Jeff Williams, Apple’s senior vice president of operations, has been called “Tim Cook’s Tim Cook” by some.
Williams, who reports to CEO Tim Cook, leads the team of people around the world who manage Apple’s complex supply chain and its global service and support organization. He also managed the development of the Apple Watch, the first new product category the tech giant has entered in five years, and he is driving the company’s health initiatives, including ResearchKit, Apple’s effort to bolster medical and health research.
Late last month, in an onstage interview with Walt Mossberg at our Code conference, Williams talked about watches and wearables, competitors and third-party apps — and those ever-elusive sales numbers.
This interview has been edited and condensed for clarity.
Watch the whole interview here:
The man behind the Apple Watch
Walt Mossberg: Everyone knows that some of the most incredible, exciting products of the last 15 years have come out of Apple. We obviously know who runs Apple, but we don’t always know everyone important at Apple, and we have a super-important, super-interesting person from Apple this morning: Jeff Williams, who is the man behind the Apple Watch, among other things.
Jeff Williams: Thank you!
Mossberg: Thanks for being here.
Williams: Thanks for putting me on after a magician.
Mossberg: What is your first magic trick you’re going to do this morning?
Williams: [Laughs] I’ve got nothing.
Mossberg: How is the Apple Watch doing?
Mossberg: By what metric?
Williams: Really, by the most important one, and that is that customers love the Apple Watch, more so than I ever thought.
Mossberg: You thought they were going to hate it?
Williams: No, I just thought it would …
Mossberg: “Let’s do this product people will hate.”
Williams: [Laughs] No, I thought it was going to take a little bit of time, because millennials don’t use watches, they don’t wear watches. And we entered a space that the products hadn’t been great, and people were saying, “Look, what can I really do on this thing that I can’t do on the phone?” The reality is, the experience is much more subtle than customers are getting. People love the Watch. They love the utility of it. A common refrain is that the Watch is actually liberating. I get emails from a mother who said, admittedly, “I bought the watch because it would be a fashion thing, and I teach my kid every night; I do homework with my kid, and the other day he said, ‘Mom, thanks for paying attention to me and not having your phone on the table,'” and allowed her to be more present. Or an email from a dentist who says …
Mossberg: [Interrupts to look at his Apple Watch] Excuse me, Jeff. There’s a text here …
Williams: Yeah, but that’s way better than, “Excuse me, let me pull the phone out of the …” Because you can quickly dispose of things. I mentioned the dentist who sent an email that said, “I’m actually better now, because when I’m working on a patient and the phone buzzes in my pocket, I don’t have anxiety and my thoughts don’t go there, ’cause I can quickly dismiss things.” I think people love it, and we’re having a blast.
“Demand divided by supply is greater than one.” — Jeff Williams on Apple Watch sales numbers
Mossberg: Okay, so how many have you sold?
Williams: A lot, but not enough.
Mossberg: It’s never enough for you, is it?
Williams: Never enough.
Mossberg: How many have you sold?
Williams: Obviously, I can’t give you that number.
Mossberg: I mean, is it a million?
Williams: The only number I’ll give you is that demand divided by supply is greater than one, and so that’s all I’ve got for you, Walt. It’s a lot.
Mossberg: Why did you not put out one of your classic, traditional releases that says, “We crossed a million preorders in three days,” or whatever the big number would be? You have done this all the time on other products.
Williams: At the very beginning, we decided we weren’t going to release data on the Watch. We release maybe too much data today, and we didn’t want to do that.
Mossberg: Wait, wait, wait. Let’s go back. You’re not secretive enough today; is that your point of view?
Williams: I think we spend too much time thinking about the numbers, and spending time on that, and we’d rather spend time making great products.
Mossberg: Why did you decide not to release any numbers on the Watch?
Williams: The decision was, it’s a new category, we’ll see where it goes over time, and if it reaches the materiality levels, maybe we’ll change that; but that was the decision.
“I think there’s great inevitability in technology moving to your body, and we chose the wrist very carefully.”
Mossberg: Let’s talk about watches, and wearables in general. It’s very early days for you on this product still.
Mossberg: And you have a lot of competitors. Some of them are bringing out new models right now. Actually, I think one of them brought in a new model right about when you were doing yours. Do you think this is going to become a fundamental place for people to interact and communicate and all that kind of stuff? You have your product that you think does that, but do you think this is — like the phone was, or still is — a long-term thing?
