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Tim Cook’s Apple Turns Five: CEO Talks iPhones, Taxes and His Eventual Successor in Lengthy Q&A

Tim Cook has marked five years as head of Apple with a lengthy interview with the Washington Post, offering his take on the tech giant's reliance on the iPhone, the world of artificial intelligence…

Tim Cook has marked five years as head of Apple with a lengthy — we’re talking 10,000 words — interview with the Washington Post, offering his take on the tech giant’s reliance on the iPhone — which constitutes two-thirds of Apple’s sales — (not) falling behind in the world of artificial intelligence and what his successor will look like. He also went deep on allegations that Apple is dodging taxes in the U.S. by sheltering international profits in Ireland, saying he was “optimistic” that corporate tax reform could be enacted next year that would bring much of that money back to America.


Here are select highlights from the Q&A:

ON IPHONE OPTIMISM: “The global market for smartphones is 1.4 billion. Over time, I’m convinced every person in the world will have a smartphone. That may take a while, and they won’t all have iPhones. But it is the greatest market on earth from a consumer electronics point of view…. Look at the core technologies that make up the smartphone today and look at the ones that will be dominant in smartphones of the future — like AI. AI will make this product even more essential to you. It will become even a better assistant than it is today. So where you probably aren’t leaving home without it today — you’re really going to be connected to it in the future.”

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ON APPLE’S AI STRATEGY: “What we’ve done with AI is focus on things that will help the customer… There are other things in there, like if you’re typing in mail, the prediction capability of the next word or next phrase that you will use has just — Siri has gotten a lot smarter about that. I’ve been using it for a while, but if you haven’t used it you should try it. The ability to recognize faces in photos and put those into the modern equivalent of a photo album — we call this product Memories.”

ON AUGMENTED REALITY: “I think AR is extremely interesting and sort of a core technology. So, yes, it’s something we’re doing a lot of things on behind that curtain that we talked about.”

ON THOSE CAR RUMORS: “We’ve always viewed that people love surprises. We don’t have enough anymore in our lives.”

ON HIS EVENTUAL SUCCESSOR: “We have the good discipline to do that. Then my role is to make sure that the board has great candidates to pick from internally. And I take that role extremely seriously. Look around at the great people I get to work with — there’s some really just superb talent in the company.”

ON APPLE’S INTERNATIONAL TAXES: “The money that’s in Ireland that [critics are] probably referring to is money that is subject to U.S. taxes. The tax law right now says we can keep that in Ireland or we can bring it back. And when we bring it back, we will pay 35 percent federal tax and then a weighted average across the states that we’re in, which is about 5 percent, so think of it as 40 percent. We’ve said at 40 percent, we’re not going to bring it back until there’s a fair rate. There’s no debate about it. Is that legal to do or not legal to do? It is legal to do. It is the current tax law. It’s not a matter of being patriotic or not patriotic. It doesn’t go that the more you pay, the more patriotic you are.

“And so what we’ve said — we think it’s fine for us to pay more, because right now we’re paying nothing on that and we leave it over there. But we — like many, many other companies do — wait for the money to come back.”

EU Regulators Say Ireland Gave Apple Sweetheart Tax Deals

ON THE LOOMING EU RULING ON WHETHER THEY OWE BILLIONS: “It’s important for everyone to understand that the allegation made in the E.U. is that Ireland gave us a special deal. Ireland denies that. The structure we have was applicable to everybody — it wasn’t something that was done unique to Apple. It was their law.”

ON THE BROKEN CORPORATE TAX STRUCTURE: “I think it’s in the best interest of the U.S. to have corporate tax reform, regardless of which political party is in charge of the White House. Because if you look at it, the U.S. rules today are that international companies like us and many others can keep their earnings that they earn overseas overseas, and then when they bring them back it triggers the tax liability… We’re the only major country in the world that has a system like this. It’s not good for the U.S., it’s not good for the economy, it’s not good for jobs, it’s not good for investments… So I’m optimistic that, in 2017, there will be some sort of corporate tax reform.”

Read the full interview here.