Defending Tim Cook: Why Apple remains in good hands
Despite recent stock woes and the rough HomePod launch, Tim Cook has represented Apple well in his time at the helm, and blaming him for not being Steve Jobs is pointless, and ignores the new realities surrounding Apple that have developed in the last five years.
Last Friday, following a series of media and analyst reports about soft iPhone demand, weak HomePod sales and other woes, Apple had one of its worst days in years. The company was the worst performer in the Dow on Friday, April 20, bringing Apple negative for the year.
The main reason for the pronounced dip was a note by analyst Katy Huberty of Morgan Stanley, normally an Apple bull, who argued that "June quarter consensus estimates need to be revised lower," and lowered her price target for Apple's stock to $200 from $203.
This caused Apple's stock to drop as low as $165, its lowest level since early February, while the stock would drop below $165 in the ensuing days. This, perhaps unsurprisingly, has led to some sharp criticism from some of Tim Cook himself.
CNBC's Fast Money Halftime Report, on Friday afternoon, was particularly tough on Cook, with the panel arguing that Apple's success in recent years has been all delayed runoff from the Steve Jobs years -- which ended almost seven years ago.
Indeed, Cook has taken fire from all sides in recent months. Mark Zuckerberg had a sharp reply to Cook's criticism of Facebook this month, calling it "glib." Amnesty International ripped Cook for Apple's privacy practices in China. Even actor James Woods took a shot in February, after Apple released an ad featuring same-sex couples dancing.
However, much of the criticism of Cook, ever since he took the helm of Apple, has boiled down to one thing: He's not Steve Jobs. He doesn't run Apple like Steve Jobs did, and doesn't always do exactly what Steve Jobs would do. This is especially the case on the occasions when Apple is in the news for not-so-good reasons. Remember the "Tim Cook Must Go" campaign of 2013/'14?
For another, these arguments implicitly invoke a fictitious, idealized version of Steve Jobs who always did everything right and never made mistakes or became embroiled in crises at Apple -- one bearing virtually no resemblance to the actual Steve Jobs.
Everyone making an "if Steve Jobs were alive" argument might as well be saying that "If Steve Jobs were alive, he would be doing everything exactly the way I would if I were running things at Apple."
For instance, if I want Apple to more greatly emphasize Macs, I'll go ahead and argue that if Steve Jobs were alive, he'd be all about Macs. No one could ever prove me wrong. The dynamic involving fans of the New York Yankees, and their attitude towards the late owner George Steinbrenner, is strikingly similar.
And, saying that software was more stable under Jobs than Cook is ignorant of history. If you're a long-time AppleInsider reader, or Mac user, you know this already. We feel that it can get better, given the much larger public visibility, and larger target cross-section that Apple presents because of it, as compared to ye olden days -- but it sure isn't worse.
And, don't forget, if Jobs is infallible about things Apple as claimed -- he picked Cook for the job.
iPhone demand may have slowed, but it's still very very high, while Apple's services business remains robust. Plus, it's not like Cook's product releases have been failures. Sure, the HomePod had a rough launch. But Apple Music is thriving, while AirPods are continuing to grow.
Additionally, it's hard to argue with the revenue and net income numbers that Apple has posted under Cook. The year Cook took over as CEO in August, 2011, was Apple's first year making more than $100 billion in annual revenue, a figure that reached $200 billion for the first time in 2015. Overall, Apple earned more than a trillion dollars in revenue between 2013 and 2017, nearly double the $520.36 billion the company made between 1997 and 2012.
In terms of net income, Apple made annual profits in the single-digit billions between 2005 and 2009, ultimately reaching $14 billion in 2010. That figure reached $25.9 billion in 2011 and has continued to rise since, reaching a high of $53.4 billion in 2015; Apple made a profit of $48.3 billion in 2017.
There's one other positive thing about Cook: Unlike a lot of CEOs, especially those in the tech sector, Cook has largely avoided personal missteps, or any other public behavior that's reflected poorly on the company, in his time on top of Apple. From a personal standpoint, he has represented Apple well.
