>> rose: welcome to the program. tonight an encore presentation of my conversation with tim cook, the c.e.o. of apple. >> in introducing these products, there was in the past as i suggested the arena where you had it is where steve introduced 30 years agoed mcintosh. when you introduced the watch, you famously said, one more thing, words that steve had used, where was steve in all of of this? >> well, he's in my heart. and he is deep in apple's dna. his spirit will always be the foundation of the company. i literally think about him every day. his office is still left as it was. >> rose: on the fourth floor. >> on the fourth floor. his name is still on the door. and we still-- if you think

about the things that steve stood for at a macro level, he stood for innovation. he stood for the simple, not the complex. he knew that apple should only enter areas where we can control the primary technology. all of these things are still deep in our company. they're still things that we very much believe. the strife for perfection, for being the best, for only do will the best products, for staying focused. the fact that despite this table being so small that you and i are sitting at, you could put every apple product on it, every single one that we have today and yet this year our revenues will be, you know, approximately 180 billion. there's probably no other company on the face of the earth that could say that. most companies begin to do larger and larger and larger portfolios because you

always-- it's so easy to add. it's hard to edit. it's hard to stay focused. and yet we know we'll only do our best work if we stay focused. and so you know, the hardest decisions we make are all the things not to work on, frackly. because there's lots of things we would like to work on that we have interest in. but we know that we can't do everything great. >> rose: tim cook for the hour, next. funding for charlie rose is provided by american express. additional funding provided by: >> 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: tim cook is here, he is the c.e.o. of apple. he succeeded steve jobs in august of 2011. cook joined apple in 1998 against the advice of his friends and his own better judgement. he has said apple in early 1998 was very different than the apple of today. the company had been losing sales for years and was considered to be on the verge of extinction. he also said working at apple was never in any plan that i outlined for myself but was without a doubt the best decision that i ever made. on tuesday cook announced what he called the next chapter in apple's story, at the same venue where steve jobs introduced the mackintosh personal computer po year east ago, he introduced iphone 6, iphone 6 plus and apple watch and apple pay, a mobile payment system that aims to do something about the credit

card. i am pleased to have tim cook at this table for the first time. welcome. >> charlie, it's great to be here. thank you for inviting me. >> rose: we have much to talk about. you call it the next chapter. why? >> the apple watch is the most personal device we've ever created. the-- i think it takes us into a whole different area. we had a-- we had an intense team working on this for three years. and so we explored many different things. and as the product came to fruition, it became not only the time piece that you would expect, but a device that can do many different things, include really a whole new way of communicating and connecting with people, and also it has a health and fitness component that we think has, you know, could really be profound. >> take your blood pressure and lots of other things.

>> well, it will start with heart, and it will be a-- sort of a personal trainer for you. you can set goals and it will reward you for achieving certain things. you can choose to interact with your doctor. you can choose to combine it with other apps on the phone and get a full view of your house. and so it's a wol new area for apple. and we think, you know, we're all about making great products and enriching people's lives. and we see it as allowing us to do that at a whole different level. and then of course iphone 6, and iphone 6 plus. these are the best i phones we've ever done. and i think you'll agree, you have in front of you, they are the best ones. >> this is my iphone, look at the size of it. this is the iphone 6. >> and this is the iphone 6. >> the thinnest phone we've ever done. the screen is just to die for. it's superfast. it's lightning fast.

it has a whole new range of wireless technology and so it's screaming fast on the wireless network. it's really unbelievable. and it feels unbelievable in your hand. hold it. it's something, it's really unbelievable. the design johnnie and his team did such an incredible job here. it's really seamless between the glass, it's like a singular form. >> rose: yes. but back to what is next. this represents a continuation of the iphone. >> well, a leapfrog, i would say. but yes, it is, the iphone 6, it's not the first iphone. but it's the biggest advancement ever in iphone history. and so we think that the upgrade cycle here and the number of people that will switch from other smart phones, it will be enormous. >> rose: were you challenged

by what samsung does and what it has in the development of this size personal smart phone? >> no, we honestly, charlie, we could have done a larger iphone years ago. it has never been about just making a larger phone. it's been making-- it's been about making a better phone in every single way. and so we ship things when they're ready. and we think that both the display technology here, the battery technology, that everything else and the software, you can on here you can still use this phone one-handed. because you can tap it twice and the screen will come down. and so the engine uity here and the fact that we've integrated software hardware and services which i think only apple can do, this phone now is the time for it. >> rose: there are other watches on the market.

