Ten years after taking office, Cook now runs the world’s most valuable company – tech or otherwise – and it remains among the most influential. Over a billion people around the world 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, less than two months before the death of the Apple founder. Since, Apples (AAPL) Market capitalization rose about 600% to nearly $ 2.5 trillion, and its annual revenue more than doubled.
If Jobs were known for his ability to create breakthrough devices that redefine the technological experience for consumers, Cook could be known for expanding the Apple ecosystem – creating a suite of subscription services and other hardware products that complement the main activity of the iPhone. Jobs launched.
Within Apple, Cook inherited a company culture known to be relentlessly demanding and he now manages at a time when tech workers are increasingly vocal on social issues. (Cook himself, who in 2014 became one of the first prominent CEOs to declare himself gay, has been involved in advocating for LGBTQ + rights.)
Cook has also been at the forefront of major corporate missteps such as “Batterygate” and allegations of poor working conditions at its supplier factories. A recent announcement for a new child protection initiative also turned into an unexpected public relations nightmare. And it has faced a host of external threats to Apple’s business over the years, including, most recently, feuds with the Trump administration, the US-China trade war, and the Covid-19 pandemic.
What Cook didn’t do was launch another product as successful and disruptive as the iPhone, but he found ways to grow Apple without it.
“This is perhaps the most successful transfer in the history of the company,” said Mike Bailey, director of research at FBB Capital Partners, of Jobs’ transition to Cook. “Apple, frankly, needed a cheerleader and a politician, maybe more than a stressed-out founder of micromanagement. “
Bailey added: “You are maintaining the empire, instead of building one.”
The growth of services
A month after taking office as CEO, Cook announced the launch of the iPhone 4S. Since then, Apple has released nearly two dozen more versions of the iPhone in a wider price range, as well as new generations of iPads, Macs, and MacBooks. Cook also oversaw the introduction of new hardware products – most successfully, the Apple Watch in 2015 and the AirPods in 2016.
But the growth of Apple’s service business is even bigger than the new devices created under its leadership.
“From a material standpoint, I think you can argue that it was more iterative than revolutionary, but I think it diminishes its contribution to the business,” said Tom Forte, analyst at DA Davidson, adding that Cook had broadened the notion of what Apple was. . “He said … ‘What can Apple be? Apple can be a music subscription service, Apple can be a fitness subscription service, Apple can be more than the App Store.'”
Even in the first five years of his tenure, Apple was deriving significant revenue from its Services division, which included products such as iCloud, launched in October 2011; Apple Podcasts, launched in 2012; and Apple Music, launched in 2015. In January 2016, Apple first revealed that it had generated $ 20 billion in service sales the previous year.
Since then, Apple has launched even more services, including Apple Arcade, Apple TV + and Apple Fitness +, as well as a subscription package, which have further boosted business. In fiscal 2020, Apple generated nearly $ 53.8 billion in service revenue, representing about 20% of the company’s total sales. (Apple does not break down sales for individual services.)
Apple’s focus on services has allowed it to be less reliant on iPhone sales, which can be volatile quarter-over-quarter and have started to level off, or even decline at times under Cook. A key goal for Cook has been to offset this slowdown in iPhone growth.
“It kept the iPhone party going, but it solved a boom-bust problem by blowing up their service businesses,” FBB’s Bailey said.
Apple still makes tons of money every year from iPhone sales. But now it also has the more consistent and higher margin benefits of subscription services to act as a buffer while customers keep their devices for longer. The services also give consumers even more reasons to choose Apple hardware over others, and help the company make more money for every person who buys one of its devices.
Cook has previously said he doesn’t plan to work at Apple in 10 years. But most followers of the business expect there to be at least a little more left.
Meanwhile, he will have a lot to do in shaping the future of the company, including the long rumored release of an Apple car and AR glasses, as well as his continued efforts to create his own chips for his devices. .
But it will also face major challenges, including Apple’s current antitrust battle with app developers and regulators. Forte also questioned whether Apple would be able to maintain its leadership position if the growth of Internet of Things devices means consumers become less dependent on smartphones. Apple has yet to gain the same traction in connected home devices as Amazon’s Alexa, and earlier this year it ditched its original HomePod in favor of the cheaper mini version.
“It can be argued that they are [still] heavily dependent on the iPhone, ”Forte said. “I’m still trying to imagine what the future will look like and what will happen when the smartphone is no longer the center of the universe.
Under Cook, Apple has also worked to reduce its impact on the environment, including planning to become carbon neutral by 2030. But given that the company depends on a complex global supply chain and metals rare earths to manufacture its products, Cook will likely have to push the company’s efforts further in the years to come, as climate change poses an increasingly existential threat.
Then there is the question of who will take charge of the world’s largest company when Cook steps down. Apple’s current COO, Jeff Williams, who has been dubbed Tim Cook of Tim Cook in the tech press, would be an obvious choice if he took over now. But just two years younger than Cook, that succession plan could be more questionable even in a few years, Bailey said.
“It doesn’t look like there’s another insider, number two, ready to go, so I think that’s something Apple will have to start working on over the next couple of years,” he said. he declares.