Apple Operations Chief Jeff Williams Talks Apple Watch, Teases Car Rumors
Asa Mathat for Re/code
Mobile
They call him Tim Cook’s Tim Cook. Apple’s operations chief Jeff Williams may be less well known than some of the technology giant’s other senior executives, but when he stepped on the stage at the Code Conference he demonstrated a relaxed mastery of a range of topics, from the intricacies of Apple’s complex supply chain to the long-range potential of ResearchKit.
As one of Cook’s trusted lieutenants, Williams has played a significant role in Apple’s entry into new categories, including the recent debut of the company’s first smartwatch, and, before that, the mobile phone market with the launch of the iPhone. He has overseen worldwide operations for the iPhone since 2007.
Williams oversees a sprawling logistics operation that, at its peak, employs some 40,000 people to support the iPhone. Over the recent holiday quarter, Apple shipped 74 million iPhones — so many that, if stacked like pancakes, the slender mobile devices would reach the International Space Station, he notes.
“They were built, produced and shipped in 90 days,” Williams said.
Williams chafed at questions about labor conditions at factories in China, saying Apple has a team devoted to ensuring that the people who manufacture the company’s products are treated fairly. When pressed about the spate of suicides at one Foxconn facility in 2010, he and Cook personally investigated.
“We learned it had nothing to do with working conditions,” Williams said, echoing an observation Apple co-founder once made about the suicide rate at Foxconn. “[The factory had a] lower suicide rate at their biggest cluster than any place in the US. By that standard, it’s the happiest place on earth.”
Williams resisted pressure to quantify early sales of the Apple Watch, generically describing demand as “fantastic.”
“Obviously, I can’t give you that number,” Williams said Wednesday at the Code Conference, after Walt Mossberg pressed him to put some numbers next to his adjectives.
Williams confirmed that Apple will release a developer kit that will allow companies to write apps directly for the Apple Watch next week, at the start of the Worldwide Developers Conference on June 8.
“I’m a cyclist who uses Strava, so it will have access to the sensor,” Williams said.
Williams seemed to hint at Apple’s interest in the automotive market in his response to one question about what the company plans to dow with its huge cash hoard.
“The car is the ultimate mobile device,” Williams said, quickly adding. “We’re exploring a lot of different markets.”
Williams said that the deciding factor in choosing new businesses is not the opportunity for revenue growth, but rather “which ones are ones [in which] we think we can make a huge amount of difference.”
One area with growing potential is ResearchKit, software that allows Apple’s iPhone to be used as a tool for medical research. Williams said the technology already is being used to aid the study of Parkinson’s Disease, heart health, breast cancer and asthma.
“Usually it takes a year-plus to see results, we’re seeing (it) in weeks and months,” Williams said.
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Williams continues by saying “We’re exploring a lot of interesting areas.”
Mossberg: You did mention the car as another mobile device, and you’re a mobile device company …
Williams dials it back, talking about CarPlay as Apple’s move for the vehicle.
A self-described “rich” Apple shareholder asks about revenue growth. Without talking about your next amazing product, what industries are you looking at with that giant stack of money?
Williams: The car is the ultimate mobile device, isn’t it? We explore all kinds of categories. We’ll certainly continue to look at those, and evaluate where we can make a huge difference.
And another story is up on Apple’s plans to let developers create apps natively for the Apple Watch.
Another question: Do you see the Apple Watch as a “Trojan horse” for medical transparency, to give people a medical X-ray of their health?
Williams: I don’t want to talk specifically about where the watch is going to go. We view the fact that you wear this, and we have an opportunity, or a moral obligation, to help people live a healthier life.
We have a full story up on Williams’ comments about Apple watch sales.
As bandwidth increases, do you see the need for more capacity and faster processors declining?
Williams: I remember having this discussion with suppliers a few years ago, who noted the rise of cloud computing. I’ve been amazed with people’s ability to do processing on the phones.
Now time for questions from the audience.
Asked to predict what these devices might do down the road, Williams said he didn’t want to “pull an Osborne.” For those that don’t get the reference, Osborne was a computer company that some say accelerated its demise with a poorly timed product reveal.
Mossberg: I’ve been around long enough not to ask someone from Apple to announce a new product before the start of WWDC. Can you give an answer of what a smartphone could do for me to prompt people to buy one?
Williams: Hypothetically, if it could scan your body and do a full tricorder, I think people would buy it (especially “Star Trek fans”).
If the question is will everyone have one, then at some point the answer to that is yes. But if you mean will there be cool tech and people will want to upgrade, that’s where I am emphatic.
Has the smartphone started to mature, level out?
“No way, no way,” Williams said.
Mossberg talks about how so few women are in executive positions, ditto for non-whites.