>> sure. >> rose: samsung and others. >> sure. >> rose: is the philosophy of apple we don't have to be first, we want to be prepared to be the best. >> the philosophy has always been to be the best. not the first. if you look back in time at apple, the ipod, the ipod was not the first mp3 player. it was arguably the best. and arguably it was the first modern one but not the first. the iphone was not the first smartphone. blackberry was shipping phones, palm was shipping phones. iphone was the first modern smart phone. and then if you look at ipad, tablets were shipping a decade before. and yet ipad arguably was the first modern tablet. and the first one that met any level of commercial success. the watch which i'm wearing here, will be the first watch-- . >> rose: may i see that? >> you may see that.

and so here-- . >> rose: see if you can get in on this. >> so you can see. >> rose: you can't get this today. >> you can't get it shipped out, early next year but you can see some of the apps i've got on here. i may have some things on here. >> rose: so what is interesting is the outside entrepreneurs can design apps for this watch. >> yes, we've opened it up to developers. one of the reasons we wanted to announce it before shipping so developers will have time to develop software for it. and we think that you know, based on the first few days, i would say there is going to be a lot of stuff available for it. >> rose: there is a fashion item aspect to this too. >> there is. >> rose: johnnie brought in his friend mark newsal. >> he did. and mark is unbelievable. he's another great addition to the apple teamment but johnnie and team recognized that to wear something it had to be incredibly personal. it had to reflect your taste and your-- and express what you wanted to express about

yourself. it's sort of like your clothes and your shoes, you're not going to wear the same thing everybody else does. so most tech companies, i think, look at this as only technology. we recognize the technology itself isn't sufficient. that it had to have a style element. it had to be something that you're proud of wearing. i mean this is connected to your body. and so-- . >> rose: it makes the computer personal. >> it makes it very personal. that doesn't take away from the function of it. the function of it is killer. i mean there is a computer on a chip in here. it's the first one we've ever done. there are 4, 500 components wrapped in one. it has everything from the gpu to the cpu to memory and all the rest. >> rose: you have to have an iphone for it to work. >> it requires an iphone, yes. so because they've been designed to work together. and so things like messages, choosing the cellular system to pull down your messages.

however if you go for a run and you don't want to carry your iphone, music is also on your watch. and so with a bluetooth headset, you can run and listen to your music without your iphone. >> rose: the health-care business is a huge sector of our economy. >> yes. >> rose: this is your entree into that in some way? >> see, this is huge, charlie. because i think, and i'm not looking at it just from the monetary piece of it is, we do want to enrich people's lives. so we want to make great products that enrich people's lives. neither one is sufficient by itself. we want to do both. and so arguably with health care there is a wide open field to make some really profound contributions. and so our entry into this is we announced health kit in june. health kit allows if you want, if you wish, on your phone, you can begin to take

all of the data that's in all of your health apps and aggregate those. you might elect just to use that yourself. you might elect to interact with your doctor on this. and so now all of a sudden we've also got a device that gathers certain fitness data about you and yet so this is yet another way to begin to build a comprehensive view of your life which should empower you to take care of yourself over time. and when you need help, it empowers you to take certain data to your doctor to get help from them. all wile guarding your privacy so that nobody is getting the data if you don't want them to have the data. nobody is sharing the data if you don't want them to share the data. and no, we're not keeping it. >> rose: in introducing these products, there is was in the past as i suggested the arena where you had it is where steve introduced 30 years ago the macintosh. when you introduced the watch, you famously said one more thing, words that steve had used.

where is steve in all of this? >> well, he's in my heart. and he is deep in apple's dna. his spirit will always be the foundation of the company. i literally think about him every day. his office is still left as it was. >> rose: on the fourth floor. >> on the fourth floor. his name is still on the door. and we still, if you think about the things that steve stood for at a macro level, he stood for innovation. he stood for the simple, not the complex. he knew that apple should only enter areas where we can control the primary technology. all of these things are still deep in our company. they're still things that we very much believe. the strife for perfection

