>> it's been nearly six years since tim cook took over for cofounder, steve jobs. each year, the company becomes more cook-owned. unveiled the apple watch and apple music. largestd off the acquisition in apple's history, buying beats. environment, the philanthropy, equality and education. he stood up to president barack user privacy and maintains a dialogue with president trump despite their on climate change. now, as iphone sales plateau, at where theain big innovation at apple is going

to come from. cook as he with stakes out new territory for the company's future, from t.v. to first newpple's product category in years, a smart speaker called homepod. a direct challenge to amazon and google. on this edition of "bloomberg apple c.e.o. tim cook. >> tim, thank you so much for joining us. it's really a pleasure to be here. again.t to see you unbelievable to be here obviously. newet's start with the smart smeerk. smeerk -- smart speaker. should people buy it, over amazon echo or google home, at price? >> we've tried to build something that is a breakthrough speaker first. d.n.a., deep in our dating back from itunes and ipods, so we wanted something one, sounded unbelievable. of of course it does a lot other things, right? and all those are important as

well. reallywanted a high-quality audio experience as well. >> you are very focused on how this could reinvent music in the home. what about these other things? phone be able to make a call, call a car, order groceries? >> there's a lot of things you can do with it. one of the va advantages we havs of things that siri knows how to do, from the phone. and so we'll start with a patch of those. and then you can bet that there's a nice follow-on activity there as well. >> so let's talk about e-commerce. toommerce is very important these devices. my --order paper tulos on paper towels on my amazon echo. retail?s tell us about >> what i would read into it is apple is a company that deeply music.bout and wants to deliver a great audio experience in the home. we feel like we reinvented it in

we portable player area and think we can reinvent it in the home as well. people want aat speaker now to do more than that. and obviously we want a speaker than that, and so we're sort of combining what has been thought of to be two distinctly different things until now. beenw long have you working on this? >> multiple years. the underlying technology in here is something to behold. get the experience that we wanted at the quality we know, like apple products in general take startingyears to do, from the core technology and then building up to the product. >> you have people out there finally! what took so long? know, for us, it's never been about being first in anything. back, we didn't have the first mp3 player.

we didn't have the first smartphone. we didn't have the first tablet. there was a tablet shipping a decade before. very few people used it. arguably we shipped the first modern mp3 player, the first modern smartphone, the first modern tablet. weren't first in any of those. so for us, it's not about being first. it's about being the best. >> it's the 10th anniversary of the iphone. ios, iosveiled the new 11. what does that tell us about what's next? that ios 11 isou unbelievable. both for iphone and ipad. there's incredible things in it to peer payments. it's the biggest ipad release ever. i have greathat personal excitement in -- i'm it, but i'mt all of incredibly excited about a.r. this developer release

out in the hands of the developers, we'll have the augmented reality platform in the world. consumers?ut when will consumers see an apple a.r. product? >> as a platform owner, the and arguably in some ways the most important is to build the foundation and then foundation, you can do many things off of it. but first you have to have a solid foundation. >> peter teel said that he believes that innovation in smartphones is over. are the days of quantum leaps in smartphone innovation over, or are there more quantum leaps to come? don't agree with that view at all. the things that drive quantum technology. core when i think about all of the things that are going to change from a core technology point of in the future, i think we're just getting started. so i'm incredibly excited.

and clearly, there's nothing i think -- i think virtually anybody would say is to replace the smartphone anytime soon. and, you know, as time as gone has becomertphone more important to people's lives. started, the phone call was still a dominant reason for having it. now, if you look at what people smartphones, it's a minor piece of what a phone is now. at that, and look kit and whatealth that's done in terms of getting people's health data on, car it in the car,f i'm controlling all of my house the iphone.ing and so i think about all of isse things, the usage of it now -- it's something you just don't leave home without your iphone. and so, no, i think it's in the

early stages still. i don't see it in that light at all. >> controlling your home with fairlyvice is still a niche behavior. when do you see that becoming more mainstream? going to become more mainstream this year, honestly, because we built it 10. ios and after that, you saw more and accessories coming to the market that were home kit enabled. easy to set up. we just made it easier for accessory vendors to be compatible with home kit, because you now can use software encryption. have to actually have hardware encryption to go. unleashes that also even more accessory guys to join. increasinglye are going to want to automate different parts of their home. i wouldn't live without it at point. it's one of those things that you go, wow, how could i ever have done that in a different manner? >> in the past, you said the