Williams: I do. I think there’s great inevitability in technology moving to your body, and we chose the wrist very carefully. But yeah, I think there’s historical precedent for this. I see the usefulness. If you look at timekeeping, it started with the clock in town center. Think of mainframe computers, it moved to the grandfather clock in your home; think of PCs, it moved to portable clocks. Think of laptops, and then it moved to a pocket watch for quite a while. It was the beginning of last century when an aviator from South America asked his friend, Cartier — he was flying his plane all the time and he was tired of reaching in and pulling out his pocket watch, and he said, “I’d like one on the wrist.” I think we’re seeing the beginnings of that.
Mossberg: So, the iPhone is the pocket watch in that analogy?
Williams: Yeah, but I think we’re going to continue to sell a lot of pocket watches in that case. I think there’s a very different experience on the phone.
Mossberg: Okay, but the wristwatch analogy means you think this is going to become as ubiquitous as wristwatches were?
Williams: I do, based on the response we’re getting. I do.
Mossberg: Let’s talk about apps. Right now on the Watch, there are sort of two categories of apps, and more than one way of describing these two categories. One is the ones that are kind of the core built-in apps, like the fitness app and the messaging app and all that kind of stuff. Those are written by you guys, and they’re written specifically for the Watch.
Mossberg: Then there are third-party apps.
Mossberg: Which obviously vary widely. How many are there now?
Williams: Over 4,000.
Mossberg: Over 4,000? In my experience and the experience of others, a lot of them just don’t do a whole lot. They just seem like small adjuncts. This isn’t universal, some of them do more; but a lot of them seem to be just small adjuncts of iPhone apps. I wrote in my review that it just seemed like developers weren’t sure what to do yet, given the tools they had, with this new device, this new foreign factor. You have another SDK coming up for the Watch, right?
Williams: We do.
Mossberg: Can you talk about that, and how it’s different, and what kind of different apps might come out of it?
Williams: I think the third-party apps are going to get much better when developers can write code natively on the Watch. Today, it flows through the phone, as you know, and a week from Monday, at our developers conference, we’ll release a preview so the developers can start writing code natively, have access to sensors and things like that. And I think that will dramatically open up the opportunities for them to make richer apps. We’re really excited about it.
Mossberg: The core apps that you wrote were written in that way, maybe not exactly in that developer’s kit, but they were written for the Watch …
Williams: Well, we took the learnings from our core apps, and have taken that into the frameworks for the developer kit, so that’s exactly what we’ve done.
“I think the competition is really us.”
Mossberg: So give me an example of what somebody might be able to do writing natively for the Watch — these very early days where we’re seeing, somebody has an IOS app, they upgrade it; all of a sudden, you have something on your Watch that does a small fraction of what the iPhone app does.
Williams: If you’re a fitness app — if you don’t want to use ours, if you use another app — you’ll have direct access to the sensors. I cycle on the weekends, and I like Strava, and I think they do some really great stuff, and they’ll have direct access to the sensors. They’ll be able to use the crown to do many different things. Today they don’t really have access to the digital crown. Games? The games today are very, very limited. They run off of the phone, and now you could have a game that’s really focused on the Watch, that runs on the Watch independently. So there’s all kinds of opportunities.
Mossberg: If you’re looking at the early stages of the Watch, there will be a big bump in quality of apps, or there should be, based on the SDK, roughly when? In the fall, or the holidays?
Williams: We’ll do the preview a week from Monday. People will begin to work on it, and then, much like we do with our IOS, a few months later it will be released to the world.
Mossberg: Apps will begin coming out in the fall, really.
Mossberg: Who’s your competition in this Watch — in this wrist space, this watch space?
Williams: I think the competition is really us to continue to work on making this the best experience possible, and we’re really focused on that. I don’t actually spend a lot of time checking other people’s watches …
Mossberg: [Interposing] Really? When you were developing this, you personally didn’t wear any of the Android watches, or the Pebble or any of this stuff?
Williams: I wore them for short periods of time, but lost interest.