for being the best, for only doing the best products, for staying focused, the fact that despite this table being so small that you and i are sitting at, you could put every apple product on it, every single one that we shook today, and yet this year our revenues will be, you know, approximately 180 billion. there's probably no other company on the face of the earth that could say that. most companies begin to do larger and larger and larger portfolios because you always, it's so easy to add. it's hard to edit. it's hard to stay focused. and yet we know we'll only do our best work if we stay focused. and so you know, the hardest decisions we make are all the things not to work on. frackly. because there is lots of things we would like to work on that we have interest in. but we know that we can't do everything great. >> rose: is tv one of those? >> well, tv is one that we

continue to have great interest in. so i choose my words carefully there. but you know, tv is one of those things that if we are really honest, it is stuck back in the '70s. think about how much your life has changed and all the things around you that have changed and yet tv, when you go in your living room to watch the tv or wherever it might be, it almost feels like you're rewinding the clock and you've entered a time capsule and you're going back card-- backwards. the interface is terrible, i mean it's awful. and you watch things when they come on unless you remember to record them. >> rose: so why don't you fix that? >> well, you know, i don't want to get into what we're doing in the future. but we have taken steps with apple tv and apple tv now has over 20 million users and so it has far exceeded

the hobby label that we placed on it. and we have added more and more content to it this year. and so there's increasingly more things that you can do on there. but this is an area that we continue to look at. >> rose: and was this a question for you, among some investors, among some consumers, among some people who write about technology? there was the question, steve was a visionary. can tim continue the apple tradition of creating new products every four years or less? can he reach into the future? does he have that kind of makeup? did that concern you? did you think about that? were you committed to prove that apple had a future beyond the groundwork that steve jobs had laid?

>> he called me one weekend, in august of 11ee. and he said i would like to talk and i said okay, and i go when. and he goes now. i said i'll be right over. and he told me, he said i have been thinking a lot. apple has never had a professional transition of c.e.o.. i'm determined that we will have one now. i want you to be the c.e.o.. and honestly, i didn't see it coming. >> rose: you did not see it coming. >> i know you look at me with disbelief. but you can say i was in denial or whatever, but i thought, i felt steve was getting better. he was still at home but i felt he was getting better. i was seeing him regularly. and i guess at the end of the day i always thought he would bounce. he always had. he had some incredible lows

in his health and has always bounced. and i always believed he would. and so it took me a little by surprise for that. i mean he had talked to me about being c.e.o. before and so i always knew it was his long-term thing. >> rose: that you what become the c.e.o.. >> rose: but not then. >> but not that specific moment. and so he and i had a discussion back in forth about-- because i was testing him on this. i said what kind of things do you want to do as chairman versus me. >> just sort of having a good banter with him. and i go well, i said for example, ads, do you want me to just do the ones that i think are right. or do you want to be involved in it. and he said well, i hope you will ask my opinion on some things. but he-- i thought, charlie on that day, that he would

be chairman for a long time. that i would be c.e.o. for a long time. and that we with continue to work together and he knew when he chose me that i wasn't like him. that i'm not a carbon copy of him. and so he obviously thought through that deeply about who he wanted to lead apple. and so that i have always felt the responsibility of. and i have wanted desperately to continue his legacy. and the apple i deeply love. and so i, from the onset i wanted to pour every ounce that i had in myself into the company. and but in terms of being everything he was, i've never had that objective.

i've never had the objective of being like him. because i knew, the only person i can be is the person i am, right? and i'm not an actor. i would be terrible in hollywood. and so that's what i have done. i've tried to be the best tim cook i can be. and i think that the reality is that apple has always had incredible contributors at very high levels. johnny's been there forever and contributing at an incredible level as has craig and jeff and dan. and you just go arnged the table. we have a new cfo now. there's-- this group of people, and we've recruited angela. angela now runs retail, she is fantastic. this level of people are capable of doing incredible things and you know, it's a privilege of a lifetime to work with them.

