FULL INTERVIEW: Apple Exec on How Apple Builds Products That Actually Win

This is our full interview with Eddy Cue, recorded live on TBPN. We discuss his early years at Apple, his admiration for Steve Jobs' innovation, and the challenges of launching the original Apple online store amidst concerns from traditional retail channels. Sign up for TBPN’s daily newsletter at TBPN.com TBPN.com is made possible by: Ramp - https://Ramp.com https://ramp.com/ AppLovin - https://axon.ai https://axon.ai/ Cisco - https://www.cisco.com https://www.cisco.com/ Cognition - https://cognition.ai https://cognition.ai/ Console - https://console.com https://console.com/ CrowdStrike - https://crowdstrike.com https://crowdstrike.com/ ElevenLabs - https://elevenlabs.io https://elevenlabs.io/ Figma - https://figma.com https://figma.com/ Fin - https://fin.ai https://fin.ai/ Gemini - https://gemini.google.com https://gemini.google.com/ Graphite - https://graphite.com https://graphite.com/ Gusto - https://gusto.com/tbpn Kalshi - https://kalshi.com https://kalshi.com/ Labelbox - https://labelbox.com https://labelbox.com/ Lambda - https://lambda.ai Linear - https://linear.app https://linear.app/ MongoDB - https://mongodb.com https://mongodb.com/ NYSE - https://nyse.com https://nyse.com/ Okta - https://www.okta.com https://www.okta.com/ Phantom - https://phantom.com/cash Plaid - https://plaid.com https://plaid.com/ Public - https://public.com https://public.com/ Railway - https://railway.com https://railway.com/ Restream - https://restream.io https://restream.io/ Sentry - https://sentry.io https://sentry.io/ Shopify - https://shopify.com/tbpn Turbopuffer - https://turbopuffer.com https://turbopuffer.com/ Vanta - https://vanta.com https://vanta.com/ Vibe - https://vibe.co Follow TBPN: https://TBPN.com https://x.com/tbpn https://open.spotify.com/show/2L6WMqY3GUPCGBD0dX6p00?si=674252d53acf4231 https://podcasts.apple.com/us/podcast/technology-brothers/id1772360235 https://www.youtube.com/@TBPNLive

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00John Coogan?

  Well, without further ado, we have Eddie Q in the restream later, and let's bring him in.

• 0:04Speaker 01

  Into the air.

• 0:04John Coogan?

  To the TVP in El Seguro. Eddie, how are you doing?

• 0:06Speaker 01

  What's going on? It's great, finally, to be here.

• 0:09John Coogan?

  Thank you so much.

• 0:10Speaker 01

  I've wanted to be on this show, and I gotta tell you, I have gotten more text messages from friends about being on here, including my kids, than probably anything I've ever done. So it's great for you to have me.

• 0:21John Coogan?

  That's amazing. And what a special moment, what an amazing time. I would love to just start with some reflection. I want to hear particularly about your first decade at Apple. What was that like, leading, you know, what led you to the company? What were some of the first projects you worked on? Sort of take us through some of the early history.

• 0:46Speaker 01

  Yeah, I was lucky. I was a junior in high school when the Apple II was out, and I wanted to be an architect. And when I discovered a computer, I realized I wanted to be a programmer and engineer. And I said, there's two things I want to do. I want to work at Apple, and I want to meet Steve Jobs.

• 1:03John Coogan?

  Wow.

• 1:04Speaker 01

  And dreams come true. Here I am 38 years later at Apple. I came in as a programmer and was working on HyperCard and sort of the precursor to Blue Links with lines underneath, linking. And I've been done so many things here at Apple. I've had an amazing team and continue to have. I'm working with the best people in the world at what they do.

• 1:28John Coogan?

  Yeah. What was the lore of Steve Jobs like when you first sort of heard about him? Because, you know, my generation knows like the iPhone keynote. There's videos online. There's interviews. There's whole books. There's multiple books written. But what was your experience learning? What drew you to Steve early on in your career?

• 1:48Speaker 01

  I just think it's the innovation of creating these products that let people do amazing things. And I felt that way when I was using the product. The attention to detail of those products, there was a connection that you could just feel. And so it was more than just what you could see. And then it let me do things that I couldn't imagine doing before. And I think that's something that we've continued over our 50 years.

• 2:19John Coogan?

  Yeah. Can you talk about the launch of the of the original Apple online store? I feel like a lot of people assume that this always existed. No, it was a Herculean effort, I'm sure. What was the inspiration? What was the backdrop there? What was the mood like as you entered into that market?

