Apple CEO Cook: We're working on secret products 'that haven't been rumored'

Apple (NASDAQ: AAPL) ramped up its R&D spending over the past few years, and a number of products the company is working on are so secret they have not even generated whispers and gossip among the public, according to CEO Tim Cook.

Tim Cook Apple CEO


"There are products that we're working on that no one knows about--yes--that haven't been rumored about," Cook told broadcaster Charlie Rose in the first half of a two-part interview. The second half is due to air on PBS on Sept. 15.

Cook acknowledged that a good portion of Apple's R&D goes to products that are not yet shipping and some of which may never see the light of day as the company reassesses them. "There are always things we're looking at that are drawing R&D expense where there's not associated revenue," Cook said.

Apple's R&D costs for the second quarter of 2014 surpassed $1.6 billion.

In addition, outsiders often do not appreciate the full scope of the products that Apple introduces, Cook said. When Apple introduced the Touch ID fingerprint identity sensor last year, many thought it was simply for unlocking a user's phone or authorizing purchases from the iTunes Store, App Store and iBooks Store. But Apple insiders knew all along that Touch ID would be key to a much broader payments solution, which was introduced last week as Apple Pay. The unveiling was made along with the introduction of the new iPhone 6, iPhone 6 Plus and Apple Watch.

Some Apple products, however, may simply be delayed while resources are focused elsewhere. He noted R&D on the iPad began years before its January 2010 unveiling. In fact, the iPad was shelved for quite a while in order to let the development team create the first iPhone instead.

Cook also revealed that Apple had worked on the Apple Watch for a full three years before its introduction this month.

According to Cook, Apple is full of ideas for new gadgets and related products, many of which get discarded so the company can maintain its focus on a slim portfolio of high-quality products. "The hardest decisions we make are all of the things not to work on," he said.

The Apple CEO also acknowledged that Apple has "great interest" in creating some sort of TV offering. He described the current TV viewing experience has making viewers feel stuck in the 1970s as they try to use a device that has a poor user interface and does not let users select when to watch particular show. He added that watching TV is akin to "entering a time capsule" and "going backwards." Cook said Apple TV, the company's online video streaming device, currently has 20 some million users.

Cook summed up Apple's approach to dabbling with new products, not all of which make it to market, by noting: "A lot of what leads to innovation is curiosity."

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