>> rose: you have a picture in your office of martin luther king and a picture of robert f. kennedy. robert f. kennedy after his brother's assassination, someone said the difficulty for him while he'll have no rfk as he was to his brother jack, so i might ask the question, do you have a tim as you were tim, steve. >> i think each person, if you are a c.e.o., the most important thing to me is to pick people around you that aren't like you. that compliment complement you because you want to build a puzzle. you don't want to stack chicklets up and have every one be the same. so i believe in diversity with a capital d and that's diversity in thought. and diversity anyway that you want to measure it.

so the people that surround me are not like me. they have skills that i don't have. i may have some that they don't have. what we do is a team collectively are able to do some incredible things. and it is because we collaborate and i see one of my key things in life is to make sure that we collaborate at an incredible level because we run the company functionally, we're not like the typical big company that has n number of divisions and n number of p & ls. everybody is a functional expert and then we collectively to get things done, we work together as a team. because the work really happens horizontally in our company, not vertically. products are horizontal. it takes hardware plus software plus services to make a killer product. and so all of these people, it if you were to line us up and talk to everyone, you know several of them. we're all different. and that is the power of it.

is that we're not trying to put every one through a car wash and so they look alike, talk alike, think alike at the end of the day. we argue and debate. if you were to come in our executive team meetings on mondays, you would hear a lot of discussion and debate about something. we don't always agree on everything. but we have great respect for one another. and we trust one another. and we complement one another. and that makes it all work. >> rose: did the team, you leading the team have any question that you could accomplish what you did knowing those questions were out there about the future of apple. >> i think for me, i can't talk about what everybody else thinks but for me, one great still i have is blocking noise. and so i typically read and listen to things that are deep and challenging and

intellectual in nature, not the-- just the noise. i think if you get caught up in the noise as a c.e.o. you are going to be a terrible c.e.o.. because there's so much noise out there in the world that everybody is on the sidelines saying what you should do, shouldn't do. et cetera. it's sort of like the old roosevelt quote in the arena. >> rose: right, teddie roosevelt. credit belongs to the man in the arena that gets dirty and all of those things. >> yes, well i'm the dirty one. and you have to block the noise. and so the question i think is did i have doubts. the answer is no. and did the executive team have doubts. i think you can see in our product that we were all betting on each other in a big way. >> rose: but then it goes back to my original question, apple is becoming, it's building on its tradition. but it's doing things different. steve said to you, don't

ever ask yourself what would steve do, correct. >> he did. >> rose: don't ask that. do what you think you need to do based on the circumstances that you face. so is apple becoming more open? i have mentioned the fact that people who have create apps can do it for the watch. you are now engaged in partnerships with people like ibm. you've made an acquisition. tell me where is apple going? >> are we more open, yes. >> rose: are we more engaged by partnerships? are we interested in enterprise because we can partner with ibm? >> i think-- ibm, that's a great one to talk about. because i think it will give you an insight into how we look at things. this is probably different than the past. we lack at these products and the ipads that aren't here, and we think we can

change the way people work. we've changed the consumers' lives. we've changed the way students learn and teachers teach. but when you get to the working environment, the change that we made to us isn't significant enough. and so we begin to ask ourselves why, why haven't we done more. the real answer is in the application, there's not enough apps that have been written for verticals, for very deep verdict calls like what the airline pilot does, what the bank teller does, down at the level of the job. and so we begin to ask ourselves should we do this, or should we partner or should we just forget it. and i didn't want to forget it. because this is the way to enrich people's lives in a big way, to change the way people work. i mean most of our life is spent working. and certainly our apps are changing in the way i work.

but i'm not seeing it as much in other places. and so we begin looking out and thinking about well, without could we partner with. and jenny and i had been talking about some other things for a while. i have great respect for her. great trust in her. >> rose: the c.e.o. of ibm. >> she is fantastic. and we begin to talk about this area. you know, this is an area where they have got things that we don't have. they have deep vertical knowledge of many different verticals, right? they have a huge sales force. and so ibm brings significant enterprise knowledge to the table. we bring the products that enterprise wants. so we have something they don't have. we also don't compete on anything. to me this is the perfect marriage. there's no-- there's no friction. there's just, we have what they need. they have what we need.

together we can provide something to customers that is blow away. and so ibm is in the process with our help of designing many different apps for many different verticals, from banking to all the different financial services, to pharmaceuticals, to aerospace and manufacturing and so on and so forth. and they have the go to market that we don't have. and so this is an area where i think that everybody is going to win. we're going to win. ibm is going to win. and more importantly than both of us, the customer is going to win. >> rose: why did you think you had to buy a head phone manufacturer? >> what we saw in beats what we saw is several things. we saw-- . >> rose: talent. >> a talent that i'm superimpressed with. jimmy and dre off the chart creative geniuses. they also had teams underneath them that i really liked.

