After ten years of work, Cook leads the most valuable company in the world (technology or not) and remains one of the most influential. More than a billion people around the world use their devices and tens of millions of developers have created companies on their software platforms.
Cook took over as CEO of Steve Jobs on August 24, 2011, less than two months before the Apple founder died. Since then, From Apple (AAPL) market capitalization has grown by about 600%, to nearly $ 2.5 trillion, and its annual revenue has more than doubled.
If Jobs was known for his ability to create innovative devices that redefined consumer technology experience, Cook could become known for expanding Apple’s ecosystem: creating a set of subscription services and other hardware products that complement the basic iPhone business that Jobs launched.
Within Apple, Cook inherited a company culture known for being incessantly demanding and now manages at a time when tech workers have been increasingly vocal about social issues. (Cook himself, who in 2014 became one of the first top CEOs to come out gay, has been involved in advocating for LGBTQ + rights).
Cook has also been at the forefront of major business mistakes like “Batterygate” and allegations of poor working conditions at its suppliers ’factories. A recent announcement about a new child protection initiative also turned into an unexpected public relations nightmare. And it has explored a number of external threats to Apple’s business over the years, including, most recently, disputes with the Trump administration, the U.S.-China trade war, and the Covid-19 pandemic.
What Cook hasn’t done is launch another product as successful and disruptive as the iPhone, but has found ways to keep Apple growing without it.
“It’s possibly the most successful transfer in corporate history,” said Mike Bailey, research director at FBB Capital Partners, about Jobs ’transition to Cook. “Frankly, Apple needed a cheerleader and a politician, possibly more than a micro-administrator,” the founder stressed.
Bailey added, “You’re keeping the empire instead of building one.”
The growth of services
A month after taking over as CEO, Cook announced the launch of the iPhone 4S. Since then, Apple has released nearly two dozen more versions of the iPhone at a wider price range, along with the new generations of iPad, Mac and MacBook. Cook has also overseen the introduction of new hardware products – most successfully, the Apple Watch in 2015 and the AirPods in 2016.
But even more important than the new devices brought to life under his leadership is the growth of Apple’s services business.
“From a hardware standpoint, I think you can argue that it’s been more iterative than revolutionary, but I think it’s diminishing its contribution to the company,” said DA Davidson analyst Tom Forte, who added that Cook expanded the notion of what Apple is. “He said …” What could Apple be? Apple can be a music subscription service, Apple can be a fitness subscription service, Apple can be much more than the App Store. ”
Even in the first five years of his tenure, Apple earned significant revenue with its services division, which included products like iCloud, which was launched in October 2011; Apple Podcasts, which was released in 2012; and Apple Music, which launched in 2015. In January 2016, Apple revealed for the first time that it had generated $ 20 billion in service sales the year before.
Since then, Apple has launched even more services, including Apple Arcade, Apple TV + and Apple Fitness +, along with a subscription package, which have further boosted the business. In fiscal year 2020, Apple generated nearly $ 53.8 billion in service revenue, which accounts for about 20% of the company’s total sales. (Apple does not break sales of individual services).
Apple’s focus on services has allowed it to rely less on iPhone sales, which can be volatile from quarter to quarter and have begun to reach heights, even sometimes falling under Cook. One of Cook’s key focuses has been to offset the slowdown in iPhone growth.
“It kept the iPhone party going, but it solved an explosion problem by exploiting the business of its services,” Bailey of FBB said.
Apple continues to make cash every year from iPhone sales. But now, it also has the most consistent and highest margin benefits of subscription services to act as a buffer as customers keep their devices longer. The services also give consumers more reasons to choose Apple hardware over others and help the company earn more dollars from every person who buys one of their devices.
What’s next?
Cook has already said he doesn’t plan on being at Apple in ten years. But most of the company’s fans expect him to stay at least a few more.
At this point, you will have on the plate many things that could shape the future of the company, including the long-rumored launch of an Apple car and AR glasses, as well as continued efforts to build your own chips for your devices.
But it will also face major challenges, including Apple’s current antitrust fight with application developers and regulators. Forte also wondered if Apple will be able to maintain its leading position if the growth of Internet of Things devices means consumers are less dependent on smartphones. Apple has yet to gain the same traction on connected home devices as Amazon’s Alexa, and earlier this year ended up with its original HomePod in favor of the cheaper mini version.
“It can be argued that they are [still] “Depending a lot on the iPhone,” Forte said. “I’m still trying to imagine what the future is like and what happens when the smartphone is no longer the center of the universe.”
Under Cook, Apple has also been working to address its impact on the environment, including plans to become carbon neutral by 2030. But given that the company depends on a complex global supply chain and non-renewable rare earth metals to build their products, Cook will likely have to drive the company’s efforts in the coming years, as climate change poses an increasingly existential threat.
Next up is the question of who will take over the management of the world’s largest company when Cook leaves office. Jeff Williams, Apple’s current chief operating officer, who has been christened Tim Cook by Tim Cook in the tech press, would be an obvious choice if he were taking over now. But with only two years less than Cook, that succession plan could be more questionable in a few years, Bailey said.
“There doesn’t seem to be another privileged member, number two, ready to start, so I think this will have to start addressing Apple over the next two years,” he said.
