tv The David Rubenstein Show Peer to Peer Conversations Bloomberg March 3, 2019 10:00am-10:30am EST
david: you get a call from a call from steve jobs. tim: there was a sparkle in his eyes that i'd never seen in a ceo before. david: did your friends tell you this was not a good idea? tim: they thought i was nuts. david: warren buffett still uses that old flip phone. tim: i told him i will personally come to omaha to do tech support for him. david: you exposed your own personal life a bit. tim: i thought, i am making the wrong call. david: why is it called the apple watch and not the iwatch? tim: i kind of like the apple watch. david: well, you are the ceo, so -- [laughter] >> would you fix your tie, please? david: well, people wouldn't recognize me if my tie was fixed, but ok. just leave it this way? alright. ♪
david: i don't consider myself a journalist. and nobody else would consider myself a journalist. i began to take on the life of being an interviewer, even though i have a day job of running a private equity firm. how do you define leadership? what is it that makes somebody tick? [applause] david: that was quite a reception you got here. tim: i thought it was you. david: no, it is for you. you have now been the ceo of apple since about july 2011. the earnings are up about 80%. so have you ever thought you can't do better than this and maybe you should just say, well, i have done a great job, and now
i am going to do something else with my life? tim: we view the stock price, and revenues, and profits as a result of doing things right on the innovation side, on the creativity side, focusing on the right products, treating customers like they're jewels, and focusing on the user experience. i didn't even know the numbers that you just quoted. this is not something that is even in my orbit, to be honest with you. david: well, so when you announce your quarterly earnings, analysts always say, well, they didn't sell as much of this product as we thought they would. so does that bother you? tim: it did at one time. it doesn't anymore. the -- we run apple for the long term. and so, it's always struck me as bizarre that there's a fixation on how many units are sold in a 90-day period.
because we're making decisions that are multi-year kind of, kind of decisions. and so we try to be very clear that we do not run the company for people that want to make a quick buck. we run the company for the long-term. david: well, one of the shareholders who recently surfaced as having bought 75 million additional shares is warren buffett. are you pleased to have him as your shareholder? tim: i'm overjoyed. i'm thrilled. [laughter] tim: because warren is focused on the long-term. and, and so there is -- we're in sync. it is the way we run the company, it is the way he invests. and yeah, so i could not be happier. david: have you thought about this? warren still uses that old flip phone. tim: i know. [laughter] david: he has no smartphone. have you thought how much more your stock could go up if he actually used the product? [laughter] tim: i am working on him. and i told him i will personally come out to omaha to do tech support for him. [applause] david: so, you're now in a
building that was designed and inspired initially by steve jobs. apple park. tim: apple park. david: and you've moved in recently. tim: steve had the vision that the workplace should facilitate people working together, having these common areas that people could work together, and run into each other without planning on doing it, and that the level of ideas, creativity, and innovation that would come out of that would be phenomenal, and we're seeing that. david: you're convinced that standing up working is better than sitting down? tim: we've given all of our employees, 100%, standing desks. if you can stand for a while, and then sit and so on and so forth, this is much better for us. [laughter] david: yeah, we could stand up for a little while. [applause] david: so, let me ask you about how you came to this position. so you grew up in alabama. tim: a very, very small rural town between pensacola and
mobile on the gulf coast. david: ok, and you grew up -- were you a star athlete, were you a star scholar, tech nerd? what were you when you were in high school? tim: i would not say i was a star anything. i worked hard at school. i had some reasonably good grades. the benefit i got in my childhood was being in a family that was a loving family and a public school system that was good, and you know, that's a huge benefit, and honestly, a benefit that many, many kids don't have these days. david: you went to auburn. and how did you do there? tim: i did pretty good. [laughter] tim: i did pretty good. i really got into engineering in a big way, industrial engineering. david: so then you went to work for ibm? tim: i did, yes. i started as like a production engineer, out designing manufacturing lines.
and at that time, robotics were beginning to take off, and so we were, we were focused on automation. i wouldn't say we successfully focused on it, but i learned a lot from going through that as well. david: so you were there for about 12 years, and then you joined another company called compaq. tim: yes, i did. david: so you were at compaq, which at the time, i think, was one of the biggest manufacturers of personal computers. tim: they were number one at the time. david: so you are there for about six months and you get a call from steve jobs or somebody working for him saying, can you come and join apple? apple was modest compared to compaq. why did you take the interview? and why did you join apple? tim: yes, it's a good question. steve had come back to the company and was essentially replacing the executive team that was there at the time. i thought, you know, this is an opportunity to talk to the guy that started the whole industry. and steve met me on saturday.
and it was like just minutes into talking with him, "i want to do it," which i was totally shocked myself. but there was a sparkle in his eye that i'd never seen in a ceo before. and there was -- he, he was sort of turning left when everyone else was turning right. it was almost in everything he talked about he was doing something extraordinarily different than conventional wisdom. many people were abandoning the consumer market because they were just -- it was a bloodbath. steve was doing the exact opposite. he was doubling down on the consumer at the time everybody else -- the conventional wisdom said go put your money in storage and servers. and i thought it was brilliant. so talking with him, and the type of questions he asked were also different.