• 2:39Speaker 01

  Yeah, it was a crazy time because people forget. But in those times, we sold all of our computers through channels like CompUSA and local computer stores. And the idea of building an online store and selling direct, there were a lot of people inside of Apple even that felt like if we did that, the channel is going to walk on us and they're going to stop selling. And Steve and we wanted to move forward and be able to do custom configurations so people could order exactly what they wanted. And we thought it was something that customers, you know, it was just beginning, but it was something that customers really wanted. And Steve and I and a small team worked on it and built it

• 3:21Speaker 01

  and launched it at the same time that one of our, you know, best products we've ever done was the iMac. The Bondi Blue one with the clear. And so we launched the store and the Bondi Blue iMac at the same time. And I remember at the end of the day, we were wondering, you know, Steve, I came by his office and he's like, well, how did we do on the first day? And we had sold a million dollars worth of iMacs and we were high fiving each other and going, this is amazing.

• 3:49John Coogan?

  How do you drive people to the, did you just have apple.com? Were people already typing in apple.com? Like, how do you tell people that a website is launching before you can go viral on social media or do live interviews on, you know? How do you promote this?

• 4:04Speaker 01

  Yeah, we were lucky and then we had apple.com already. And so some people were coming from that. And so it was, that part was a little bit easier. And in those days, you relied a lot on press interviews and print.

• 4:16John Coogan?

  Sure.

• 4:16Speaker 01

  And so we did a lot of, you know, you'd want to be on the cover of, you know, a magazine and the front page of the newspaper. And so we had all of that pretty well. And I think our design, when we did this, it was called Good, Better, Best. You could buy different configs and change them. But our design for shopping. For a computer and a Mac at that time was something no one had ever seen. It was, it had all of the things that we cared about. The simplicity, really easy to check out, easy to buy, all of the, the, the specs and the questions you would have, things that were difficult when you went to other sites. I thought we did a great job and, and, and it really resonated with customers.

• 4:57John Coogan?

  Yeah, can you, can you help me understand, like, the services division of Apple is, is massive, it's a huge growth engine, there's so many interesting pieces of that, I want to go into a lot of those, but when was the first time in your career that you realized that there was something that you could sell or, or actually turn into a business line that was not a physical product and would live in this services category? When did services even become like a division or a concept or an opportunity at Apple?

• 5:29Speaker 01

  Yeah, I think we started as a hobby. You know, there wasn't a lot there. It was very early days of, of the internet and doing things like email and things like storage in the cloud, but it was very, very early. The, the thing that was a big change for us was really music.

• 5:46John Coogan?

  Yeah.

• 5:47Speaker 01

  And it was iPod plus iTunes. And that was something that was, it truly revolutionized music and it really gave us a whole different perspective of what services can do when you take the hardware product, in a sense, the operating system and the software and the services and you tie them together, which is something I think we do better than anyone.

• 6:09John Coogan?

  Yeah.

• 6:10Speaker 01

  It really showcased when we did iPod plus iTunes. And so, all of a sudden, we did that, not only did we do it for the Mac, but we also did it for Windows.

• 6:20John Coogan?

  Yeah.

• 6:21Speaker 01

  And so it opened Apple to a whole new ecosystem of customers that had never used our products before.

• 6:26John Coogan?

  Yeah.

• 6:27Speaker 01

  But were using iTunes and iPod for the first time.

• 6:29John Coogan?

  That was my first Apple experience, was iTunes and iPod on, on a Windows PC.

• 6:33Speaker 01

  There you go.

• 6:34John Coogan?

  Yeah. And now I have 25.

• 6:36Jordi Hays?

  My, my first is I was so, I was so loyal to Apple product that I refused to get a game, like a PC for gaming. And so I worked, I probably reffed like 300 soccer games, like some absurd amount to get the maxed out MacBook Pro at the time.

• 6:53John Coogan?

  That's amazing.

• 6:53Jordi Hays?

  Because I was just so, so loyal and I was like, I'm not, I've got to, if I'm

• 6:57John Coogan?

  You've got to stay in the ecosystem.

• 6:58Jordi Hays?

  Play video games, I'm going to do it on, on, on Mac.

• 7:00John Coogan?

  Yeah, it's great.

• 7:01Speaker 01

  You know, when we launched, when we launched iTunes on Windows, I remember we did a poster and Steve called it on the presentation. It was like hell froze over.

• 7:11John Coogan?

