How Apple is ‘finding its way forward’ under Tim Cook’s stewardship
25 March 2014 11:11 PM GMT
Under Timothy D Cook or Tim Cook, who took over as chief executive shortly before Steve Jobs died in October 2011, Apple ‘teeters at the edge of a reckoning,’ Kane writes. Its executives, she adds, ‘cannot find their own way forward. They are tired. They are uncertain. The well of ingenuity has run dry.’ Cook said in a statement that it was all ‘nonsense’. He’s right.
There are two ways to assess how well Apple has done under Cook. You could look at its financial performance, which is boring but instructive. Or you could do as Kane does and instead sift through all the noise and commentary surrounding the company, observers’ assessments of its shifting corporate culture, of its executives’ temperaments during product-launch events, or the fact that such arbiters of taste as Mitch Albom, the author of ‘Tuesdays With Morrie’, no longer care for Apple’s advertising.
For the most part, Kane sticks with these more subjective assessments, and she arrives at a familiar set of conclusions. She argues that Apple has forgotten how to innovate, that its products are too closed and expensive, and that it is failing to live up to its own well-honed hype. These aren’t novel critiques; they’ve been seen as evidence of Apple’s imminent failure throughout its history, even under Jobs. And there isn’t much evidence that they’re any more true now than they were in the past.
Cook’s book
In the two and a half years since Cook took over as Apple’s CEO, the company’s annual revenue has grown by about 58 per cent, and its profits by about 40 per cent. That compares favourably with many of its rivals, including Google, whose profits increased by about 25 per cent in the same period.
It’s true that the growth in sales of Apple’s biggest product, the iPhone, has slowed under Cook. Last holiday season, the company sold 51 million iPhones, an increase of about 38 per cent since 2011, when Apple was selling the last iPhone that Jobs worked on.
That level of growth is slower than in periods under Jobs; for instance, between the holiday quarter of 2010 and the holiday quarter of 2011, iPhone sales rose by 130 per cent. The iPhone’s growth under Cook has also lagged that of the wider smartphone industry, which means that Apple’s market share is in decline.
On the other hand, much of the growth in the wider smartphone business has occurred at the low end of the market. Consequently, under Cook, Apple’s share of the profits in the smartphone business has actually gone up. When Jobs ran the company, Apple raked in about two-thirds of all the world’s smartphone profits. Last holiday season, under Cook, analysts’ estimates put Apple’s share of smartphone profits at between 76 per cent and 87 per cent.
Taken together, what do these numbers tell you about Apple under Cook? They paint a picture of a company doing very well, if not as spectacularly as it did at certain times in the recent past. They suggest that while Apple’s growth might have slowed, it hasn’t stalled. The numbers certainly do not suggest a company in decline. At worst, you can say that Apple has entered a period of stasis, though if stasis means earning 80 cents of every dollar of smartphone profits, that can’t be so bad.
There are two ways to assess how well Apple has done under Cook. You could look at its financial performance, which is boring but instructive. Or you could do as Kane does and instead sift through all the noise and commentary surrounding the company, observers’ assessments of its shifting corporate culture, of its executives’ temperaments during product-launch events, or the fact that such arbiters of taste as Mitch Albom, the author of ‘Tuesdays With Morrie’, no longer care for Apple’s advertising.
For the most part, Kane sticks with these more subjective assessments, and she arrives at a familiar set of conclusions. She argues that Apple has forgotten how to innovate, that its products are too closed and expensive, and that it is failing to live up to its own well-honed hype. These aren’t novel critiques; they’ve been seen as evidence of Apple’s imminent failure throughout its history, even under Jobs. And there isn’t much evidence that they’re any more true now than they were in the past.
Cook’s book
In the two and a half years since Cook took over as Apple’s CEO, the company’s annual revenue has grown by about 58 per cent, and its profits by about 40 per cent. That compares favourably with many of its rivals, including Google, whose profits increased by about 25 per cent in the same period.
It’s true that the growth in sales of Apple’s biggest product, the iPhone, has slowed under Cook. Last holiday season, the company sold 51 million iPhones, an increase of about 38 per cent since 2011, when Apple was selling the last iPhone that Jobs worked on.
That level of growth is slower than in periods under Jobs; for instance, between the holiday quarter of 2010 and the holiday quarter of 2011, iPhone sales rose by 130 per cent. The iPhone’s growth under Cook has also lagged that of the wider smartphone industry, which means that Apple’s market share is in decline.
On the other hand, much of the growth in the wider smartphone business has occurred at the low end of the market. Consequently, under Cook, Apple’s share of the profits in the smartphone business has actually gone up. When Jobs ran the company, Apple raked in about two-thirds of all the world’s smartphone profits. Last holiday season, under Cook, analysts’ estimates put Apple’s share of smartphone profits at between 76 per cent and 87 per cent.
Taken together, what do these numbers tell you about Apple under Cook? They paint a picture of a company doing very well, if not as spectacularly as it did at certain times in the recent past. They suggest that while Apple’s growth might have slowed, it hasn’t stalled. The numbers certainly do not suggest a company in decline. At worst, you can say that Apple has entered a period of stasis, though if stasis means earning 80 cents of every dollar of smartphone profits, that can’t be so bad.
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