How do you replace a legend like Steve Jobs and face a decline in revenue for the company’s most important and iconic products? This is a double challenge for Apple in the 2010s. Under chief executive Tim Cook, the company has found some answers and thrived on its financial statements, but it has not been without any mistakes and fundamentally significant changes to its business.
Apple has grown over the past decade. Its revenue in fiscal 2019 is six times that of fiscal 2009, its new headquarters building is larger than the Pentagon’s, and each of its five business units has access to the Fortune 500 independently.
But what about its products? Its culture?
At the beginning of Tim Cook’s decade, Jobs was still in charge (despite his ill health). In January 2010, he launched the iPad, the last of his game-changing hardware cruises, which began in 1998 and sold well.
But a year later, Jobs had to take sick leave, and he resigned as Apple’s chief executive on August 24, 2011, and died six weeks later, with Mr Cook hand-picked his successor.
Tim Cook’s Apple under pressure to launch next-generation, beautiful, premium, innovative products
Cook, Apple’s head of global operations, knows the company well. But he’s not a product expert, and he lacks Jobs’s close relationship with Apple’s design wizard, Jony Ive, so he handed over most of his hardware and software decisions to Ive.
Tim Cook’s Apple is under intense pressure to launch the next beautiful, premium, innovative product to maintain Apple’s continued growth, profitability and growing loyal user ecosystem. The biggest guess at the time was that, according to Jobs, he was overhauling television, according to a story that Jobs told biographer Walter Isaacson. Mr. Cook spent a whole year hinting that Apple would do big in television, but the plans didn’t come into being.
The first memorable Apple product in a decade is still the work of the Jobs era: the 2010 MacBook Air and the beautiful iPhone 4 that year were re-engraved and re-designed.
Tim Cook’s first big new product was the Apple Watch, released in 2015, but it wasn’t until the third-generation Watch in 2017 that Apple found the right hardware, software and features, essentially a reboot
Another major hardware success under Cook is the AirPods, a wireless headset released in 2016 that seems to be everywhere, like white plastic earrings.
Apple didn’t disclose the number of watches and AirPods sold, but it’s widely believed to be the dominant player in each category, and in line with Apple’s grand tradition, other rivals compete to emulate.
Both of the Cook-era hardware innovations are in the top 10 on The Verge’s list of the 100 best gadgets of the decade. In fact, Apple not only came first, but also made four of the top 10, the only company with more than one product.
IN ANY CASE, APPLE WATCH AND AIRPODS ARE AMONG THE BEST IN THEIR CLASS.
Still, the success of these hardwares cannot be compared to Mr Jobs’s. While annual sales of the iPad fell sharply from its peak, the iPad’s revenue in fiscal 2019 was almost the same as the entire “wearables, homes and accessories” category, which Apple has positioned as Apple’s Apple Watch and AirPods.
This is not entirely Cook’s fault. The industry has undergone a long evolution, and no company has had a big new consumer electronics like the new iPhone, and the closest possible may be Amazon’s Echo smart speakers and Alexa voice assistants, but they can’t match smartphones in terms of sales or impact, at least not yet.
But Mr. Cook does take responsibility for a series of actions that affect Apple’s computer product line. The most popular mainstream MacBook Air has been neglected for five years, while the main pillar of professional audio, graphics and video makers, the Mac Pro, was initially overlooked and then reissued in 2013 in a much larger form than its functionality, angering a potential customer base.
Some insiders believe that Cook gave Ive’s design team too much power, and that the balance Jobs struck between designers and engineers had disappeared, at least until Ive left the company earlier this year.
The Design Supremacy culture rooted in Cook has once again hit the MacBook Pro, making the keyboard of the new laptop so slim, and the USB-C port needs a smooth Mac to work with other extension accessories. Apple has only recently restored a decent keyboard to the latest MacBook Pro and released the more promising Mac Pro. However, extended accessories remain part of its overall Apple product experience.
Another success of Mr Cook’s decade has been to nurture the iPhone as smartphone sales level off and then begin to decline. His biggest change came in 2014, when Apple unveiled two new iPhone 6 models that later featured a big screen created by Android phones, selling like rockets and the choice of big-screen iPhones every year.
Still, Apple saw a drop in iPhone sales and chose to offset them at higher prices, reporting only sales of its product line based on revenue rather than sales. This is a company that once boasted of huge sales.
Cook’s biggest attempt is to get into the service, not the hardware
While Apple is said to be looking at areas such as AR glasses and self-driving cars, Cook’s biggest attempt is to enter the service business, not the devices. The list seems to be growing every year: Apple Music, Apple Pay, Apple News Plus, Apple Credit Card, Apple Arcade, and, more recently, a video streaming service called Apple TV Plus. This puts Apple into a business that the Jobs era could never have dreamed of, but is seen as crucial to strengthening Apple’s ecosystem.
The company has also made a big bet on privacy, trying to separate itself from much-criticized technology companies such as Facebook and Google. Mr Jobs is a privacy hawk, but Mr Cook raised policy and speech to 11, calling privacy a “human right.” He even refused to provide data for the FBI in a terrorism case in 2016.
Apple has a long history: one of the most important consumer technology hardware companies, playing an important role not only in its industry but also in society as a whole. Now, it’s massive and rich. However, it is unclear whether it can become anyone’s favorite music provider, TV network or news service.
Or it could usher in another era of heavy-duty killer hardware.