4 Key Takeaways From Tim Cook at the Goldman Sachs Tech Conference

By Markets Fool.com

Goldman Sachs has been hosting a technology conference the past week, and AppleCEO Tim Cook personally spoke at the event to give insight into his strategic thinking on a wide range of topics. Here are four key takeaways from the conference.

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Tim Cook does not believe in the law of large numbers
The moderator points out that Apple appears to be "fairly undeterred by the law of large numbers." As it turns out, Tim Cook simply does not believe in such a thing.

We're fortunate to have had a good year, and -- but maybe the most important answer to that, first, would be that we don't believe in laws such as the law of large numbers. This is sort of old dogma I think that was cooked up by somebody. And Steve did a lot of things for us for many years. But, one of the things he ingrained in us that putting limits on your thinking are never good.

And so, we're actually not focused on the numbers. We're focused on the things that produce the numbers, right? And so, if you look at accomplishments over last year, we're a product company. And our most important thing is to make great products. And we feel great about how we did last year. We came out with iOS 8, was absolutely our largest release since the App Store was created.

As it pertains to finance, the law of large numbers suggests that companies should struggle to maintain growth rates as their revenue bases expand. After all, growing 20% off a $10 billion revenue base is relatively easier than doing so off a $200 billion revenue base.

With Apple now at $200 billion in trailing 12-month revenue, growth rates should be harder to maintain, particularly when you consider the scale at which Apple must execute operationally. Yet, the Mac maker continues to astound investors with its performance, like the 30% top-line growth it enjoyed last quarter.

So long as Apple continues to launch great products, Cook believes the numbers will take care of themselves. So far, they have.

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Retailers are clamoring to get in on Apple Pay
Apple Pay has surpassed even his own expectations for the new mobile payment service. The chief executive had even expected the holidays to be slow for Apple Pay, because retailers tend to be averse to changing their point-of-sale systems at such a critical time. Apple Pay already accounts for two-thirds of contactless payments processed through the three dominant networks (American Express, Visa, and MasterCard).

Most importantly, retailers cannot wait to get their hands on Apple Pay.

But, maybe what's even more significant than that is that there's so many retailers that are approaching us about getting signed up. We had the bank piece at a very great level. We have 2,000 banks and credit units now going, and more coming, although that's well over 90% of the market. And so, the focus in the United States is very much on merchants.

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And so, the rollout is going much faster than I would've thought. And I think it's truly profound. There are also some retailers that are taking it even further where they're innovating around their own customer experience.

Cook mentions some notable examples, such as JetBlue, which plans on allowing flyers to use Apple Pay to purchase in-flight food and entertainment. This is an important distinction between Apple Pay and its incumbent rivals. For the most part, retailers were not this proactive in integrating other contactless payment solutions such as Google Wallet or theeBayPayPal app.

Privacy will only become more important
Cook took a hard stance on privacy last year, directly taking jabs at Google while inadvertently poking at Facebook at the same time. Privacy remains an important issue, and it could have some important implications going forward for companies whose businesses rely on users compromising on their own privacy.

Apple Pay emphasizes user privacy regarding transaction data, but Apple takes its respect for privacy even further.

I think this is the same way, back to the HealthKit that we talked about earlier, you're going to want to keep your own health information. This is not something you want to be monetized by somebody.

And so, we think that customers over the arc of time will more and more go to people they trust with their data because the -- it's not just sharing one thing that's going on now. It's the people unknowingly sharing a number of things in their lives and where somebody can now connect those dots and find out 10 things about them that they really didn't want anybody to know, that nobody deserved to know.

And so, I do think, over time, more and more people will appreciate that and not only just appreciate it but demand it.

With the upcoming onslaught of wearable devices, including Apple Watch, that will collect and aggregate health data, privacy considerations become even more potent.

He blocks out the noise
You do not become the CEO of the largest publicly traded company on Earth without attracting some attention -- and unsolicited advice. There is no shortage of opinion on things Apple should do, should not do, or could have done better, including right here on the Motley Fool. Responding to criticism about how Apple has addressed emerging markets due to its premium pricing strategy, Cook ignores the skeptics.

And we've found that, all throughout the world, there were so many people advising us that we had to do something different in China, that we had to do something different in this country or that country, that people weren't going to pay for a great product there.

Well, let me tell you, it's a bunch of bull. It's not true. People everywhere in this world want a great product. And that doesn't mean that everyone, every single person in the world can afford one yet, but everyone wants one. And so, if we are -- if we do our jobs right and keep making great products, I think there's a pretty good business there for us.

And so, we've stayed true to that and sort of blocked out the noise of everybody saying: You've got to do this. You've got to do that. We're pretty good at blocking the noise out.

These days, everyone is a critic. Considering how well Apple has done since Cook became CEO nearly four years ago, both in terms of share price performance and business fundamentals, investors should trust Cook by now.

The article 4 Key Takeaways From Tim Cook at the Goldman Sachs Tech Conference originally appeared on Fool.com.

Evan Niu, CFA, owns shares of Apple and Facebook. The Motley Fool recommends American Express, Apple, eBay, Facebook, Goldman Sachs, Google (A shares), Google (C shares), and MasterCard. The Motley Fool owns shares of Apple, eBay, Facebook, Google (A shares), Google (C shares), and MasterCard. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believeconsidering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.