jimmy has a deep knowledge of the musical industry. dre knows artists. dre is an artist. and they had started a subscription service. and this subscription service, you know, some people think they're all a lake. let me tell you, i went into the thing skeptically. >> rose: the acquisition. >> not to the acquisition, into their service because jimmy had told me how great it was. and so one night i'm sitting playing with theirs versus some others. and all of a sudden it dawns on me that when i listen to theirs for a while, i feel completely different. and the reason is that they recognized that human cureation was important in the subscription service. the sequencing of songs that you listen to, affect how you feel. it's hard to describe. but you know it when you feel it. and so that night i couldn't sleep that night and so i

was thinking, we need to do this. they also have, i think they've done a nab louse job with their brand. in the head phone business. it's a fast-growing business. they went into it not too long ago. and have done really well. however they need aid global footprint. we have a global foot print. they have been primarily u.s., not solely u.s. but prime leigh u.s. and so i felt we could get a subscription service. we could get incredible talent. and that i think we can all put our heads together and do some things that are beyond what either of us are currently doing. and we can get a fast-growing business. and you know, financially it's not the only element of looking at it at all, but next year, or in our fiscal year which is about to start, it's accretive. when is the last time you heard of the technology c.e.o. saying that they were doing an acquisition that

was accretive? i mean it just doesn't happen. and so i think it's wonderful to get the influx of talent, the different perspectives. it's this idea of diversity, that i use in a big way. i think it's really going to help us. and i am 100 percent sold on the subscription, music subscription service. and of course we can scale it where beats would have had a more difficult time because they're a small company. >> rose: is the new chapter in apple also defined by the fact that you're moving away from just being essentially a hardware company? >> you know, i wouldn't say that we were never just a hardware company. so i would define that a little different. >> rose: it is different if your revenue comes from the iphone, for example. >> a significant part of the iphone is the software. and the services. >> rose: right. >> it's just that we don't split out the price between the hardware and the software and the services.

>> rose: all part of your own ecosystem. >> part of our own ecosystem and we do that because it all works together. it just works when you do it that way. when you split the two, you wind up with-- think about what happened in the pc area. when you had a winnows and a separate oem that was doing hardware and then somebody else that was doing apps. and you have a problem, you're pulling your hair out. you call the help desk and the help desk tells you to call another help desk and that help desk tells to you call somebody else and the other guy doesn't even have a help desk. so we recognized early on that these kind of devices, you really need to have a wound to tomb view on this for the customer's sake. so if somebody calls us, it's our problem. we're not passing the buck. and so i think you get a much better customer experience. >> rose: but dow miss opportunity to take advantage of a whole group

of people because -- >> well, look at our ecosystem, charlie. i mean we've got 9 million registered developers. and so we're not having a problem getting people to develop for our platform. if you were at our conference in june in san francisco, there is developers there from almost every country in the world. and they are writing for-- . >> rose: you have access to all the innovation. >> we have incredible access to innovation. and we've also view it an treat it, it's a privilege, to work with developers we do. and so we treat them like it's a privilege. and from their point of view, they get to design something from a company that has over 90% of their customers on one version of the operating system. so we're not fragmented like and road is. right? we've got-- we'll release ios 8 next week. and right now ios 7 the one we just released a year ago,

92% of our customers are running ios 7. if you looked at a comparable number for an dry-- android it's very low, if you look at windows on the pc side, very low. and so you can really write software to the latest, or write your app to the latest software versus spending your time on all of these versions and iterations and so forth. so it's great from their point of view and they get to sell their product worldwide. think about how it used to be if you were a developer. you had to go negotiate with every retailer and there's no global retailer. and so you were negotiating in every country in the world trying to get your product on the shelf. here you can push a button, we review it, and it quickly gets in the app store and it's in an app store in 155 countries. i mean it's really shocking that the jobs this thing has created is unbelievable. we're now between the people

that we employ directly and the developers and developers are a big piece of this, we are responsible for a million jobs in the united states. and a lot of that are people that have concluded to write apps. >> rose: who is your competition? >> well, google,. >> rose: people would clearly say samsung instantly because of the product. they make smart phones like this. not like this but they make smart phones. they have the android operating system which is the largest operating system in the world. >> google supplies that too though. >> rose: right. >> and so i think, i would say-- . >> rose: google is your competition. >> google would be at the top. and then they enable many people in the hardware business liksamsung, and samsung is the best of the hardware companies in the android sphere. >> rose: google is competition, who else?

