Under Tim Cook, Apple has grown from a premium device maker to a multifaceted company, with businesses ranging from payment services to an Oscar-nominated film and TV production studio. He oversaw the acquisition of more than 100 companies, including the $3 billion acquisition of Beats in 2014 and the $1 billion acquisition of Intel’s smartphone modem business in 2019.
Inside Apple, Cook inherited a business culture known for being relentlessly picky and is now running the company at a time when technology workers have been increasingly picky about social issues. Cook himself, who in 2014 became one of the first CEOs to declare himself gay, was involved in defending LGBTQIA+ rights.
Cook has also been at the forefront of big corporate mistakes like “Batterygate,” when Apple paid US states $113 to close an investigation into the company purposely cutting battery life, and allegations of poor working conditions. in the factories of its suppliers.
It has also faced a number of external threats to Apple’s business over the years, including, recently, feuds with the Trump government, the US-China trade war, and the Covid-19 pandemic.
What Cook didn’t do was launch another product as successful and revolutionary as the iPhone, but he found ways to keep Apple growing without it.
“It’s possibly the most successful leadership transfer in corporate history,” said Mike Bailey, research director at FBB Capital Partners, of Jobs’s transition to Cook. “Apple needed a cheerleader and a politician, possibly more than a stressed-out founder and micromanager.”
Bailey added: “you are holding the empire, rather than building one.”
A month after taking over as CEO, Cook announced the launch of the iPhone 4S. Since then, Apple has released nearly two dozen other versions of the iPhone at a wider price range, along with new generations of the iPad, Mac and MacBook. Cook also oversaw the introduction of new hardware products – most successful Apple Watch in 2015 and AirPods in 2016.
But even more important than the new devices is the growth of Apple’s services business.
“From a hardware standpoint, some would argue that it was more interactive than revolutionary, but I think it diminishes its contribution to the company,” said Tom Forte, an analyst at DA Davidson, adding that Cook has expanded the notion of what Apple is all about. . “He said, ‘What can 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 was earning 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 revealed for the first time that it had generated $20 billion in service sales in the previous year.
Since then, Apple has launched even more services, including Apple Arcade, Apple TV + and Apple Fitness +, along with a subscription package, which has boosted business even further. In fiscal year 2020, Apple generated nearly $53.8 billion in services revenue, accounting for about 20% of the company’s total sales – Apple does not split individual service sales.
Apple’s focus on services has allowed it to rely less on iPhone sales, which can be volatile and have begun to stagnate, even falling under Cook’s management. One of Cook’s main focuses was offsetting the slowdown in iPhone growth.
“He kept the iPhone party going, but solved a boom-and-bust problem by exploding his services business,” said Bailey of FBB.
Apple still brings in a lot of money each year from iPhone sales. But now, he also has the most consistent profits and highest-margin subscription services to hold the ends while customers stay with their devices longer.
The services also give consumers even more reasons to choose Apple hardware over others, and help the company earn more money from each person who buys one of its devices.
What is the next step?
Cook has already said he doesn’t plan on being at Apple for the next 10 years. But most of the company’s followers expect it to stick around for a few more years.
In that time, he will have a lot to do to shape the company’s future, including rumors of an Apple car and augmented reality glasses, as well as his continued efforts to build his own chips for his devices.
But it will also face big challenges, including Apple’s ongoing antitrust struggle with developers (such as Epic Games) and app regulators.
Forte also questioned whether Apple will be able to maintain its leadership position as the Internet of Things ecosystem grows, meaning consumers will be less dependent on smartphones.
Apple has yet to gain the same traction in connected home appliances as Amazon’s Alexa.
“We can say that they still rely heavily on the iPhone,” said Forte. “I’m still trying to imagine what the future will be like 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 metals to build its products, Cook will likely have to further boost the company’s efforts in the coming years, as climate change poses an ever-increasing existential threat.
Then there’s the question of who will take over the world’s biggest company when Cook resigns. Jeff Williams, Apple’s current chief operating officer, who has been dubbed Tim Cook of Tim Cook in the tech press, would be an obvious choice if the transaction were to happen now. But, being just two years younger than Cook, that succession plan could be more questionable in a few years, Bailey said.
“There doesn’t seem to be another employee, a number two, ready to go, so I think it’s something Apple will have to start solving in the next couple of years,” he said.
(This article has been translated. Click here to read the original version, in English)