Williams: No, that’s not a shot. That really didn’t help us figure out what we wanted to do. When we were developing the Watch, we approached it with a great deal of deference for all the things we didn’t know. It was a real inquisitive thing. I think just looking at existing watches or smartwatches didn’t really help us. We actually started this project well before the words “smartwatch” or “wearables” were floating around. It started long ago, and so it’s been a process of continuing to learn and observe, and it’s been really exciting.
Tim Cook’s Tim Cook
Mossberg: You are the senior vice president of operations. Some people call you “Tim Cook’s Tim Cook.” Does that bug you?
Williams: He’s a fantastic guy. I probably shouldn’t be compared to him. But I do run operations for the company.
Mossberg: What does that mean, just so people understand?
Williams: It’s supply chain, it’s manufacturing; with Apple, it’s a heavy dose of engineering. In my organization, there’s almost 3,000 engineers that are working on trying to figure out how to do the things we do, because we’re usually pushing the envelope on leading-edge technologies. It’s shipping all the products to the customers, so it’s the distribution, logistics, it’s all the service and support. Later this year, peak holiday time, we’ll have 45,000 people answering the phone on behalf of Apple if you’ve got a question; they not only need to do that in a high-quality way, they need to represent Apple well.
So it’s that. It’s the manufacturing. I would say, all of the things that any company that sells products does. What makes it really different at Apple is the scale. It’s kind of hard to appreciate that, but take holiday quarter — we shipped 74 million phones — I don’t think the mind can process numbers above 100 or 1,000. They kind of get lost. I’m not given to sensational analogies, but I’ll give you one, anyway. If you stacked all of the phones — you know how thin they are, an iPhone 6 — if you stacked them like pancakes, not only would they be taller than the tallest building, they would go up a few hundred miles, such that they would be higher than the orbit of the International Space Station.
Mossberg: This is the 74 million?
Williams: This is the 74 million.
Mossberg: That you sold in 90 days?
Williams: In 90 days. Just to put it in context. So, this group pulls together all the technology, produces all of those in a high-quality way, and then gets them to the right customer. That’s what the team does.
Mossberg: Do you ever foresee a time when you won’t be making these 74 million per quarter amazing devices in these kind of not-so-attractive working conditions in factories in China?
Williams: Oh, well, I disagree with the premise.
Mossberg: I’ve been there. It didn’t look like a great place to work.
Williams: I’ve spent a lot of time there, and I couldn’t be prouder of the work the team was doing on making sure that people who work there are treated fairly. And when you say not attractive, maybe they’re not attractive as a building, but there’s some really fantastic operations, and I feel great about the work we’re doing in that space.
Mossberg: Are people getting paid more than they were?
Williams: People are continually getting paid more. Every year, salaries are increasing. We pay more than the average rates in the area, but absolutely.
Mossberg: Suicides, and all of that kind of stuff. What’s the current status of that?
Williams: I think you discussed that onstage several years ago.
Mossberg: I did.
Williams: There haven’t been very many suicides. When the suicides first surfaced — the story of a cluster of suicides at Hon Hai is what you’re referring to — this alarmed us, and Tim [Cook] and I personally went to China and investigated the situation, and we learned a lot. One of the things we learned is, they had nothing to do with working conditions. That’s a common refrain in the press, but it had nothing to do with that, and nobody would ever discuss it. Steve [Jobs] had the courage on this stage to actually mention statistics, because you don’t ever want to talk about statistics …
Mossberg: I remember. I was sitting right here.
Williams: … on human subjects. But the reality is, even in their big cluster of suicides, the statistics were a lower suicide rate than any place in the U.S., at their biggest cluster. So, by that definition, it would be the happiest place on Earth. Now, there’s a lot that we can learn and do better, and Foxconn did some amazing things on employee-help lines. But we investigated each and every suicide, and they were not associated with working conditions.
ResearchKit and personalized medicine
Mossberg: So you’re running worldwide operations.
Mossberg: You’re running the Apple Watch. You were the head of the development for the Apple Watch, right? Still are.
Williams: Still am.
Mossberg: But one of the other things that you do is this ResearchKit program. Can you talk about that?
Williams: I can.
Mossberg: Explain what it is, and then talk about how it’s going.
Williams: In March, we announced ResearchKit. It’s a software framework to transform the way research is done. It uses the phone and mobile apps to solve many of the problems researchers have faced.