>> you know, who else? the big four are amazon in terms of most people's consideration, amazon, apple, facebook. >> yeah, i don't consider facebook a competitor. i consider facebook a partner. we're not in the social networking business. >> rose: and will not be. >> we have no plans to be in the social networking area. we partner with both facebook and twitter. and we have intergrated both of them into the operating system. and so we work closely with both of them so that our customers can get access in a different and unique way to their services. and we like both companies. >> rose: amazon. >> amazon, we don't work with that much. we have little relationship there.

they sell as you know they sell, they-- the phone. you don't see it in a lot of places. they have some tablets. but they're not a product company. apple is a product company. and in so in the long-term will they become a bigger product company? i don't know. you would have to ask jeff what his plans are. but when i think of competitor, i always think of google as the-- . >> rose: so all the successes you have pointed to, when you do something that's not as much of a success and i'm obviously thinking of maps. >> uh-huh. >> rose: and you look at it, what did you do wrong? >> we screwed up. to put it bluntly. there are many screwups in that one. not just one. there's many. and we have learned and collected-- corrected and are continuing to invest in maps. because our fundamental

premise that maps were really key to apple is when we made that call many years ago, but we did screw up on the release. it should not have happened like it did. it shouldn't have come out. and you know sometimes when you are running fast you slip and you fall. and i think that the best thing you can do is get back up and say i'm sorry and you try to remedy the situation and you work like hell to make the product right. if you are probably never making a mistake you are probably not doing enough. >> i mentioned the beginning interview, the fact when you made a decision in 1998 about apple. you had some reservations. but at the same time, during your interview with steve, you said something like this. i was prepared within five minutes to throw caution to the wind. what did he say?

that made you believe this company is the place for tim cook? >> it was an-- it was an interesting meeting. i had gotten a call several times from the search people that he had employed. and i kept saying no, i was with coming pact, i was happy, or thought i was. and they were persistent. and so i finally thought, you know, i'm going to go out and take the meeting. steve created the whole industry i'm in. i would love to meet him. so i'm honestly going into the meeting-- . >> rose: there is no downside to this. >> i'm just thinking i'm going to meet him. and all of a sudden he's talking about his strategy and his vision, and what he was doing-- doing was going 100 percent into consumer when everybody else in the industry had decided you couldn't make any money in consumer so they were headed to servers and storage and

the enterprise. and i thought, i always thought that following the herd was not a good thing. was a terrible thing to do, right. you were either going to lose big or lose, but those were the two options. he was doing something totally different. and he told me a little about the design, enough to get me really interested. and he was describing what later would be called the imac. and the way that he talked and the way that the chemistry was in the room, it was just he and i. and i could tell, i can work with him. and i looked at the problems apple had and i thought you know, i can make a contribution here. and working with him and this is the privilege of a lifetime. and so all of a sudden i thought i'm doing it. i'm going for it. and you heard this voice in your ear that says go west

young man, go west. i was young at the time. but you know you come back and you try to do the things that people do with spreadsheets and stuff. and none of it makes sense. it didn't make sense. and yet my gut said go for it. and i listened to my gut. there was literally no one around me that was advising me to do it. >> rose: but in your speech at auburn, your commencement speech you spoke to intuition. >> yes, that's what i mean by gut. my intuition was telling me loudly to go. and it wasn't based on you know, as an engineer, you want to write down pros and cons and the financial part you want to look at and you want it to say go. you want it to sort of validate the decision that your gut-- and it never did. michael dell had made a

comment weeks earlier that if he was the c.e.o., and he is and was a very respected c.e.o., that if they were the c.e.o. of apple he would close it down and give the money back to the shareholders. that it had no future. >> rose: i remember he said that. >> and he was just saying what everybody thought. >> rose: they didn't know steve jobs. >> they didn't know steve. and so in that meeting, i concluded all of those guys are wrong. they don't know him. and they don't know his vitions. and they-- his vision. and they don't-- they see things in the traditional way which steve never did. he was always looking well beyond the-- norm. >> rose: and looking at things with a beginner's eyewitnesses yes, he had a gift for that. he clearly had a gift for that. and he took that gift and embedded it in the company. it wasn't a gift that he kept to himself. and so one of-- one of

