How Tim Cook has changed Apple in five years

Tim Cook
Cook took charge of Apple on August 24, 2011 Credit: Reuters

How do you replace Steve Jobs? People had tried before and failed: When Apple’s founder left amid a boardroom coup in 1985, the string of leaders that filled the void almost brought the company to its knees until Jobs’ triumphant return over a decade later.

So when Jobs’ hand-picked successor Tim Cook took command on August 24 2011 – five years ago on Wednesday – it was always bound to be one of the most-scrutinised handovers in corporate history.

Jobs, who would die of pancreatic cancer a few weeks later, was seen as an icon of leadership and innovation. He had been central to the polished icons of the 21st century computing: the iPod, iPhone and iPad, bringing a flair that had made them seem like more than mere combinations of glass and metal.

Cook, meanwhile, was the less-visible chief operating officer; the master of the supply chain who rose at 4.30am every morning to keep the well-oiled machine ticking over. And though he was the obvious candidate to replace the irreplaceable, analysts doubted whether he would be able to keep the Apple magic alive.

Five years later, the same questions persist. Few would deny he was the right man for the job, but under Cook, Apple is yet to release an undisputed hit product.

The world’s biggest company

While the lineup of products in Apple’s stores bears a resemblance to that of five years ago, the company Cook runs has been transformed. Under his tenure, Apple has become the world’s largest public company, and twice broken the record for the biggest quarterly profit in history.

The company has also doubled in size. During Jobs’ last full quarter as chief executive, Apple sold 20.3m iPhones: it now sells more than double that. Its 110,000 staff today compare to just over 60,000 five years ago. When Jobs passed the baton, it had four stores in China, compared to 41 today.

This monumental expansion has also put pressure on Apple over taxes and its swelling overseas cash pile, which Cook has said he is not ready to repatriate without US reform, despite pressures from agitated investors such as Carl Icahn to return more money to shareholders.

The challenge has required a steady hand. Cook has had to appear in front of US politicians at high-profile hearings and charm European politicians investigating its tax affairs, as well as appease grumbling investors. His record here has been impressive: Apple’s share price has more than doubled under Cook.

Innovation

Apple, though, is not known for stock buybacks; it is known for the life-changing product, the thing that consumers don’t know they want until they see it, at which point they positively need it. And while Jobs would surround himself with visionaries such as Sir Jonathan Ive, he was still the beating heart of these bestselling inventions.

When Jobs stepped down, the key question was whether Apple would be able to continue its hot streak, and five years later, the jury is still out.

One of the company’s first releases under Cook’s command was the disastrous Apple Maps, which missed entire towns and important transport links.

Tim Cook unveils the Apple Watch
Tim Cook unveils the Apple Watch Credit: AP

Cook’s most significant new product has been the Apple Watch, which to date has proved to be more of a product for committed consumers than a worldwide phenomenon: Sales to date are estimated at around 15m, which is above average in an emerging wearable technology market, but barely moving the dial for a company of Apple’s proportions.

Apple's ability to keep moving upwards has instead been rooted in growing sales of the iPhone, which have increased particularly impressively in markets such as China and India under Cook's leadership. But the iPhone now makes up more than half of Apple’s sales – more than it did when Jobs stepped down, leading some to question if Apple is over-reliant on one thing.

Cook recently described the popularity of the iPhone as “a privilege, not a problem,” but as the smartphone market has begun to saturate, it has seemed more like the latter: After a 13-year streak of rising revenues, Apple’s sales have fallen for the last two quarters.

Criticism of Cook’s innovation record is often unfair, however: While Apple has continued to refresh its top products with new features, there is never likely to be another iPhone.

Instead, Cook has focused on selling more of the software and services that live on the 1bn iPhones and iPads in use today. Sales from apps and services increased by 19pc year-on-year in the last quarter. The services business includes Apple Music and Apple Pay – two of the more successful new products Apple has launched under Cook – and is now bigger than both the iPad and Mac computers.

Social issues

If there is one thing that has separated Cook from his predecessor, though, it has been in trying to make Apple not only a technological force, but a very public beacon for corporate responsibility.

Cook has campaigned more than many for race and gender equality and gay rights: he became the most high-profile chief executive to come out as gay two years ago, and has made efforts to improve diversity amongst Apple’s workforce.

Apple also became a figurehead for privacy activists around the world this year when Cook refused to bow to the FBI’s demands that Apple unlock an iPhone used by a shooter involved in a terrorist attack in California last year, labelling the request a “dangerous precedent”. Cook eventually won the fight.

On the day he took over from Jobs, Cook told employees: “I want you to be confident that Apple is not going to change”. On that point, at least, he was very wrong.

 

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