Is Apple Tim Cook's Company Yet?
Late Tuesday, we learned that Apple has basically moved out of normal company orbit. It’s earning record profits on fat margins and accelerating business as if it were a lean startup — not the largest public company in the world.
But the company is crushing it still largely on a decision made by Steve Jobs in 2004: to put aside development on a tablet and prioritize instead a device that would also be a new category — the smartphone. In Apple's most recent quarter, it sold 74.5 million iPhones, a record number and 6-7 million more than optimistic analysts had predicted.
Apple is the iPhone company. That one device accounted for 56% 69% of Q1 revenue — up from 56% of last year) (add in iPad sales, and that means iOS accounted for more than 80% three-quarters of everything Apple sold) [Thanks to commenter Bart Vanhaelewyn for catching my errors, and politely pointing them out]. Sales of the iPhone in China did not exceed those in the US, as the Financial Times reported they would. But overall sales in China — a brand new market for iPhone — were up 70% year over year.
Other nifty factoids:
- Profit of $18 billion was the biggest ever reported by a public company
- Cash pile is now $178 billion. That's $556 for every American, or enough to buy Intel, Cisco, IBM or Amazon
- They sold their one billionth iOS device in November (a 64 gig iPhone 6+)
- Apple and Samsung are now essentially tied for top seller of smartphones. Apple does that with one device (with limited options), and Samsung with a range of models.
Cook has proven himself, and then some. But even in the mourning period for Jobs, his hand-chosen successor was already being criticized. Yes, the knocks were more about Jobs' uniqueness than Cook's possible shortcomings. But the point was the same: Apple's days as the "It" company of IT were now officially numbered.
Perhaps the starkest assessment came from Forrester CEO George Colony, who predicted six months after the death of Steve Jobs that Apple would "decline" like so many companies after the loss of their charismatic founders, who separate the greatest from the greats, he argued.
Cook just didn't have the right stuff. "Like Sony (post Morita), Polaroid (post Land), Apple circa 1985 (post Jobs), and Disney (in the 20 years post Walt Disney), Apple will coast, and then decelerate," Colony wrote.
In a retort, Cult of Mac founder and Apple chronicler Leander Kahney said don't you believe it:
True, Cook can sometimes come across a little boring compared to the fiery, idiosyncratic Jobs. But Cook has the mojo to be the once and future king.
Much of Apple’s success over the last 10 years can be directly attributed to Cook, particularly in the way the soft-spoken Alabaman pieced together Apple’s supply chain into a fierce weapon the company can use to undercut its competition, dominate resources, ship devices at unprecedented volumes and deliver products that are literally a year ahead of its competitors … all while taking in bigger profits than literally any other force in the industry.
You could argue that Colony just isn't right yet. But as Kahney predicted, Cook has surely — to say the very least — played the best hand possible with the great cards he was dealt.
But it's still Steve Job's Apple. The company, which managed to re-invent itself and the tech industry almost on schedule from the day Steve Jobs triumphantly returned as CEO in 1998, is still riding the crest of the Jobs era. Cook is maximizing return. What more do we want of the man?!
Many of us won't admit it, but what we want is another grand slam. A lot is riding on the fate of Apple Watch, including the first important chapter in Tom Cook's legacy. This will be the first device of the Cook era. It will launch in April.
I've written optimistically of the device for Apple, and more recently that poor battery life may result render stillborn an important tech category nobody has yet turned into a mainstream need.
Colony, for what it's worth, is still betting against Cook. In September, he wrote Apple Watch was "Beautiful, but a niche product" and that only 10% of iPhone users would buy one. "[N]ot bad, but hardly the 'breakthrough' or 'new chapter' claimed from the Cupertino stage."
Does Apple Watch have to succeed for Cook to be seen as a worthy successor to Steve Jobs? Has he sealed his legacy already? Is his current reputation undeserved?
Mobility Engineering Technical Lead at Financial Institution
9yApple is firing on ALL cylinders. Apple under Cook is calculated. They definitely have a stockpile of new products they can release, but will only release them when THEY feel it is ready. I say THEY because under Cook Apple's important decisions are being made by the executive team, rather than Job's sole intuition. One direction they are moving slowly into, but will pay dividends on is the enterprise. They are slowly catering to enterprise customers with DEP, OS X Server feature upgrades, IBM partnership, MDM events, continuation of Xsan, ARD, and Boot Camp development... This is genius, this along with spill-over from consumer purchases and VM acceptance will allow them to eventually begin to slowly gartner customers in the enterprise. I am seeing the growth first hand in the company I work at, which is Mac-friendly, but suspect the same will begin to occur with other companies as well; especially with the onslaught of cyber security threats targeted at PC vulnerabilities, leaving Mac computers unscathed for the most part. I definitely think it is Cook's Apple now... Tim Cook is heading Apple in the right direction. The hardest thing I see Cook dealing with is how to manage all that is going on while executing a level of perfection that is expected of Apple, while adding more products and categories to Apple's roster. This is one area Job's excelled at with his laser-like focus; not sure if it was a by-product of meditation for Job's, but Cook could benefit from it to continue delivering more features and product categories while focusing on delivering that attention to detail and "perfection" so-to-speak we all expect from Apple.
MBA Candidate USYD | EGM - Commercial at efm Logistics
9yDefinitely will be interesting to see how Apple handles this new and ground-breaking product with Jobs.
Senior IT Security Consultant, Senior Manager Sales, CSSP
9yFor some reason, I hope Apple executives read over these comments and consider it, but I tell myself that 'Why should they pay attention?" I have always been impressed with those who can truly turn a company around. Examples like Jack Welch, Andy Grove, Steve Jobs, Howard Schultz etc. The story of WHO Jobs was and how he behaved before he was let go, what he went through and how he acted within NeXT and Pixar, and his focus and goals upon his return is one worth re-visiting. While MANY people consider to think "What would Steve do?" They never have the basis of STUDY to understand what he DID do. When he said that famous line to Tim "Don't try to be like me" I am not certain he was saying to abandon the vision he had and the steps he followed to keep the company in momentum. Lessons learned by the original iPod team, iPad team, iTunes team, the OSX team, the iOS team, the iMac team the MacBook Pro team, etc. What ground work he put in play there, seems to have fallen off. I think there remains a HUGE market potential in OS X products and in iOS products. But I think to keep it going, a VERY careful study of his changes and approaches should have been maintained (the second time around). Mishaps with iOS 8, the APP store, OSX 10.10, technical support handling of the press, the current retail store issues... these all show a degradation that should be honestly admitted to at the Board level and at the VP level. Then a RULE-based method of re-enacted to get back to those "Jobs Second Coming" standards need to be put in play and maintained. While I NEVER had a business that drove as much sales and success as Apple, I am an ardent student of business turn around, a strong understanding of business operations, and a FIRST HAND practitioner of both using UNIX products for almost two decades and Apple products my whole life. I work with endless Apple devices to repair and install new, and have the entire history available to draw from to express this in an objective way. Apple needs to re-cap intellectually exactly what Jobs did to drive the business to market and resurgence, and not look to new markets as the savior to the future without HOLDING forth with products and methods from Steve's return.