  What was actually getting iTunes off the ground like? And how was it different than the other just motions that Apple had developed? Because it's not only a software product, but it's deeply linked to rights holders and agencies and musicians. And you have to get so many different groups. It's, it feels much more permissioned than just building a computer and selling it. Of course, you need manufacturers and you need a lot of people on board to build a computer. But it's a very different go to market or building motion. Like, how is that different?

• 7:47Speaker 01

  Yeah, it was painful because I think there were three, three pieces. You had us, you had the label and you had the artist.

• 7:54John Coogan?

  Yeah.

• 7:56Speaker 01

  We were really good with artists. So, which is something we've always been about, the creators. And I think when we look, when you look at all the things that we've done, the two primary people that we focus on and think about are people that are the end customers that are using it and the creators that are creating all these incredible products. So we had a good relationship with musicians at the time, but we really didn't have any relationship with labels. And ultimately, they did control the environment. And at the time, they had a different perspective. You know, it was really the beginning of Napster and piracy.

• 8:29John Coogan?

  Yeah.

• 8:30Speaker 01

  And instead of thinking about, you know, how to move forward into a future, their view was to lock things down and really stop it. And as you know, when you have something that's better like that, there is no stopping it. And so we went to the labels and we had this idea of selling songs at 99 cents. And they kind of told us to go pound sand. They weren't really interested in us at all. And their idea was they were going to build some music services. So there were five or six major labels and they built two music services. And we told them like, What you guys are doing is not gonna work. They had different pricing for each song. They had different rules. Sometimes you could buy-

• 9:09Jordi Hays?

  So they would like price a hit higher than like some random song on an album?

• 9:13Speaker 01

  Yeah, I mean, it was all over the map. Yeah.

• 9:16Jordi Hays?

  And part of the pushback against like just ninety-nine dollars a song-

• 9:20Speaker 01

  Ninety-nine cents.

• 9:21Jordi Hays?

  Ninety-nine cents, I mean, is like, you know, typical Apple style. It's just like, let's just make it simple, easy to understand. But was their pushback like kind of concern that people, you know, hey, we're used to getting people to just buy an entire album? And maybe what's gonna happen if people just buy, you know, a song here or there? Like-

• 9:42Speaker 01

  Yeah, the problem was whether you sold it at a dollar twenty-nine or seventy-nine cents, that wasn't gonna change that. The key to it, there were two keys to ninety-nine cents that we really believed in and people didn't see. There were two, two primary things. Number one is, at night, when the price is ninety-nine cents and it's consistent, you never have to think about price. And so you would preview a song, decide whether you like it or not, and if you did, you bought. And so there was never any transaction, a billing transaction, that you had to think about. Because you knew it was ninety-nine cents, it's not a lot of money at the time, and, and it was really easy to do. The second thing was that people could never do that because at ninety-nine cents, if you're charging a credit card, you would lose money.

• 10:28Speaker 01

  Because credit cards have a fixed fee and they have a percentage that you pay. Well, the fixed fee and the percentage on a ninety-nine cent song was like a quarter. Yeah. And the vast majority of the money went to the labels. So every time we'd sell a song, we would lose money. And so, nobody wanted to do that, and, and so no other service did that. What we decided to do is, as we were building this, and I remember it was a huge discussion because we would lose a ton of money, obviously, if you're losing on every song. We said, "Look, this thing is amazing. You're not gonna buy just one song. You're gonna buy a lot of songs when you go on there." Yeah. And when you do that, instead of closing the transaction on every single one,

• 11:08Speaker 01

  why don't we just combine them over a period of time? So let's keep the, you know, let's keep the transaction open for a period of time. Let's call it twenty-four hours or eight hours. And everything you buy, we're just gonna give you, and then we're gonna charge you at the end. And so therefore, that's exactly what happened. Very few transactions were just ninety-nine cents. Most of the transactions were multiple dollars, and the fixed fee didn't matter.

• 11:32John Coogan?

  Interesting. How important was it to position iTunes as sort of a step up from the status quo from like the Napster era and a positive? Because I feel like anytime the economics of an industry change, there's natural uncertainty from artists. And iTunes did represent a change in the economic structure, but it was such a great countervailing force. How, what were discussions like at that time about positioning the economic opportunity that artists would have in the new regime?

• 12:09Speaker 01

  Yeah, I think we wanted, during that time, the music business was cratering.

• 12:14John Coogan?

  Okay.

• 12:14Speaker 01

  From an economic point of view.

• 12:16John Coogan?

  Yeah.

• 12:16Speaker 01

  And our feeling has always been, the vast majority of people want to do the right thing.

• 12:22John Coogan?

  Yeah.

• 12:23Speaker 01

  And they want to pay artists.