the -- i loved many things about him, because he's a dear friend. but he was also a great mentor. he was a great teacher. this is something that is never written about. but what he left in not just me but many of us, is what he taught us. he was one of the best mentors in the world. >> rose: this is more than perfectionism. >> it's much more than that. because that's holding the bar so high that it's very hard to hits. and but know, it's teaching. and it's teaching and making sure people are learning. and him taking such an interest, he's going out of his way to do this. and i saw him do that over many years, with not just me but many people. and i think it's missed, it's a huge, huge part of what he did that is missed

in most of the things that i have read. >> rose: the misconception misses that, the teaching aspect. >> it does, that and the human aspect. he was an incredible human being. and i think you know i've never read anything that really captureed him or captured the steve i knew. >> rose: one of the products you introduced is apple pay. do you have a relationship with credit cards in creating apple pay? >> yes. >> rose: some say why don't you just go around them, you know, be disruptive. >> as it turns out, people love their credit cards. and so i don't know what credit cards you have. >> rose: too many. >> but many people love their credit cards because they might love that you collect airline points. >> right. or there is something about it that's sticky. >> rose: so you thought-- go ahead. >> so we looked at the industry and we said, you know, people like that part. and so we are about making

the users life better. making the experience better. we saw all the mobile payment stuff that had been done as none of it was making anybody's life better. it was more about creating a business model for someone else to make money. we started with a user and we said what did they really want? well, nobody wants to carry a wallet. you don't want another thing that you have to remember to put in your pants when you walk out the door. you don't want another thing to lose. you don't really want this card with exposed numbers on it that has a huge security risk on it. and so we fixed the security issue. our system is much more secure than the traditional credit card system is. we kept the thing that people liked. which is they do love their card. and we said we don't want any of this date. so we're not doing what other companies are doing. we don't want to know what you're buying am we don't want to know where you're buying it. we don't want to collect all this stuff on charlie. i don't want to know where you're spending your nights.

so we firewall all the stuff, we don't keep it. it's not on our servers. and and so we kept what is great and fixed what wasn't. the retailers love it because it's a far more he anybody-- efficient way for people to check out. >> rose: tell us how it works. >> it's very simple. so if you take one of our phones, this is iphone 6, lit really leigh all you have to do, this one is not wired but if it were, all i would have to do is touch my -- touch the i touch or the touch i.d. rather, and hold it within proximity of the terminal and that's it. it's done. the transaction is finished. because you've authenticated with your fingerprint, rate, which is hard to steal a fingerprint. and you have not pulled out a card. you've not jostled through your wallet-- wallet for something you may have also. you haven't had to run your credit card through a machine several times for it

to reject your card. none of that is done. it is as simple as boom, boom, it's done. >> rose: technology is a very global thing as you well know, as well as anyone. emerging markets are where a lot of people are coming to the middle class. and they have buying power. >> absolutely. >> rose: china, brazil, lots of other places. how do you sea that market? and how does apple do well in that market? >> well, in china if you look back at the last year, our business in greater china is about $30 billion. and so my knowledge that's larger than any american company. certainly in technology, and maybe largest of any area. we put a lot of energy in there for years. we have had very fast growth but you're exactly right. ultimately what is causing that is you have a significant number of people moving into the middle class, large numbers, unprecedented

large numbers this is also happening in brazil. it's happening in turkey, it's happening in thailand, it's happening in many different places, indonesia beginning, set a different place in that curb. >> rose: does price point become an issue in terms of people that don't have the same per-capita income as they do in the united states. >> yeah, certainly income is a gaining factor. but there's a lot of retailers that will allow smart phones to be paid for over time. in china, there's a subsidy on smart phones if you sign a contract much like the united states. and so there are ways to make it more affordable. also, this is iphone six and six plus. but we also sell iphone 5 s, and iphone 5 c. and all of these just got lower prices on tuesday.