ipad is the clearest expression for our vision of the future of personal computing. mac sales are holding steady. continue to fall. why is that? i'mell, we make both, and happy with whatever people choose to buy. mac.people will only buy some people will only buy an ipad. and many of us want both honestly. so what we tried to do with the ipad is bring even more features to it. i think a lot of people that may pc's may look at this have ande they'd rather ipad pro. i think people that have an ipad will want to upgrade. remains very important to us. so i see it as both of them are computing devices. and i -- we're going to keep weesting in both, because think both have a great future. one of the reasons that ipad, on surface, you know, just

looking at the numbers, you go, oh, the units are going down. that the ipad mini came out at a point in time that fairly small.re people had three and a half inch, maybe four-inch kind of on their smartphone. and so one of the things you're to ag is a natural move smartphone not taking all of that market but taking a piece of it, and obviously we're okay with that too. the seven-plus has been phenomenal. seeing growth rates there that have shocked us. ♪ >> you called president trump pull out ofm not to paris. >> i did. >> he didn't listen. what does that mean for your relationship with the president? ♪

>> you've been engaged with this white house. you called president trump and urged him not to pull out of paris. yes.did, >> he didn't listen. what does that mean for your relationship with the president? think, actually i would say it a little different. me -- i he did listen to i think he did listen to me. he didn't decide what i wanted him to decide. decided wrong. i think it's not good, not in the best interest of the united what he decided. but in terms of, you know -- the thing,t i look at this and do you interact with poll not, myans or do you view is that first and foremost, are about, can you help your country? and if you can help your country do that by interacting, then you do it. eclipses politics.

so, you know, if there's something that we can work that helps people in the united states, then of course we would do it. >> you have other people that are leaving the table, like bob iger, like elon musk. jeopardizingent his relationship with one of his key constituencies, the business community? >> let me differentiate leaving a council and advising in a way think can help our country. is ank the first one judgment call that people make. and sot join a council, it's not a decision i had to make. but i understand both sides of that. but advising on something that believe will help america, i think, is a requirement as a c.e.o. you definitely do that. and, you know, honestly if i get chance to go pitch the paris

i'm gonna do it again, because i think it's very important that we engage to fight climate change on a global basis. this isn't something where you can solve it country by country. it requires a global action, you know. emissions created in one country affect another. so, you know, it's something very strongly about. i wanted to do every single we could do to tell was to stay int the agreement. unfortunately, he decided something different. >> why didn't you join a council? >> why didn't i? because -- two reasons. one, my primary job is being the c.e.o. of the company. and i spend the bulk of my waking hours doing that. and i do so willingly, because i love the company and the people

in it. traveling back east isn't something that i look forward to doing except when i need to do it. don't find these councils in general in terriblys to be productive. wantingasn't about not to advise on something where i that, you know, we could help or we had a point of view that should be heard. so i'm doing the latter. i can't imagine a situation where i wouldn't do the latter, because i think it's in the best interests of america to do it. am, first and foremost, an american. repatriation, this is an issue that would be important to apple and potentially to the country, how would you like a repatriation to be structured? a required tax. theso you're not asking

people that have had earnings international subsidiaries if they'd like to bring back money. saying that you must pay x percent now or over some period of time. and i think my own advice would be that the u.s. use that money for a significant infrastructure the u.s., because it creates jobs. and i think there's few people that would argue that we don't an investment in america. and so that's what i think should be done. it should have been done years ago. but it hasn't. and so, you know, tomorrow is good. >> you've made it clear that the privacy of apple users is of asost important to you, even tariff taxes continue to happen around the world. a new ios strengthen user

privacy? >> these terrorist attacks, first of all, our heart goes out to everyone affected by them. their horrendous. and the u.k., for us, we've been in the u.k. pretty much the for ouring of time company. they're als like neighbor. we have thousands of employees there. so our heart goes out. and so, what do we do from a helping with this? one thing since the beginning of the app stores. we curate the app store. we don't want hate speech on there. we don't want, you know, these recruiting kind of things on there. so we've tried to be very beginning about not having stuff on there. i'm not saying we'll never make but actually, i don't know of a case where something has gotten through.

also -- we've been cooperating with the u.k. in not only law butrcement kind of matters on some of the attacks. and i can't speak in detail about that. but in cases where we have information and they've gone through the lawful process, we -- not just give it but we, you know, we do it very, very promptly. i think, i would hope, that they say that we've been cooperating well. and i think, you know, that some valuable information. so i think there's a misunderstanding about -- encryption didn't mean there's no information, right? because likely megadata exists. metadata, if you're putting together a profile, is very important.