Mossberg: This is health research …
Williams: This is medical research, specifically. There’s been tremendous advances in medicine, but the process used for research hasn’t really changed in decades, and hasn’t kept up with technology’s improvements. So we announced five apps that initially would go after various diseases and research, and there are many more coming. And we’ve already, in short order, learned some amazing things. I’ll mention a couple.
Just with the Parkinson’s app. We announced this app that would allow people to do various tests, a walk test, a tap test on the phone to understand the severity of Parkinson’s in response to things. The way it works is, people signed up who have Parkinson’s and they conduct these tests. And they also have a group that signs up — like, I’m a participant who doesn’t have Parkinson’s — as a control group. We’re almost certain that a set of the people who signed up as the control group have Parkinson’s and don’t know it, which was really powerful. Now, I need to put the disclaimer, this is not a diagnostic tool. We don’t have regulatory approval for that, so we don’t want people using it for that yet. But it’s clear that it could go there, so there’s a huge opportunity for the democratization of medicine here, because millions of people are suffering from Parkinson’s, and a large portion of them are undiagnosed, especially in less-developed countries, and they can do so for little cost, with just the phone and an app.
The other observation is really centered around personalized medicine. When we look at individuals’ profiles, one of the things you do is, you record when you take your medicine, and you do these tests two or three times a day. And you’ll see a case where someone is taking the medicine, and the severity of their symptoms changes. The medicine’s working. It’s really powerful. You see it every single day.
You’ll see another person where they’re taking medication and they’re getting no help from the medication. There’s plenty of good reasons not to take the medication if it’s not helping you; but one of the issues with neurodegenerative disease is people self-medicate. They’re trying to figure out what’s working; they double-dose, “I’ll take two pills.” And when they go see the doctor every six months, they don’t have any data. So this is really powerful stuff. If all we got out of ResearchKit were these two learnings on this app, it would have been worth it. But we’re just beginning.
Mossberg: The other ones cover what diseases?
Williams: We have heart health, we have breast cancer. This is geared toward people who have survived breast cancer, but one of the challenges is, chemo has some impact on quality of life after; it’s geared toward that. We have one on diabetes, and we have one on asthma, as well. All of these studies usually take a year-plus historically to get any meaningful information, and we’re seeing results in weeks or months. The asthma study looks at triggers; it helps people manage their asthma, and it looks at triggers around the nation. Exercise-induced asthma is one of the things that prompts asthma. The researchers are already seeing differences by state. In Texas, extreme heat precipitates asthma, not surprisingly. In New York, the No. 1 trigger of asthma is anger …
Williams: No kidding. No kidding from the results. No one would have known that, and the way medical research has historically been done, it’s been centered around the institution doing it, because someone would have to go sign up with a study coordinator, and if Stanford’s doing it, learn a little bit about the Bay Area around Stanford. Here, all Mt. Sinai did was write an app, release it using ResearchKit, and they’re getting data across the country. So it’s really, really powerful.
“Diversity is a core focus of ours.”
Mossberg: One of the things we’re doing at our conference this year with all the speakers is asking about diversity, because of the well-known problems of diversity in the technology industry. You are the biggest technology company by several metrics …
Mossberg: How are you doing on diversity in your workforce?
Williams: We’re doing well, but we can do a lot better, and we’re continuing to push on. Look, we’re focused on diversity, not only on gender and sexual orientation; we also are very interested in diversity on thought, where people come from — we view it very broadly. In my organization, over the past three years of the core vice presidents that worked for me, about half of them are female. We have a diverse workforce at Apple, but we need to do better in some categories, and we’re actively trying to do that. It’s a core focus of ours.
Mossberg: Why do you think this has become viewed as a particular problem in the technology business, which is in many other ways quite forward-looking, and you think of it as the cutting-edge of the economy. And yet, there’s so few women in senior positions, people of color, gay employees … What’s the problem in tech?
Williams: I think for some of the categories you mentioned, of people, I think the feeder system really needs to be improved — how many people go into the sciences and math from various groups. That’s part of it, and I think part of it is a focus issue for companies, and we’re focused on it.
“Hypothetical: If it could scan your body and do a full tricorder, I think people would buy it.”
Mossberg: Has the smartphone begun to mature, plateau out?
Williams: No way. No way.