Sure, not acting like a jackass isn't exactly a high bar to clear. As we've learned over the course of the last year, many powerful people have failed to do so. But Cook is not one of them.
Beyond that, when bad news has struck Apple various times over the years, Cook has shown that he's better at dealing with the fallout than, say, Mark Zuckerberg has been for his own little internet fiefdom.
If the worst that can be said, nearly seven years into his tenure as CEO, that Cook's Apple faces a potential guidance downgrade at a time when it's the most valuable company in the world, there are far worse imaginable fates.
Last Friday, following a series of media and analyst reports about soft iPhone demand, weak HomePod sales and other woes, Apple had one of its worst days in years. The company was the worst performer in the Dow on Friday, April 20, bringing Apple negative for the year.
The main reason for the pronounced dip was a note by analyst Katy Huberty of Morgan Stanley, normally an Apple bull, who argued that "June quarter consensus estimates need to be revised lower," and lowered her price target for Apple's stock to $200 from $203.
This caused Apple's stock to drop as low as $165, its lowest level since early February, while the stock would drop below $165 in the ensuing days. This, perhaps unsurprisingly, has led to some sharp criticism from some of Tim Cook himself.
CNBC's Fast Money Halftime Report, on Friday afternoon, was particularly tough on Cook, with the panel arguing that Apple's success in recent years has been all delayed runoff from the Steve Jobs years -- which ended almost seven years ago.
Apple falling as Morgan Stanley cuts its price target & iPhone shipment estimates...but analyst Katy Huberty says to buy any dip following earnings $AAPL pic.twitter.com/Z7YXGhPQ1M
-- CNBC Halftime Report (@HalftimeReport)
Indeed, Cook has taken fire from all sides in recent months. Mark Zuckerberg had a sharp reply to Cook's criticism of Facebook this month, calling it "glib." Amnesty International ripped Cook for Apple's privacy practices in China. Even actor James Woods took a shot in February, after Apple released an ad featuring same-sex couples dancing.
However, much of the criticism of Cook, ever since he took the helm of Apple, has boiled down to one thing: He's not Steve Jobs. He doesn't run Apple like Steve Jobs did, and doesn't always do exactly what Steve Jobs would do. This is especially the case on the occasions when Apple is in the news for not-so-good reasons. Remember the "Tim Cook Must Go" campaign of 2013/'14?
"If Steve Jobs Was Still Alive"
"If Steve Jobs were alive today" are arguments are, by their very nature, specious and ridiculous. For one thing, they're based entirely on conjecture, as no one knows exactly how someone who has been dead for close to seven years would react to a unique situation arising today, much less the adherence to Moore's Law in iPhone processors that Intel has failed to deliver for the Mac. It's an argument that's impossible to prove and equally impossible to refute.For another, these arguments implicitly invoke a fictitious, idealized version of Steve Jobs who always did everything right and never made mistakes or became embroiled in crises at Apple -- one bearing virtually no resemblance to the actual Steve Jobs.
Everyone making an "if Steve Jobs were alive" argument might as well be saying that "If Steve Jobs were alive, he would be doing everything exactly the way I would if I were running things at Apple."
For instance, if I want Apple to more greatly emphasize Macs, I'll go ahead and argue that if Steve Jobs were alive, he'd be all about Macs. No one could ever prove me wrong. The dynamic involving fans of the New York Yankees, and their attitude towards the late owner George Steinbrenner, is strikingly similar.
And, saying that software was more stable under Jobs than Cook is ignorant of history. If you're a long-time AppleInsider reader, or Mac user, you know this already. We feel that it can get better, given the much larger public visibility, and larger target cross-section that Apple presents because of it, as compared to ye olden days -- but it sure isn't worse.
And, don't forget, if Jobs is infallible about things Apple as claimed -- he picked Cook for the job.