>> because. entry of the new products. >> and so you will find in emerging markets the mix of product sales are sometimes different in those markets versus other markets. >> rose: you spent a lot of money on research. >> we spent a lot of money on r & d. that number has ramped dramatically. that's true. some of that is spent for things that aren't shipping yet like the apple watch is an example of that. you know, i have announced it. everybody can see it. but we've been spending money for three years on it because we started development about three years ago. and there's obviously other things that were working on that right now is apparent. and so we are always doing that. and we're also working on things like this that is apparent. >> rose: here's what is interesting about you and about steve jobs. >> rose: it's hard to

get-- it's also this though. john door told me the story once about going with steve into a camera shop. an steve stood there and sort of asked to see this camera and that camera and said boy, we could make a better camera. you get a sense that you guys have ideas for products that might be part of the future which no one knows about. but your thinking about it. you're looking ahead and saying -- >> there are products that we are working on that no one knows about, yes. that haven't been rumored about yet, yes. and part of some of those are going to come out and be blowaway, probably. and some of those will probably decide, you know, that one we're going to stop. and so we kick around a lot of things internally. and we might start something and get down the road a little bit and have a different idea. i mean steve told a story on the publicly about the ipad.

ipad was started way in advance of when it came out. many years before. it was put on the shelf. >> rose: -- was not a yu new idea. >> it was shelfed with the idea to make iphone. and the team was reallocated to work on iphone and then the iphone came out and after iphone got up and running, brought the ipad out. and so there are always things that we're looking at that are drawing r & d expense, where there's not associated revenue. >> rose: that may be ancillary, you may find something along the route to doing something that you wouldn't have imagined or gotten there unless you start on that road. >> that's right. a lot of what leads to innovation is curiosity. it's curiosity to begin pulling a string and you see where it takes you. and a lot of what we do isn't apparent to the public in the beginning where it's going to leadment like touch

i.d. as an example. we did touch i.d. a year ago. people thought a lot of people just thought touch i.d. was a way to get into your phone. and it's very cool at doing that. but then we also said well, you can buy apple. you can buy stuff from apple with it. obviously the entire time we were planning to do a much broader rollout for payments with touch ismted it. but we invest in a lot of things that have long ten ago els and you know, for decades or so. not just for point products. point products don't thrill us. >> rose: hacking of i cloud, cost a the lo of people. >> it hasn't wasn't hacked. there is a misunderstanding about this. if you think about what hacking i cloud would mean, it means somebody could-- it means somebody would get into the cloud and could go fish around in people's

accounts. that didn't happen. what happened was let's take-- it didn't happen to you, i hope. but let's take you as an example. somebody could say oh, i know charlie's i.d. from somehow. >> rose: i know his e-mail perhaps. >> maybe it's his e-mail. and they may guess your password. or that's not as likely. they might fish it. how do you fish it. i could pretend to be somebody else. and you could you be knowingly give me your password. and that happens on the internet too many times today. that's the number one issue by far. and it's not just-- it's not an apple issue. this is an internet issue. you just saw that this happened to i think millions of gmail users, they were fished. my understanding was it wasn't a breech there either of the infrastructure. it was a fishing expedition. there are lots of bad people that do this.

and what we have said was instead of just saying hey, there's a lot of bad people that do this, we need to figure out how can we try to protect our customers on this. that's our top goal. and so we're working internally about how to bring more awareness to these screams-- schemes and trying to do things to-- . >> rose: public information process? i mean -- >> some of it is that. some of it is like the old, like an old public service announcement, used to be. we have to do that and then in addition we have to do things where it notifies the customer quickly if it does happen. that's reactive and we don't want it to happen at all. but if it does you probably want to know instantly. and so there are things like that and some other things that i can't describe right now where we think we can make a description beyond just doing, just making sure

the cloud's not hackable. >> rose: this is different then the hacking of home depot. >> very different, totally different. >> rose: for more about this program and earlier episodes visit us on-line at pbs.org and charlie rose.com captioning sponsored by rose communications captioned by media access group at wgbh access.wgbh.org

. >> rose: funding for "charlie rose" has been provided by: additional funding provided by: >> and by bloomberg, a provider of multimedia news and information services worldwide.

this is "nightly business report" with tyler mathisen and sue herera. good evening, everyone. and welcome to a special labor day edition of "nightly business report." i'm sue herera. tyler is off tonight. labor day, a day dedicated to the american worker. it's the perfect time to discuss employment, a key gauge of economic health that everyone has an eye on. tonight we'll examine the important issues that lie ahead for the job market from minimum wage to where the jobs are. we'll find out which parts of the country are geared up for growth, and we'll even tell you the best cities for pay raises. we begin tonight, though, with a look at how the work force is evolving and how that evolution is creating opportunity. the sharing economy, for example, is fueling a boom in nontraditional positions, and