Mossberg: It seems like everyone has one in the developed world, and in the emerging markets, it’s very stratified. People who happen to be in the wealthier part of those countries, even if the overall country is poor, are getting a lot of smartphones. And at some point, it becomes like, “I already have one” or “I’m not going to buy one every year.” When you say, “no way,” you’re pretty emphatic.
Williams: If you look at all the opportunities for the future, on where technology can go and how much better … If the question is, will everybody have one — an investor definition of tapped out — then at some point, the answer to that is yes. But on the question, will people buy new ones because the technology’s better, that’s where I’m emphatic that we’re not tapped out.
Mossberg: I’ve been around long enough not to ask somebody from Apple to announce a new product, though I’d be delighted if you’d like to before your WWDC a week from Monday. But can you give me a hypothetical example, whether it’s — let’s say it doesn’t even refer to the iPhone, just a smartphone or the smartphone category. What could a smartphone do for me that would make people go out and buy another one?
Williams: All the items that come to mind, or all the thoughts that come to mind are — I’d pull an Osborne if I mentioned them here onstage. Hypothetical, if it could scan your body and do a full tricorder, I think people would buy it. How about that?
Williams: That’s what I’ve got.
Mossberg: Have you purchased the rights to the name “tricorder” from Paramount Pictures? [Laughter]
Williams: No, I haven’t.
Mossberg: That’d be a good one. You already do a little bit of that with this, right? (Gestures to his Apple Watch) This has a heart sensor …
Williams: We do. It’s got a heart sensor and it’s got activity tracking, which I actually think is the most significant health thing we can do. I’m convinced, if doctors could write one prescription, it would be activity and “move more,” and not just linked to weight loss or your heart, studies are showing it’s tied to all kinds of diseases.
Mossberg: Every day, I want to close those [Apple Watch activity goal] rings.
Williams: Good! Good, that’s the goal.
Mossberg: And I’m not what you would call an athlete.
Williams: Yeah, we probably need to stand in a few minutes here.
Mossberg: Yeah, that’s a good thing. Can you fix that thing, where everyone stands at the same second?
Williams: We love that. What’s wrong with that? It’s kind of a salute.
Mossberg: It’s a little disruptive in a conference, you know what I mean?
Williams: Oh, c’mon. It’s really nice…
Mossberg: People are sitting here listening to us, and 10 minutes before the hour, the thing is going to tell [every Apple Watch wearer to stand up].
Williams: You get the little “You did it!” when you’re done, to make you feel good. Doesn’t it?
“We view the fact that you wear this — we have an opportunity, and maybe even a moral obligation to try to help people live a healthier life.”
Mossberg: Okay. Questions for Mr. Williams? Nobody has any interest in Apple, I know.
Question: We’re kicking around the idea that, as bandwidth continues to increase, the need for data — sorry, the need for gigabytes and for processing power on the phone — could actually decline over time. You’ve been differentiating, as have many others, on more capacity, faster processors. Do you see, to Walt’s point, on the future of the phone, the paradigm starting to change as broadband becomes more ubiquitous to customers, and the features of the phone start to differentiate in a new way?
Williams: I remember having this discussion with the NAND suppliers three or four years ago, and saying the cloud’s going to change it; we’re never going to need more than eight gigabytes in the future when you’re planning your capacity. And I’ve been amazed at people’s ability to use things on the phone for processing and what goes with that. I’m not sure where it’s going, but I don’t see the phones becoming “dumb” in all the activity beyond that.
Question: Since the Apple Watch currently has some health-related monitoring systems — I recently had a family member have a heart episode and monitored their heart episode live on the Watch, using the Glance. One thing, it provided us with a chart of data that we could then give to a health-care professional and evaluate it.
Male Voice:Yeah, yeah, really.
Male Voice: Up to like, 200 beats per minute. It was pretty serious. So we were able to track it and see it come back down, and then determine, “Okay, well, we don’t need to go to the doctor now; we can go later.” It was indicative to me of, like, kind of a transparency into our body functions that we didn’t have before. Do you see the Apple Watch as sort of a Trojan horse for this kind of medical transparency? That you are able to then, over time, give people this sort of X-ray, or is it more along the lines of, as you mentioned, this sort of just basic health thing where it’s like, “Hey, get active, stand up,” all that stuff?
