Apple CEO strides beyond Jobs’ path
Tim Cook became CEO in August 2011, but is just beginning to put his own imprint on Apple. Cook is straying from Jobs’ cash-hoarding habits by committing to return $130 billion to shareholders through dividends and stock buybacks.
The Associated Press
SAN FRANCISCO — “Think different” became Apple’s creed during the late Steve Jobs’ reign as chief executive. Now CEO Tim Cook is embracing the idea while making decisions that would have seemed crazy to his fabled predecessor.
Apple’s planned $3.2 billion deal for headphone-maker and streaming-music company Beats Electronics is the latest of Cook’s deviation from Jobs, who had so much confidence in Apple’s innovative powers that he saw little sense in spending big on acquisitions.
Cook became CEO in August 2011, about six weeks before Jobs died. But in a number of ways, he is just beginning to put his own imprint on Apple. He is straying from Jobs’ cash-hoarding habits by committing to return $130 billion to shareholders through dividends and stock buybacks.
He is behind a stock split and agreed to match workers’ charitable contributions up to $10,000 annually.
Under Cook’s leadership, Apple also has displayed more social responsibility by working to improve labor conditions in the overseas factories that assemble its devices and by moving to reduce pollution caused by its data centers and gadgets.
The shift in philosophy has resulted in an odd twist: Apple’s pace of innovation has slowed and it now looks more like a conventional company.
Instead of releasing revolutionary gadgets such as the iPod, iPhone and iPad, Apple has been mostly upgrading existing products and figuring out ways to manage its bulging bank account.
“Jobs wanted Cook to step out and be different,” says technology analyst Rob Enderle. “But I think he wanted (Cook) to do the things that were central to the business, not things that Jobs thought were stupid.”
Cook has repeatedly sought to assure investors and customers that Apple remains focused on inventing “insanely great” products, even though the company’s last breakthrough, the iPad, came out in April 2010 — 18 months before Jobs died of cancer.
In the meantime, a host of technology companies have forged ahead with wearable devices, including Google Glass and Samsung’s line of Gear smartwatches.
Also stealing the innovation spotlight: Internet-connected housewares and appliances like the Nest thermostat, whose maker was founded by former Apple designer Tony Fadell. Google purchased Nest for $3.2 billion in January.
Although Cook has given few clues about the breakthrough products Apple is working on, recent industry speculation has focused on the possibility of an Internet-connected watch, a suite of mobile applications for managing personal health, a digital wallet, and a system that would make it easier to toggle between traditional television and Internet video programs. A new iPhone with a larger display screen is also expected in August or September.
“We have not seen any dramatic product changes to suggest Apple has evolved a lot from where it was three to five years ago, but it sure feels like the company is pregnant and we will soon know a lot more,” says Forrester Research analyst Frank Gillett. “If a Beats acquisition is the biggest news of the year, then it will be a bust.”
With $150 billion in cash, Apple can easily afford to buy Beats. Still, some analysts are puzzled as to why Apple would bother buying Beats when it already owns iTunes and could easily license technology to make even better headphones on its own.
In a conference call with analysts last month, Cook acknowledged to being “on the prowl” for acquisitions.
“We look for companies that have great people and great technology and that fit culturally and we don’t have a rule that says we can’t spend a lot or whatever,” he said. “We’ll spend what we think is a fair price.”
Concerns about Apple’s innovation drought have been heightened by Cook’s management style.
Although he has always been a highly respected executive, Cook focused on managing Apple’s product inventory and component needs before he had to start filling in for the ill Jobs.
Cook’s adroit handling of the more tedious side of Apple’s business proved to be an ideal complement for the visionary Jobs, who preferred to pour his energy into conceiving new devices.
Cook is “the guy who liked doing everything that Steve Jobs hated to do,” says analyst Enderle. “When you make Jobs’ polar opposite the CEO, it’s probably not going to work out well.”