Cook’s recipe secures Apple’s future

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The financial world continues to reel as new global threats abound in the wake of the Covid-19 pandemic. A the looming global food shortage rivals rampant inflation and high energy costs as top concerns.

On the investment scene, a California judge struck down quotas on corporate boards as unrelated to financial performance, and two asset classes avoided by all ESG investors — like KiwiSaver funds — became the most sought-after stocks in a falling market.

The war in Ukraine, with its high demand for lethal weapons, has driven demand for defense companies such as Lockheed Martin and Northtrop Grumman, which have produced a whopping 23.4% return over the past 12 months.

New Zealand’s reluctance to defend an existential threat to democracy in Ukraine with lethal weapons is out of step with other Western nations, although gunnery training will help.

Oil and gas companies, once dubbed stranded assets, have become highly sought after, with Saudi Aramco ousting Apple’s glamorous tech stock to become the world’s most valuable company.

A local investment adviser criticized KiwiSaver fund managers for failing to recognize the harsh realities of the new world order, blinded by their obsession with ESG (environmental, social and governance) factors.

In California, Superior Court Judge Maureen Duffy-Lewis struck down a 2018 law that mandated at least two or three female directors on corporate boards. The court found that the law did not serve any public interest in eliminating discrimination, or that mixed boards achieved superior corporate performance.

Apple co-founder Steve Jobs wanted his legacy to live on.

Triumphant return

California is also home to Apple, the company that has wowed the world over the past four decades with devices that set new standards in design and innovation. Its co-founder and major inspirational figure was Steve Jobs, who was sacked in 1985 but returned triumphantly to restore his fortunes before his death from cancer in October 2011.

Many large companies have had to undergo dramatic changes to accommodate new leadership. Jobs himself studied examples such as Walt Disney, Edwin Land (Polaroid) and Akio Morita (Sony) to structure his business and develop a succession plan.

He realized that these big companies, led by creative founders, weren’t the same without them, and he wanted Apple to avoid that fate. To what extent he achieved this goal is the subject of After Steve, the result of four years of work by the wall street journal journalist Tripp Mickle and his colleagues, as well as interviews with more than 200 past and present Apple employees.

This was no easy task, as Apple is notoriously secretive and prohibits its top executives from discussing business, even with their spouses and friends. Like other American business journalists, Mickle doesn’t dwell on even trivial details in an account of over 400 pages, plus another 100 detailed source notes and an index.

Mickle’s approach is to follow the background and careers of Apple’s two key post-jobs-era decision-makers, chief executive Tim Cook and design guru Jony Ive. While Apple is one of the most documented companies in the world, avid followers will be rewarded with hardware not yet in the public arena. Others with less existing knowledge will learn a lot about a successful company and the pressures of working for one.

the wall street journal journalist and author Tripp Mickle.

Early focus

The early focus on Cook and Ive, whose roles have been largely overlooked, reveals two very different personalities who were groomed by Jobs for separate and complementary roles.

Cook is best known, having been raised by devout Christians in Alabama and embarking on a successful technocratic career at IBM, Intelligent Electronics and Compaq. He was hired for his knowledge of how hardware businesses work and how to improve them. He was named chief executive in 2009, two years before Jobs died.

I also grew up in a religious middle-class English background, where his father had a career in mechanics and design, skills he passed on to his son. Ive’s genius in developing new products took him to Silicon Valley, where he joined Apple just as John Sculley replaced Jobs as CEO in 1985.

The most of After Steve focuses on the period from 2011 to 2019 when I officially left Apple and Cook had made the world’s most valuable company. The book’s subtitle, “How Apple Became a Trillion-Dollar Company and Lost Its Soul,” is premature in the first part of this statement and wavers in the second.

Apple design guru Jony Ive with two highlights.

Conventional opinion

It was the conventional view on Wall Street and in the industry that Apple would lose its post-Jobs mojo, be unable to deliver new products as successful as the iPhone, and be just another participant in a hardware market. commodity oriented.

But Cook had other ideas as part of a mission to persuade Wall Street that Apple would move away from making must-have products and become one that puts the iPhone at the center of everyday transactions and takes a stake in each of them.

This meant everything from listening to music, watching movies and reading publications to financial payments. “He saw it all as a way to shed the burden of a juice-strapped device business and enter a world of services that promised unlimited growth,” Mickle writes.

Wall Street absorbed the message, doubling Apple’s price-earnings ratio by 15 times to 30. Cook delivered on his promise to double Apple’s services revenue to $53 billion in 2020.

In Mickle’s summary, after Ive’s departure, Cook, “played the role of a steward who made the company more representative of his personality: careful, collaborative and tactical. It built an ecosystem of products and services around its predecessor’s breakthrough inventions and maintained its reputation for releasing best-in-class hardware and software updates.

Still, the book’s fascination with Ive produced the juiciest stories, as Apple’s design operation struggled with creating new products to rival the iPhone. I’ve had success with “wearables” such as the Apple Watch and AirPods, which made $38.4 billion in sales in 2021, more than Coca-Cola.

Tim Cook.

Tim Cook.

Recent milestone

But others, like the Apple car, remain in the development stage or have fallen into disuse. A recent milestone was the announcement that the iPod, once Apple’s best-selling product, was to be discontinued.

Jobs was a daily visitor to Ive’s design studios, which also produced the iMac and iPad, but Cook had little interest in that side of the business. I first thought about leaving in 2015, eventually agreeing to work part-time, in part so his salary wouldn’t be disclosed in regulatory postings. But he soon returned to full-time work until he finally left to start his own business unhindered by budgetary and other pressures.

Ive still has Apple as a client and remains involved with the unfinished car project, while working for luxury goods companies and a sustainability initiative with Prince Charles.

Mickle tells these and other stories with anecdotes gleaned from interviews with former employees. The toll of deceased executives is considerable, including its hardware and software chiefs, with Ive expected to take on those roles in the first few years after Jobs died.

In the most recent developments, Apple’s stock price has fallen 20% year-to-date to a market capitalization of US$2.6 trillion, with half of that loss coming this month alone. . That’s well below the heady days of early January, when it briefly topped US$3,000,000, being the first company to do so.

Apple products turned into wallpaper.

Apple products turned into wallpaper.

Tech stocks fall

The deterioration of the global economy, as well as the war in Ukraine, caused technology stocks to fall. Apple was among the most active stocks in the S&P 500 and the third worst performer in the Dow Jones Industrial Average.

Much of this has to do with China’s continued lockdown policy to eliminate the Covid-19 virus and the impact on Apple’s supply chain. This week the Wall Street JournalI reported that Apple had told some of its contractors, mostly based in Taiwan, to ramp up production outside of China in places like India and Vietnam.

Over 90% of Apple products such as iPhones, iPads and MacBook laptops are made in China. Generally, Cook declined to comment, saying in April, “We continue to look to optimize.”

Apple said complications from Covid-19 in China could hamper sales by up to $8 billion in the second quarter. Clearly, Cook’s expertise in bringing products to market will continue to be Apple’s core strength as the company negotiates a global environment clouded by high commodity prices, a war in Europe and volatile financial markets.

After Steve: How Apple Became a Trillion Dollar Company and Lost Its Soul, by Tripp Mickle (HarperCollins).


Nevil Gibson is a former editor for NBR. He has contributed film and book reviews to various publications.

This is content provided and not paid for by NBR.

Contact the author: [email protected]

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