Steve Jobs is a tough act to follow at Apple
For years, Apple Inc.’s Steve Jobs has groomed a senior management team to take the reins of the world’s most powerful technology company when his fading health would no longer allow him to continue as chief executive.
Tim Cook, who assumed that mantle Wednesday when Jobs resigned the post, inherits a firm that has achieved record sales and profits and a string of blockbuster consumer products.
Apple is the globe’s second-largest company in terms of market value and has amassed a war chest of $76 billion in cash. Apple dominates entire categories of consumer electronics including tablet computers and portable music players. With new versions of the iPhone, iPad and other gadgets in development, the product pipeline is stuffed for years to come.
It’s a dream setup for a new CEO to achieve incredible success — or to fail spectacularly.
Cook wins praise from analysts and former colleagues as a dogged, savvy executive who repaired Apple’s broken supply chain. But some on Wall Street question whether Cook can match Jobs’ vision and ability to anticipate the next hot technology trend, or keep up with his marketing charisma. Jobs will assume a more limited role as Apple’s chairman.
“It’s impossible to replace” Jobs, said Andy Hargreaves, an analyst at Pacific Crest Securities. “There’s no way you’re going to be as dynamic a company without him.”
Apple in many respects is the embodiment of Jobs’ controlling personality and minimalist design aesthetic. He earned a reputation as a relentless perfectionist for whom no detail has been too trivial, down to the contours of a computer mouse and the menu at Apple’s Cupertino, Calif., cafeteria.
But after a series of medical setbacks, Jobs has been forced to prepare for an Apple without him. He has been working to instill his attributes — his attention to detail, his demand for accountability and his penchant for secrecy — on the executives who will one day succeed him.
Apple’s elite include Scott Forstall, the vice president of mobile software, a longtime Jobs protege who designed the software that runs Apple’s computer and portable devices. Jonathan Ive, the company’s head of design and an employee since 1992, has been responsible for the look and feel of the iPod, iPhone, iPad and many of Apple’s Mac computers.
Jobs’ way is reinforced at a series of weekly meetings, where the executive team meets to discuss strategy and review projects and ensure unity of purpose. He hosts a secret off-site gathering every year of top employees to map out his long-term vision for the company. And Jobs reportedly has created an in-house institution known as Apple University, to train the next generation of corporate leaders.
“I want you to be confident that Apple is not going to change,” Cook wrote in an email sent Thursday to Apple employees. “I cherish and celebrate Apple’s unique principles and values. Steve built a company and culture that is unlike any other in the world and we are going to stay true to that — it is in our DNA.”
The soft-spoken Cook is a stark contrast to the mercurial Jobs. Raised in Robertsdale, Ala., Cook earned an undergraduate degree in industrial engineering in 1982 from Auburn University, where one former professor remembered him as focused, polite and intense.
“He was very quiet, very reserved. But he has a strong sense of himself,” recalled Robert Bulfin, an emeritus professor of industrial and systems engineering. “If he thinks he’s right, I think he’s sort of like a bulldog.”
Jobs enticed Cook away from Compaq Computer Corp. to join Apple in 1998, a time when the troubled company was on the precipice of failure. While Jobs obsessed over every facet of Apple’s products, Cook concentrated on the minute details of its business operations. His attention was a good fit in a company with a culture of perfection.
Apple observers have long credited the company’s success to Jobs’ ability to concentrate on a handful of products in which he saw the most potential.
“Does Tim have the same ability as Steve to have 100 prototypes come into his office and to say no to 99?” said Richard Doherty, an analyst with the technology consulting firm Envisioneering Group in Seaford, N.Y. “Time will tell, but he’s not alien to that thought process.”
Cook’s efforts were as crucial to Apple’s resurgence as any of Jobs’ designs, industry analysts said. He has filled in for Jobs during the chief executive’s medical absences in 2004, 2009 and in January, when Jobs announced an indefinite leave.
Investors anticipated that Jobs would not return to a full-time role as CEO, and some Wall Street analysts said Cook’s ascension would lend the company stability at a time when the technology giant is posting record revenue and profit. In a sign of investor confidence, Apple shares closed down a modest $2.46, or 0.6% to $373.72 on Thursday. The stock is up 16% year to date.
“Having Tim as CEO is the best solution in our eyes,” Colin W. Gillis, a technology analyst with BGC Partners, wrote in a letter to investors Thursday. “We see Tim as a steady hand on the tiller of the company.”
But there is a difference between a great manager and a great leader, said Al Checchi, the former chairman of Northwest Airlines and the man who helped the Bass brothers of Texas acquire a 25% stake in a troubled Walt Disney Co. in 1984. One of Cook’s first challenges is to demonstrate that he can be both.
“The job of a leader, in any sphere, is to take the institution and constantly modify it and adapt to a dynamic environment,” said Checchi, author of “The Change Maker: Preserving the Promise of America.”
Cook inherits a company riding a decade of stunning success.
Apple’s trio of mobile devices — the iPod, the iPhone and the iPad — transformed the company from a computer maker to a consumer electronics powerhouse. Apple’s iPad alone will account for nearly 75% of tablet computers shipped this year, according to a recent report from market research firm IHS iSuppli. The company has sold close to 25 million of the devices since it was launched in April 2010.
The iPhone reimagined the mobile phone from simply a device for making telephone calls to a pocket computer that lets people surf the Internet, play games and get from place to place — all with the touch of a fingertip. The company has sold, to date, nearly 130 million iPhones worldwide since the device first hit stores in 2007.
Apple is expected to introduce a new version of its iPhone as soon as next month. Soon to follow: a higher-resolution iPad. Some analysts believe that the company is secretly working on an Apple-branded television.
But Apple’s product plans only extend so far into the future. A true test of Cook’s ability as CEO will be whether he can implement his own vision and attract the top-flight talent he’ll need to create Apple’s next hit devices.
“It’s going to come down to what happens when Apple has to make a new product,” said N. Venkat Venkatraman, professor in management, information technologies, at the Boston University School of Management. “If Apple doesn’t lead with the design, and some other company does and subsumes Apple … then everyone will say Tim missed it.”