Cook's Achievements
Leave aside that Cook was in the inner circle of Apple for many years alongside Jobs, and that Cook's leadership of Apple can't in any way be considered a repudiation or reversal of everything Steve Jobs stood for. Apple's performance, by all sorts of metrics, has been superlative throughout Cook's tenure. Apple is, after all, the most valuable company in the world- something it rarely was during the Jobs years- and is likely to become the world's first trillion-dollar company sometime this year. Apple had its highest-revenue quarter ever in Q1 of 2018. Its active install base is over 1.3 billion.iPhone demand may have slowed, but it's still very very high, while Apple's services business remains robust. Plus, it's not like Cook's product releases have been failures. Sure, the HomePod had a rough launch. But Apple Music is thriving, while AirPods are continuing to grow.
Additionally, it's hard to argue with the revenue and net income numbers that Apple has posted under Cook. The year Cook took over as CEO in August, 2011, was Apple's first year making more than $100 billion in annual revenue, a figure that reached $200 billion for the first time in 2015. Overall, Apple earned more than a trillion dollars in revenue between 2013 and 2017, nearly double the $520.36 billion the company made between 1997 and 2012.
In terms of net income, Apple made annual profits in the single-digit billions between 2005 and 2009, ultimately reaching $14 billion in 2010. That figure reached $25.9 billion in 2011 and has continued to rise since, reaching a high of $53.4 billion in 2015; Apple made a profit of $48.3 billion in 2017.
There's one other positive thing about Cook: Unlike a lot of CEOs, especially those in the tech sector, Cook has largely avoided personal missteps, or any other public behavior that's reflected poorly on the company, in his time on top of Apple. From a personal standpoint, he has represented Apple well.
Sure, not acting like a jackass isn't exactly a high bar to clear. As we've learned over the course of the last year, many powerful people have failed to do so. But Cook is not one of them.
Beyond that, when bad news has struck Apple various times over the years, Cook has shown that he's better at dealing with the fallout than, say, Mark Zuckerberg has been for his own little internet fiefdom.
The CEO they need right now
Tim Cook didn't build Apple. He's not as charismatic as Steve Jobs, nor is he a significant pioneer in the history of American computing. He's not a household name and likely won't ever have a Hollywood feature film made about him with Michael Fassbender or Ashton Kutcher playing him. But, his tenure as CEO of Apple has seen a great deal more success than failure, and many more wins than losses.If the worst that can be said, nearly seven years into his tenure as CEO, that Cook's Apple faces a potential guidance downgrade at a time when it's the most valuable company in the world, there are far worse imaginable fates.
Comments
Memo to Tim Cook
As portrayed above, you’ve done a great job at quietly transforming the company. You are also open enough for some friendly random advice like this: please consider eliminating or reducing the special dividend (rumored in piece on Gene Munster), in favor of such things as listed below. Please forgive this quick spate of half-baked ideas. I assume your staff can improve on it. And I hope AppleInsider's devotees can too. Thank you.
—Look at Dan Rather’s interviews of star musicians on ACXS TV? Maybe Apple can get rights and continue that formula: Big Name journalist interviews Star.
—Seed budding professionals, graduating from Top 10 Journalism schools.
—Something like Nat Geo Explorers. Fund twenty-somethings touring of Southern China, Nigeria, etc with backpack and iPhone X Plus.
—Seed talented young art and film producers in Berlin, Shanghai, Beijing, Mumbai, etc. No strings but hope Apple exclusive.
—Songwriting moments: (see NY Times songwriter series, Taylor Swift’s exclusive series of vignettes with AT&T DirectTVNow, surprisingly well-produced)
—Geographical purview. Use Apple’s unique global footprint to solicit local talent so anyone worldwide can click COUNTRY/CITY and from that Apple store website start a new journey, attach to leading media of area, top historic sites, etc.
—Reward top retail staff with gifts like concert tickets, trip for two to an island, weekend getaway in Yosemite. Maybe a lottery of such prizes for others, including new staff. Costs relatively nothing for the long-term benefit.
—Seek unique “interstitial” content from devs and artists. Tiny uplifting poem, riffs, sayings, art, mixed media that can surprise and uplift, available for watch or HomePod. (Lagniappe philosophy with regard to content. Apple does this often with functionality, mixing ease and beauty. Try apply that to short-form content. Freebies that reinforce the wonder of ecosystem.) Ex-Vine might have views.