you know, i did, literally before i left, i thought, i hope he offers me a job. i really want to do this. david: did your friends tell you this was not a good idea? tim: they thought i was nuts. [laughter] tim: they thought i was nuts. again, conventional wisdom was you're working for the top personal computer maker in the world. why would you ever leave? you have got a great career ahead. it was -- it wasn't a decision you could kind of sit down and do the engineering kind of analysis, saying here are the pluses and here are the minuses, because that analysis would always say stay put. it was this sort of voice in your head that was saying, go west, young man. go west. david: despite the fact that there was no state income tax in texas and there is in california, you still said you were going to go west. in hindsight, this was the best professional decision of your life, i assume? tim: maybe the best decision of
my life. i'm not sure you have to put professional in that. david: steve's health was such that he could not continue to be the ceo. tim: i thought, honestly, my thought at that time was he was going to be chairman, and he would do that forever. and it -- you know, unfortunately, it didn't turn out that way. ♪
david: so you go there, and what is your job at apple? tim: running worldwide operations. and the company at that time was struggling in many different areas, and operations was no different. our economies of scale didn't lend itself to us doing manufacturing in different places like what existed in the company at that time, and so we found partners that were expert at manufacturing, and we maintained sort of the intellectual knowledge of how, the process, and obviously all of the design of the product. david: when you got there, and you're working for steve, was it better than you thought, worse than you thought, more challenging than you thought? tim: i found it to be liberating is the way i would describe it. because it -- you could kind of talk to steve about something very big, and if it resonated
with him, he would just say, ok. and you could do it. and so it was like, you know, like a total revelation for me that a company could run like this because i was used to these layers and bureaucracy and studies, you know, studying things, sort of the paralysis that companies can get into. apple was totally different than that. and i realized that if i couldn't get something done, i could just go to the nearest mirror and look at it, and that was the reason. david: steve's health was such that he could not continue to be the ceo. he told the board that. and you were announced as the ceo i think around july 2011. something around there. when you became the ceo, did you feel you had -- steve would say here is what i was interested in doing and you fulfill my goals, or did you feel you had your own view on what you should do?
and how did you balance the two? you're succeeding a legendary figure. tim: it's not so sequential as that. we have a really open company, and so most of us could finish the other person's sentences, even when we might disagree with them, and so it was not a matter of steve having this secret file or something. he was always sharing his ideas all the time, and so, so very different than that. and i thought, honestly, my, my thought at that time, and i know people have told me you're just not very smart, but my view at that time was he was going to be chairman, and he would do that forever. and that we would figure out the you know, sort of the relationship change there, and that's what i thought. and it's -- you know, unfortunately, it did not turn
out that well. [applause] steve jobs: today, apple is going to reinvent the phone. [applause] david: you have a product that is the most successful consumer product in the history of mankind, which is the iphone. tim: there was a sense that it was a profound product, it was a game changer. you go back and watch the keynote that steve announced it, you can feel his passion in it, and the way, the way he describes it, i sort of remember it like it was yesterday. david: so how many iphones have now been sold? tim: well over a billion. david: so there are 7.5 billion people on the face of the earth, so one in every seven people as one. tim: some people bought more than one along the way. [laughter] tim: i would hope so, anyway. david: you do have new ones coming out every so often. if i buy a new iphone, should i expect another one in two years? or?
tim: you should expect that apple's going to keep innovating and -- [laughter] tim: and you should jump on the train now though. [laughter] tim: because life is so short, david. [laughter] [applause] david: well, ok, i -- [applause] david: i have one here. i have my iphone here actually. and i do use it and love it. and one time, you and i were in china, and i could not work something and i asked you to help me, and you said, look, i don't normally do tech support. [laughter] david: but you were nice, and it did work. you came out with the apple watch not too long ago. why was it called the apple watch and not the iwatch? because you have iphone, ipod, ipad, why not iwatch? did you ever think of that? or? [laughter] [applause] tim: well -- david: i'm sure you must've thought of it. i'm sure it's not a novel idea. but i'm just curious. tim: it was something that we thought of at the time. david: so it was not a crazy question.
tim: no, it wasn't a crazy question at all. david: how come apple watch won out? tim: well, i kind of like apple watch, what you think? david: well, you are the ceo. [laughter] david: the ceo says something. so how are they doing? tim: they're doing fantastic. cellular is now on the watch. you don't have to travel with your iphone. you can just use your watch. one of the -- my best moments of a day is to go through my emails that are from users. and i get so many each week from people that found out they have a heart problem from their watch. it's alerting you if you've been sitting, and your heart has climbed to a level that does not make sense relative to the activity that you've been doing. david: suppose you don't want to know if you have a heart problem? [laughter] tim: well, we think most people do, because you can then go seek help. and seriously, david, so many people have written and said the watch alerted me to a problem. i took an action and went to the cardiologist. he told me that if i had not gone there, i wouldn't be alive.