• 12:24John Coogan?

  Yeah.

• 12:24Speaker 01

  And so, but what they don't want is they don't want to be forced into something that doesn't make any sense, or isn't really friendly, or isn't the right way to do it. And so, we were, that's part of the 99 cents. It was part of like, you can, in those times, you were burning a lot of CDs. They had limitations on the number of burns. We didn't want any limitations because that's not something a customer would understand. And so, our feeling around this was if you let us do this, you're going to grow again, as opposed to cratering. And I remember Steve asked me once, before we had launched, he says, "Well, you know, what is success around this?" And I said, "You know, honestly, I don't know. You know, I'll go ask."

• 13:07Speaker 01

  And so, I went into Universal Music and I asked them, you know, "What's success for you guys in this business?" And they said, "Well, if you could sell, you know, a million songs in a month, anytime in the first six months, that's success for us." So, I came back, I said, "Okay, that's the goal then." We sold a million songs in the first six days.

• 13:29John Coogan?

  That's amazing. I love it.

• 13:32Speaker 01

  And so...

• 13:33John Coogan?

  That's great.

• 13:35Speaker 01

  Yeah, so it's like that. That's what we, you know, obviously it surpassed even our expectation, but it was an example of if you give people the right way, people are willing to pay, but it has to, it has to be done well.

• 13:48John Coogan?

  So, so talk about the, the shift to subscription because it feels like a much more natural experience for all the Apple service that I subscribe to. What was the thinking? How long, like, what were the hurdles along the way to get to the, the, the, the, the current situation with Apple TV Plus where you can, you know, consume everything? Was this just a market dynamic? Was it something that you saw in the future early on and it was more of how do we get there smoothly? What was the process?

• 14:19Speaker 01

  Yeah, the key, the key to this is it's, it's hard to remember this now because we're so used to it, but it's having internet connectivity anywhere you are.

• 14:29John Coogan?

  Sure.

• 14:30Speaker 01

  And all the time and, and, and pretty much almost, it's, it's almost impossible now to be anywhere and not have, you know, actually fast internet.

• 14:39John Coogan?

  Yeah.

• 14:40Speaker 01

  And so that allowed a whole different thing because before that you didn't have, one, you either didn't have it or two, you were paying by usage in a sense. So you wanted to limit the amount that you actually used. And so things like downloading and, and, and keeping things on device all the time was really important. When you have unlimited in a sense, internet access or a network access, then you can provide all these capabilities and not have to worry about whether you have it downloaded or not. It's now invisible to you. You don't even think about it. Most of the time we, we put things on device just to cash them or whatever, but we don't, you don't need to worry about whether it's on your device or not.

• 15:18John Coogan?

  Yeah. We, we have a question from the chat. It's a bit random, but I'd love to know your, your favorite keynote moment throughout your career.

• 15:29Speaker 01

  That's great. I'll say, look, there are two. There's a personal one, which was the first one when we launched the iMac and the Apple Store, because that was the beginning of turning Apple around. And it was a big moment for Apple. We were, it's hard for people to imagine this, but Apple was going bankrupt at that time. And Steve came back, and that moment was the beginning of a change where you, at least we knew now that we weren't going to go bankrupt. And so it really gave us life. And so it was an incredible moment. And I remember going backstage with Steve after it was done and, and, and hugging, actually, because it had

• 16:09Speaker 01

  gone so well, and we knew that was a big step. The second one, and honestly, now in hindsight, I was, I completely underestimated it, was the iPhone launch. It's the only time I made my wife and my kids, my two kids, come to the event. They were eight, eight years old. And I was like, this is a historic moment, because I had had the ability of using the iPhone for a few months before we launched and played with it. And, and it was just amazing to, it's, it's the coolest, best thing I had ever seen in the world. And so I thought, ah, this is going to be amazing. Now, I completely underestimated it, because now you look at it and go, it's like, I don't even know what the world is like. What would

• 16:54Speaker 01

  we, what would you do without an iPhone?

• 16:56John Coogan?

  Yeah.

• 16:56Jordi Hays?

  What, what lessons from Steve, or kind of memories, do you find yourself coming back to, to the most in, in, in the present day of Apple?

• 17:09Speaker 01

  Well, I think something that, you know, people take for granted, but nobody worked harder than Steve. Um, you know, and these things don't come easy, and he was the hardest worker of anybody I know.

• 17:20John Coogan?

  How did that manifest? Like, long hours? Just deep focus?

