars in a moment. Smart phone. Iphone. I watched recently the video steve and that famous presentation. It looked like he discovered the secret to life. He loved technology, he loved design, he loved performance, he loved whatever it was that made him love doing it. All the things that had galvanized his life. He felt he was totallyiu in a h ell. Right. Were all incredibly excited. The years in the making. Rose how many. Doubledigit years but its sort of the project itself took three to four years by the time it came to market. Rose i want to nail this down at apple. The Underlying Technology took years. Yes. Rose that doesnt come over night. No. Rose and until you can do the outside and find an operating system. Yes. Rose you found it at toshiba. Youre thinking about the hard drive, absolutely. The 1. 8 inch drive. Rose right. But that was the hard drive. It is a notion of waiting for somebody to have a technology that you can use that would deliver whats in your brain about what might be possible. Yes. You have to have the enabler. And when you have the idea, the enablers may not be there yet. You may be able to create them. Other people may be working on them. And when its not until all those things line up that you can formulate the really greatest qualities. Rose what has to line up. The underlying technologies. And your vision of what the product can do. And usually for us, the ecosystem is also in florida. Because you have to recognize that, i mean Something Like an iphone or an ipad, the ecosystem there is incredibly important for the customer experience. The platform is very important because you want developers, you want to unleash millionspeople e platform. And so if you think about the iphone it wasnt the first iphone that did that, it was the second iphone. Rose you went to market and made it better later. Correct, correct. Rose why didnt you wait for it to be better before you went to market. Theres always a decision of do you wait until everything you can think of is there, or do you go out with a really great product. There will always be Something Better if you wait. And its always a difficult decision to decide when you let the train leave the station. But if you always wait until you have everything, you will never ship anything. Rose perfect is making it good. Absolutely. Rose thats called judgment. Thats called judgment. And its gut and intuition and theres no formula for it. Rose it is said that the iphone 6 lost the iphone controls only 20 of the market it is said. It brings in 90 of the profits. I would say thats a very good return. I think its the return on innovation. Rose do you agree with the numbers. I dont know if those numbers are exactly right or not but clearly we have a higher percentage of profits than we do of units. But our focus is always on making the best. And if you make the best, you will generally have a higher percentage of profits than you do with thats true with the mcintosh, thats true with the smart phone. Rose how important is it to apple. Its very important. Rose its more than that. Its very important. Bthan that. Its more than 60 of your revenue. Yes. Rose thats more than very important. Its incredibly important. Rose exactly, more. I mean it is the engine driving the company. It is the engine driving the company. Well those other engine are pretty good. Rose 60 of your revenue. Yes, its hugely important. Rose you know what they say, watch out for saturation. What is that . As i look at it, theres, you know, over a billion smart phones sold a year. Theres about two billion mobile phones sold a year. And so theres still a lot more between the billion and the two billion. Also, smart, the Underlying Technology that are possible in smart phones, things will get better and better. And so i dont think the smart phone is near the end of its life cycle. Ginning but i think it is the end, i do. Rose tomorrow night part two of our conversation with tim cook about what makes apple apple. Captioning sponsored by Rose Communications captioned by Media Access Group at wgbh access. Wgbh. Org this is nightly Business Report with Tyler Mathisen and sue herera. An or cal of optimism. Warren buffet says dont bet against america. He shares his outlook for stocks and the committee. General electric ceo didnt mince words writing a no holds barred letter to shareholders. Leaping forward. Why leap day is great time to get a hold on your financial. All that for leap day, february 29th. Legal ruling in favor of apple in one of its many cases against the government. Well have more on that in maine. We begin with warren