david: when you say you go through your emails, nobody emails you directly? i assume you can't -- tim: sure they do. david: how can you respond to all those emails? tim: i can't, but it doesn't mean that i can't read a fair number of those myself. because i think it's important to sort of keep your hand on the pulse of the user. david: have you ever thought that maybe you could run for president of united states? because -- [applause] tim: i think, yeah, you know, the president is something, you would love to be president, but not ever run. and, and that should never happen in our country, so that kind of eliminates me. ♪
david: today, let's talk about some of the values that you have been espousing. one is privacy. tim: we see privacy as a fundamental human right. so to us, it's right up there with some of the other civil liberties that make americans what they are. it defines us as americans. we see that this is becoming a larger and larger issue for people. so we take a minimum amount of data from customers, only that
which we need to provide a great service, and then we work really hard to protect it with encryption and so forth. david: you've also talked about the importance of equality. tim: yeah. david: why is that important to you? tim: as i look at the world, many of the problems in the world come down to the lack of equality. it is the, it's the fact that it's the kid born in one zip code who does not have a good education because they happened to be born in that zip code. it is someone that is maybe in the lgbt community that is fired because of that. it's someone that has a different religion than the majority, and therefore they're ostracized in some way. very simply, i think if one day you could wave a wand, and everybody in the world would treat each other with dignity and respect, there would be
many, many problems that would go away with that. david: so you expose your own personal life a bit. you know, the privacy that you said other people should have, you kind of gave up some of your privacy. why did you do that? tim: i did it for a greater purpose. it became clear to me that there were lots of kids out there that were not being treated well, including in their own families. and that kids need someone to say, oh, they did ok in life, and they're gay, so it must not be a life sentence in some kind of a way. and when i -- we're getting these notes, it would tug on my heart even more. and it got to the point where i thought, i'm making the wrong call by trying to do something that is comfortable for me, which is to stay private.
that i needed to do something for the greater good, and so that's why. david: so no regrets? tim: no regrets. [applause] david: now you're obviously in the public eye. recently, you had a meeting with president trump. what was the meeting with president trump like? tim: you know, i wouldn't want to say what he said. what i talked about was, i talked about trade, and the importance of trade, and how i felt that two countries trading together make the pie larger. and that it is true, i think undoubtably true, that not everyone has been advantaged from that in either country, and we've got to work on that, but i felt that tariffs were not the right approach there. and i showed him some more of analytical kinds of things to demonstrate why. we also talked about immigration
and the importance of fixing the dreamer issue now. you know, we're only one court ruling away from a catastrophic case there. david: do you think you made progress on these issues? tim: i hope so. i hope so. david: apple has roughly $260 billion of cash, more or less. what do you intend to do with that cash? tim: we're going to create a new site, a new campus within the united states. we're going to hire 20,000 people, and we are going to spend $30 billion in capex over the next several years. and so we are -- number one, we are investing, and investing a ton in this country. we're also going to buy some of our stock because we view our stock as a good value. david: did your parents live to see your success?
tim: my mother passed away three, three years ago, and -- but my father is still alive. i am very fortunate. david: so, your mother lived to see you be the ceo? tim: she did. david: and did she say, well, you are great, i always knew you would be successful, and can you help me with my iphone? can you help this? [laughter] tim: i did get both of them on ipad. and i finally convinced my father to start using iphone. and so -- but they, honestly, they've treated me like they did 20 years ago. and 40 years ago and 60 years ago. david: does he call you with tips about what to do or tell you how to do things? tim: if i do something he does not think is good, he tells me about it. i saw you on that show. you weren't very good. [laughter] tim: so i'm hoping you edit this one. david: you're obviously a public figure. you were not before. have you ever thought that maybe you could run for president of
the united states, because -- [applause] david: you, you know, you have seen the president up close. tim: i'm not political, right? i love focusing on policy stuff, but in the dysfunction in kind of in washington between the legislative branch and so forth, i think that i can make a bigger difference in the world doing what i'm doing. and i appreciate the comment, but i think, yeah. you know, the president is something that you would love to be president, but not ever run. and that should never happen in our country, and so that kind of eliminates me. david: of all the ceo's that i know that have run major companies, you are the lowest ego, kind of most self-effacing
person i have seen in this kind of position. so, have you ever noticed you are different than other people who are ceo's? [laughter] david: and how do you maintain this self-effacing, modest demeanor when you're running the biggest company in the world? tim: when you work at apple, there's a high expectation on everyone to perform and to contribute, and because of that high bar, and you never quite get there, including the ceo, including every job in there, and so i'd never feel that way long if i ever felt that way. david: well, thank you for taking the time today. tim: thank you for having me. david: you're the first person i've interviewed without a tie on. this was obviously in your honor. [laughter] tim: i bet you sleep in a tie, david. [laughter] [applause] tim: thank you. ♪
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jonathan: from new york city for our audience worldwide, i'm jonathan ferro. "bloomberg real yield" starts now. ♪ jonathan: coming up, very little in the u.s. economic data to test fed chair jay powell's newly found patience. looking at china and focusing on the silver lining. junk bonds off to the best year since 2001, the lowest weighted to debt. we begin with a big issue, space in the global economic turnaround. >> the consensus is the u.s. is about to slow and slow and it doesn't. >> we are at a bottoming phase.