Ten years into the job, Cook now leads the most valuable company in the world — technology or otherwise — and it remains among the most influential. More than a billion people worldwide use its devices and tens of millions of developers have built businesses on its software platforms.
Cook succeeded Steve Jobs as CEO on August 24, 2011, two months after the death of Apple’s founder. Apple (AAPL), has seen its market capitalization grow by 600% to $2.5 trillion. Its annual revenues have more than doubled.
If Jobs was known for his ability to create groundbreaking devices that redefined consumers’ experience of technology, Cook may come to be known for expanding the Apple ecosystem — building a suite of subscription services and other hardware products that complement the core iPhone business Jobs launched.
Apple’s growth has been remarkable under Cook. It is now a leading device manufacturer and a multifaceted business with businesses that range from payments services to film production studios and a TV network. Cook has overseen more than 100 acquisitions, including Beats’ purchase of $3B in 2014 and Intel’s $1B acquisition of its smartphone modem business.
Cook inherits a culture at Apple that is demanding. He now manages a team of tech workers who are vocal on social issues. (Cook himself, who in 2014 became one of the first leading CEOs to come out as gay, has been involved in LGBTQ+ rights advocacy.)
Cook was also responsible for several corporate disasters, including “Batterygate”, and claims of low labor standards at suppliers’ factories. A recent announcement around a new child protection initiative also turned into an unexpected PR nightmare. He has also managed to navigate a number of threats external to Apple’s business throughout the years. These include feuds between the Trump administration and US-China trade war, as well as the Covid-19 pandemic.
Cook is yet to launch a product that’s as disruptive and successful as the iPhone. But he has found other ways to grow Apple without it.
Mike Bailey, FBB Capital Partners’ director of research, stated that it was “possibly the most successful handoff of strength to strength” regarding the transition from Jobs and Cook. Apple, quite frankly, required a cheerleader, a politician and possibly more than just a stressed-out founder.
Bailey said, “You are maintaining an empire rather than building one.”
Services are growing
Cook launched the iPhone 4S a month after he was appointed CEO. Apple released almost two dozen new versions of its iPhone, at more price points and with the release of new models of the Mac, iPad, and MacBook. Cook also oversaw the launch of several new products, including the Apple Watch (2015) and AirPods (2016).
Even more important than new Apple devices, is his growth in Apple’s service business.
D.A. said, “From a hardware perspective, I think it can be made the argument that the iterative over the revolutionary but that I believe that reduces his contribution the company.” Tom Forte, Davidson analyst, said that Cook had expanded our notion of Apple. He said, “What could Apple be?” Apple could be a music subscription, Apple could be a health subscription, and Apple might even be an app store.
Apple made significant revenue even in his first five years. This included its Services division which featured products like iCloud which was launched in October 2011, Apple Podcasts which were launched in 2012, and Apple Music which was launched in 2015. In January 2016, Apple revealed for the first time that it had generated $20 billion in services sales in the previous year.
Apple launched additional services since then including Apple Arcade and Apple TV+. Apple’s services revenues accounted for 20% of its total sales in 2020, and reached nearly $53.8billion. Apple doesn’t separate sales of individual services.
Apple’s focus on services has allowed it to be less reliant on iPhone sales, which can be volatile from quarter to quarter and have begun to plateau, even dipping at times under Cook. Cook’s main focus has been to offset the slowing iPhone sales.
FBB’s Bailey stated that Bailey kept the iPhone party alive, while solving a boom-bust issue by expanding their services business.
Apple still makes a lot of money each year through iPhone sales. It also enjoys the higher margin, consistent profits of subscription services. This buffer allows customers to keep their iPhones for longer periods. Apple services give customers more reason to select Apple hardware than other brands, as well as helping the company make more money from every person who purchases one of their devices.
Cook has already said he doesn’t plan to be at Apple in another 10 years. Most Apple fans expect Cook to stay for at most a few more years.
He’ll be able to shape the company’s future with a variety of projects, such as the long-rumored release an Apple car or AR glasses. The company will also continue its efforts in building its own chips for its products.
However, he will also have to face significant challenges including Apple’s ongoing antitrust battle with app developers as well as regulators. Forte also wondered if Apple would be able maintain its position as a leader in the internet of things device market. Apple has yet to gain the same traction in connected home devices as Amazon’s Alexa, and earlier this year killed off its original HomePod in favor of the cheaper mini version.
Forte stated, “It can be argued that they are still heavily dependent upon the iPhone.” “I am still trying to imagine what the future will look like, and what happens when smartphones are no longer at the centre of the universe.
Apple’s Cook has been working with the company to reduce its environmental impact, and even plans to be carbon neutral by 2030. But given that the company is dependent on a complex global supply chain and non-renewable rare earth metals to build its products, Cook will likely have to push the company’s efforts further in the coming years, as climate change poses an increasingly existential threat.
There is also the issue of who will be taking over the leadership of the largest company in the world when Cook leaves. If he was to take over, Jeff Williams, Apple’s chief operating officer and has been called Tim Cook’s Tim Cook by the tech media. Bailey stated that Cook is only two years older than Bailey and this succession plan may be less questionable over the next few years.
He said that it didn’t appear like another insider was available. Therefore, he believes Apple will have to begin to tackle this issue over the next two-years.
Publiated at Tue 24 August 2021, 10:36:04 +0000