— Develop a curated app that is a daily, or twice daily, “Russian Roulette” get to choose one of six hidden choices for some of the best of the web (excluding Cat Videos, celebrity nonsense). If general success, can break into categories, including, forgive me, celebrities.
Next question “who’s better”?
I got nothing...
Apple has dominated and continues to do so.
Me suggesting Cook looks “feminine” isn’t an insult. He’s going to leave a legacy of one of the most successful tech CEO’s ever...
Respect.
The look is called the Whammy:
Great article -- well said!
As in “We’ve come for your profits Chuck”. - Beetlejuice reference
I am one of the Apple-watchers-buyers-stockholders who believe that the one thing Tim lacks is control over a company that is expected to be a market leader and frankly no longer is. Is it profitable? You bet it is! But it is profitable in spite of some of the stupidest blunders imaginable. Most recently: the battery throttling is the result of a continued hubris left over from Steve that Tim should long ago have extricated. Divulging new products months before they are ready to launch has repeatedly allowed competitors who are already in the market, to get a jump on Apple. And then to miss the target date is a mistake that lays directly at Tim's feet. Apple is big enough and has a diverse enough customer base to stay at the top of the tech market and any area, but instead appears to only be able to work on one product at a time. So many of Apple's products languish for years without an update that it is embarrassing. Mac Pro, Mini, AppleTV, all sit around gathering dust without updates for so long that they descend into technological mediocrity and infuriate customers who would be happy to spend the money for a quality refresh. Apple frequently releases products that are way behind the curve of what is currently available, then over prices them, then ignores them for years.
Apple's current stock price should be 50% higher than it is, and would be if Tim Cook got his act together and either actually led the company, or stepped aside to let someone else do the job. Lead, follow, or step aside. There is money to be made in gaming desktops and laptops (they are not dissimilar to pro machines), but Apple is so far behind that curve no serious gamer even looks at Apple. Apple's half-assed response to the connected-home industry, AI, professional software and hardware are ample testimony to a lack of leadership under Tim. Others are setting the bar higher than Apple seems capable of reaching, and by the time it gets close, the bar's already moved higher. Perception is often the key to profitability, and the market's belief that Apple is the technology star is no longer embedded in either the consumer's or market analyst's mind. And that's going to be Tim's legacy.
And one final point: get Jony Ive out of the business. He has long since forgotten that form FOLLOWS function. A Mac Pro that looks like an air purifier? No one asked for that, Jony. It is NOT what the pro market wanted or needed. And the sales sucked as a result. And five years later the response is an iMac?
As far as I can tell he’s a good CEO but Apple is losing its juice.
Sitting on a Mountain of off Shore Money may be fine for the investor class, but does consumers little good. A good CEO needs to exhibit political savvy (and have a strong stomach).
Apple is mainly coasting on incrementalism. Incrementalism if fine but provides little incentive, little fun, and much less excitement.
Apple needs to really fund and support more creativity in the company. We need something like a Green Apple Division which we know are exploring “Next Generation” ideas and products under which label we find and get to play with these experimental ideas.
In the realm of incrementalism Apple can be clueless or boneheadedly cheap as it is in not updating the Airport Express and it’s optical out to serious sound systems and in not updating the iPad Mini with more memory, storage and processing power.
In the meantime we have our iPhones, iPads, and Mac(s) of choice, but for innovation we seem to need to look elsewhere.
I think Apple could get 15% market share with little effort.
The server scale back has also been disappointing. Storing everything online (which it seems like Apple wants) doesn’t work outside of documents & email.
Steve didn’t invent everything himself but he did push people to do more than they ever thought possible. Mr Nice Guy Tim is ruining all that.
And all the time Tim spends on social issues when he should be CEO kills me. Perhaps Tim has so little to do with the company he has plenty of time to be political. But that’s just another reason he should not be CEO.
Tim’s legacy for Apple is slow decay to oblivion as the Jobs product train runs out.