Williams: I don’t want to talk specifically about where the Watch is going to go. We have a great interest in helping people. We view the fact that you wear this, we have an opportunity, and maybe even a moral obligation to try to help people live a healthier life. So, to the extent that means that we can add sensors over time that do even more to understand the human body, we’ll be excited about that. Great question, thanks.
“The car is the ultimate mobile device, isn’t it?”
Question: I’ve been an Apple shareholder since 1997, so …
Williams: Thank you.
Mossberg: So you’re rich.
Williams: Thank you.
Question: I am.
Mossberg: Is that your point? Want to brag? He’s just bragging. [Audience laughter]
My question is about revenue growth at Apple. Clearly, I think it’s about 65 percent of the revenue is coming from iPhone right now; that’s not unlike what was going on with iPod back in the day. My concern is that the Watch may not be the next $10 billion, $20 billion industry, and you guys have been buying back shares instead of acquiring companies. Without talking about your next amazing product that’s going to come out maybe this fall, could you talk about industries that Apple is at least looking at with your giant stack of money? [Audience laughter]
Mossberg: I know the answer to that, but go ahead.
Williams: What’s the answer? [Audience laughter]. Maybe you can answer for me.
Mossberg: No, I know what you’re going to answer. That’s what I meant.
Question: Television, video games, whatever; just something — cars. Are you guys going to do something with the $100 billion, or are you just going to keep buying back shares? [Audience laughter]
Williams: Well, the car is the ultimate mobile device, isn’t it? [Audience laughter] Look, we explore all kinds of categories, and we’ll certainly continue to look at those and figure out which ones are ones where we think we can make a huge difference. We don’t spend time worrying about the revenue growth. We don’t don’t pursue things to say, “Yep, we’ve got to deliver another X percent for the analysts …” I mean, we do have a responsibility to shareholders and we’re very cognizant of that, but we just focus on making products that we’re excited about and let the chips fall where they may. We’re exploring a lot of interesting areas, but I don’t really have any comments today on that. Thank you. [Audience laughter]
Mossberg: You did say something interesting. You did say the car is the ultimate mobile device.
Williams: Well, I have an interest in seeing … [General Motors CEO] Mary [Barra] is up next. We’ll see what she says.
Mossberg: You’re a mobile device company, right?
Williams: We’re a mobile device company, and that’s why we have CarPlay, to really help with that mobile device.
Mossberg: [Laughter] Okay, yeah?
Well, the car is the ultimate mobile device, isn’t it?
Question: Hi, Jonathan Kaplan (founder of The Melt grilled-cheese sandwich startup). If I was to stack all my grilled cheese sandwiches, they would barely make it to the top of the Empire State Building.
But that’s okay. My question is more around America and making America great, and I’m just curious about how the management team at Apple thinks about your responsibility for cutting-edge research and how that research can help us develop technologies that will advance us over other countries in the world. And since that’s become more of a responsibility of companies versus the government, I just wonder if that comes up at all in any of your leadership team meetings versus “how do I make the next great product?”
Williams: Well, it does from the standpoint of we’re based here in the U.S., and we’re growing our engineering strength in the U.S., as well as other places. We do a lot of business. There’s this perception that all of the manufacturing is in China, because that’s where the final assembly’s done, but we work with over 8,000 suppliers in the United States, and few people know that. We spend billions of dollars here developing technology, and we are very, very proud of the work we do in the U.S., and want to see it grow. I appreciate your interest. Thank you.
Mossberg: I’m sorry, but we only have one more question.
Question: My question is about vertical integration. It strikes me that the P.A. Semi acquisition from years back was really key to the development of the iPhone and iPad with the A-X processors. Do you see more opportunities for vertical integration to improve your competitive advantage, do things in the supply chain along those lines, or have you sort of moved on from that?
Williams: Oh, no. I think we’re incredibly vertically integrated. We continue to acquire companies frequently, and I know of no other company as vertically integrated. We design our own processor chips. We design every piece of what we do; even something that is a seemingly standard part on our products is something that … like, the screen for this Watch is something where our engineers worked closely and developed the processes to do that. We write our own software. I know of no other company more vertically integrated in this space, and we continue to acquire. So it is absolutely part of our strategy.
Mossberg: Okay. Jeff Williams, thank you!
Williams: Thank you.
This article originally appeared on Recode.net.