Williams: It’s an issue for companies, and we’re focused on it.
Mossberg raises the issue of diversity, because of the well-known problem of lack of diversity in the technology industry. Apple is the largest technology company, he notes — how are you doing?
Williams: We’re doing well, but we could do a lot better. We’re continuing to push. We’re focused on diversity on gender and sexual orientation, but also socio-economic background. We have a diverse workforce at Apple, but we need to do better in some categories. It’s a core focus of ours.
The medical stuff being done with Apple Watch is going to be huge. The hard part is true medical stuff requires study and regulatory approval and takes way longer than adding features to track sleep or steps.
But the impact is so much bigger.
Williams said it’s being used by researchers studying heart health, breast cancer survivors, diabetes, asthma. All of these studies usually take a year plus to get meaningful information, he said, but we’re seeing meaningful information in months. Asthma researchers are seeing differences by state — in New York the main trigger is anger.
Switching to ResearchKit.
Williams talks about how ResearchKit uses software to help researchers advance their work combating disease. We’ve already in short order learned some amazing things. He uses the example of the Parkinson’s disease research. It’s not yet a tool for diagnosing the condition, but Apple found that a set of the control group have Parkinson’s but don’t know it.
What about the suicide rates at Foxconn?
Williams: Tim and I traveled to China to investigate. It had nothing to do with working conditions.
Even with the big cluster of suicides, the statistics were a lower suicide rate than any place in the U.S. By those standards, it would be the happiest place on Earth.
What about conditions in China?
Williams:Couldn’t be prouder of the team making sure people who work there are taken care of. We spend a lot of time trying to improve conditions there. We pay more than the average rates in the area.
Williams talks about being head of operations, overseeing 3,000 engineers. In the holiday quarter, Apple shipped 74 million iPhones If you stacked them like pancakes, not only would they be taller than the tallest building, they’d actually reach higher than the International Space Station.
Who’s the competition?
Williams: I don’t spend a lot of time checking out the competition.
When we were developing the watch, we approached it with a lot of deference. Looking at other smartwatches didn’t help. The company started long ago, slowly learning and observing.
Williams says developers will get a preview at Apple’s developer convention, with products out in the fall.
Mossberg: What’s an example of what someone might do, writing natively for the watch?
Williams: If you’re a fitness buff, if you use another app, you’ll have direct access to our sensors. I’m a cyclist who uses Strava, so it will have access to the sensor. You could have a game focused on the watch, as well.
Mossberg: You have another developer kit for the watch. Can you talk about that?
Williams: Third-party apps will get much better when they can release code natively for the watch and have access to native sensors. That will make for better apps.
Mossberg asks, is the iPhone the pocket watch in your analogy?
Williams: I don’t think so.
Williams says there’s great inevitability in technology moving to your body. We chose the wrist very carefully. But I think there’s historical precedent for this. If you look at timekeeping, it started with the clock in a time center, gradually moving to the home, then to the pocket. It was the beginning of the last century when an aviator asked his friend Cartier to make a watch for the wrist.
On final pass, Williams notes that the smartwatch is still a new product category for Apple.
Walt Mossberg still presses, why didn’t you put out a release announcing 1 million sold?
Williams responds, “We spend too much time thinking about the numbers, and we’d rather spend time making great products.”
“I think people love it, and we’re having a blast,” said Williams.
Walt: How many have you sold?
Williams: Demand divided by supply is greater than one. That’s all I’ve got. It’s a lot.
Digging in on the Apple Watch now. Williams begins to break it down. Millennials don’t wear watches. We entered a space where other products aren’t doing well. But Apple Watch is gathering momentum. One mother wrote to Apple, saying the watch allowed her to be “more present” with her children.
Walt: How’s the Apple Watch doing?
Williams: Fantastic.
Walt: By what metric?
Williams: Customers love the Apple Watch. More so than he expected.
Walt begins the inquisition: Why can’t I get holograms on my Apple Watch?
Jeff: We’re working on it.
And he comes out wearing a … oh wait, no one cares what Jeff Williams is wearing. That said, he’s wearing a dark button-down shirt and jeans.
Walt Mossberg says everyone knows some of the most exciting products to come out in the last 15 years came out of Apple. Here’s one of the quiet figures behind some of those products, most recently the Apple Watch. Here is Jeff Williams.
Excited to hear from him. He’s probably the most important Apple executive that no one has heard of. He’s Tim Cook’s Tim Cook, essentially.
Jeff Williams takes the Code stage in about a minute.
CNBC’s Jon Fortt asks about whether there are more opportunities for vertical integration to improve Apple’s competitive advantage?
Williams: I think we’re incredibly vertically integrated. We continue to acquire companies frequently. I know of no other company as vertically integrated in this space. We design our own processing chips. We write our own software.