>> can we assume that apple is to makeorking encryption even stronger? is that these andr attacks on people governments and -- i mean, it's happening left and right everywhere. these affect your safety, your security. so it's not just privacy. it's not privacy versus security. security versus security. and so we're always working to step ahead ofe these hackers that, frankly gone from the guy ofthe basement that's a kind to a sophisticated enterprise. it takes all we can do to do it think our users should have to think through all this stuff. it's not practical for people. try to stand up for our users and stay one step ahead of

these guys. >> you said cars are an area for disruption. how important is it that apple not miss out on cars? ♪ ♪

>> let's talk about the world's second biggest economy. china. >> yes. navigate whatple seems to be uncertain economic and political waters there? >> well, china, for us, we make all of our decisions for the long term. not investing for next quarter or next year. we are thinking about many, many years out. and as i stand back and look at see megatrends there that make china an incredible market. i don't mean to -- i don't mean just a market to sell in. mean a market for application developers. we have a million and a half developers in china now. probably closer to two million

now. an incredible and inlace for talent terms of the size of the marketplace. so the short-term kinds of down, i moves, up and don't get too excited about. realistic is it to expect that double-digit growth for apple can continue in china? didn't continue last year. and so -- >> are the days of double-digit growth over? do better thisl quarter than we have the last several. that doesn't mean that we're thatng double digit or we're going to grow. it means it will be better year year from the previous ones. the mostat iphone 7 is popular in china. last year, the size of our business was almost $50 billion

in greater china. we're gonna stick at it, a huge i think china is opportunity over time. characterizeyou tim cook's apple over steve jobs's apple? >> well, i don't think about it very much. what would i say? i guess i would point out that steve's d.n.a. will always be the d.n.a. of apple. or it will be certainly as long as i am c.e.o. and i think as long as anyone is, honestly. i think it's deeply embedded in celebrate it.d we and it should be like that. that.uld stay like obviously things evolve over time in some other areas, as if he werehave sitting here sh interviewing with you today. there's clearly, i'm sure, some things. but that's probably a better somebody thatk worked for both of us. >> you said cars are an area

disruption. how important is it that apple not miss out? on cars? >> i think there is a major disruption looming there. not only for self-driving cars electrification piece. all-electricven an car, it's actually a marvelous experience. marvelous experience not to stop at the filling station or gas station, whatever you want to call it. and so -- plus you have ride-sharing on top of this. right? so you've got kind of three change happening generally in the same time frame. at it in whatlook weiwe're focusing on or what wee about focusing on publicly, is we're focusing on autonomous systems. one purpose of ah autonomous systems is

self-driving cars. there are others. we sort of see it as the mother of all a.i. projects. it's probably one of the most difficult a.i. projects actually work on. so autonomy is something that's incredibly exciting for us. and -- but we'll see where it us.s we're not really saying from a product point of view what we do. but we are being straightforward technology that we view as very important. >> you're working across so many different platforms, whether t.v., the watch, the ipad, the mac, the phone. you see now as your vision for the future of personal computing, across all these platforms? >> the great thing is they're the same core technology, right? through howne they're used and the experience that's needed to get the best

in eachce for the user of the cases. and so out of that came watch os, t.v. os, ios and mac os. begin to when you merge, that the risk is the common denominator kind of approach, and we're staying away from that. i know others that have a that, but thaton is our view, and we are straightforward with it. leave it there, apple c.e.o. tim cook. with you.o spend time with you.

scarlet: i am scarlet fu. this is "bloomberg etf iq." where we focus on the access, risk, and rewards offered by exchange traded funds. ♪ scarlet: do you need star power like a quincy jones linked index to get assets to $16 trillion by 2024? we discussed what role celebrity endorsements can play in the industry's growth. why dan draper is for computer programmers rather than mbas.