• 17:24Speaker 01

  It's, it's, it's focus, because it's focus and long hours. What it was, was, there were only two things that mattered to Steve. And I think, when people ask me, what's the difference between Tim and Steve? The reality is, that's not the right question. The question is, what's the same things between Tim and Steve? And you know their work ethic, they worked harder than anybody. They were completely focused on two things, their Apple and their family. Those are the only two things that mattered. And the third thing was the attention to the products themselves. It was about the products and what we delivered to customers. Believe it or not, not the financial results. That was a secondary function that you obviously needed to keep going, but it was never the primary thing.

• 18:07Speaker 01

  And so those three things are something that I still, you know, take to heart and I feel I, you know, that's what I try to do and how I feel.

• 18:18John Coogan?

  Can we talk about F1? I love that there's a movie and also you can watch the, you can watch the actual races. This feels deliberate. What's the strategy? It seems to make a ton of sense, but how long has this been cooking? What's the thought process?

• 18:34Jordi Hays?

  I remember it must have been last year, John, John had talked about this on the show, wanting this to happen. To see it come together the way it has is amazing.

• 18:42John Coogan?

  Yeah, and it seems like soccer or football sort of faced a similar strategy, but I'm very interested in how you see different media properties connect together.

• 18:52Speaker 01

  Yeah, look, the F1 thing is, is personal. One, I've been an F1 fan for a long time. You know, my, I learned about F1 by going to the library and reading magazines because it, believe it or not, F1 just wasn't televised at all in the United States. So you didn't know anything about it. So I knew a lot about it. Stefano, who's the CEO of Formula One, is somebody who was at Ferrari and then later on at Lamborghini, and I've known him. So when he took on Formula One, I remember meeting with him in London and saying, you know, we're not quite there yet, but someday I hope we can be working together on F1. So I always envisioned that there was things that we could do that no one else could do. The movie came about separately, not kind of related,

• 19:37Speaker 01

  but this, this idea of doing a movie and Jerry and Joe Kozinski, it was really Joe's idea. And I just love the idea because there hasn't been a, a huge racing movie. Most racing movies have not done that well.

• 19:54John Coogan?

  Yeah.

• 19:55Speaker 01

  And I thought there was a real opportunity with F1 to tell an incredible story. And Brad Pitt and the cars and the excitement and that we would, for the first time, had enough technology. To show what it was actually like to be in an F1 car because when you watch on TV, it kind of looks like they're on a Sunday drive. You don't get the G-force and so we had these ideas of taking the iPhone camera and putting them in all over the cars and different ideas that we thought would give that experience. Now, the movie took a lot longer because we had to go through COVID, strikes, all kinds of things.

• 20:31Speaker 01

  But it turned out spectacular and when we would show the movie, one of the questions we would ask to people in the US is how many of you have seen an F1 race? And the truth is very few hands were ever raised. And then after the movie, you asked them, how many people would want to see an F1 race? And you know, every hand went up. And so we thought, wow, if we did this together now and these ideas of how we can really innovate on the whole experience of what it's like to watch an F1 race, we really could make a difference here. And it's been great. We've done three races so far. The ratings are way above what they've ever been in the US.

• 21:12Speaker 01

  And so, and we're just getting started, but things like multi-view, 30% of the people watching F1 races are watching with multi-view so they can get different cameras, see their favorite team. So it's definitely changed a lot of how people are experiencing it.

• 21:30John Coogan?

  That's amazing.

• 21:30Jordi Hays?

  Apple product request, Apple, Apple racing sim. You'll have two buyers.

• 21:37Speaker 01

  You know, we just did, we just did Vision Pro with sim racing so you could do that.

• 21:45Jordi Hays?

  There you go.

• 21:46Speaker 01

  Pro.

• 21:47Jordi Hays?

  There you go.

• 21:48Speaker 01

  We got it for you.

• 21:49Jordi Hays?

  Yeah, the racing and the automotive world has a man on the inside, so.

• 21:54John Coogan?

  I'm the strongest supporter of the Vision Pro. I watched another movie in it this weekend, Jordy.

• 21:59Jordi Hays?

  If I call, when I call John at 10:00 PM on a Friday night, he's always, he's always.

• 22:03John Coogan?

  I love the product. I'm a huge fan. Anyway, thank you so much for taking the time.

• 22:07Jordi Hays?

  It's truly, truly been an honor.

• 22:08John Coogan?

  It's truly been an honor. Congratulations on 50 years. What an amazing accomplishment. We'll talk to you soon.

• 22:14Speaker 01

  I appreciate it. Thank you.

• 22:15John Coogan?

  Thank you. Have a great rest of your day.