Steve Jobs is legendary for a relentless, driving style that has helped him disrupt more industries than any other chief executive of his generation.
Tim Cook, left, has a tough act to follow as chief executive of Apple. Steve Jobs, right, was a relentless negotiator who made it hard to say no.
The question now:
Is his successor, Tim Cook, aggressive enough to muscle Apple into new turf like TV and publishing where the company hasn't yet established a dominant foothold?
The real test for Mr. Cook will come when he is no longer benefiting from Mr. Jobs's triumphs and must conquer new markets on his own. Executives in media companies, for instance, are reluctant to give up control of their products and fear Apple will end up eating away at their profits. Mr. Cook must win them over.
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Investors are standing by Apple's new management for now—its stock fell just 0.65% Thursday while the broader Nasdaq dropped nearly 2%.
An Apple spokeswoman declined to comment.
An immediate challenge for Mr. Cook will be to advance Apple's plans in what is expected to be a key market for growth: digital video. Apple is working on new technology to deliver video to televisions, and has been discussing whether to try to launch a subscription TV service, according to people familiar with the matter. Unlike the iPod and music, where Apple has a commanding position, the battle to rule online video remains wide open and the company faces fierce competition.
Tim Cook, the newly appointed CEO of Apple, sent an email to Apple employees after Steve Jobs stepped down Wednesday saying the company's best years lie ahead. WSJ's Walt Mossberg and Nick Wingfield join digits to discuss the future of Apple
Apple's digital-book, magazine and newspaper services are in their early days.
Even if Mr. Cook is willing to take the kind of risks that Mr. Jobs did, the company's board will likely scrutinize his moves more carefully, said Forrester Research Chief Executive George Colony. "It will be very reasoned and logical, but Apple will not take the leaps that it took when you had Steve in that chair," he said.
Then there's the bully factor. One of the biggest advantages that Apple will lose without Mr. Jobs at the helm, said an Apple business partner, is the "fear that Steve instilled."
For instance, Mr. Jobs famously browbeat some music industry executives to agree to his terms when he launched the iTunes music store that eventually upended the music industry.
Time Warner Inc. CEO Jeff Bewkes, whose company had to negotiate with Apple over iTunes said.
"Steve can be pretty unvarnished, he's never understated about his beliefs. If he thinks that you're not doing something right, he will tell you why in pretty colorful terms, which I have always appreciated."
At times, Mr. Jobs used his power of persuasion to convince companies that they had to work with Apple, even if it meant giving up some control. Jean-Louis Gassee, a venture capitalist and former Apple executive said.
"It all stems from Steve's animal drive to not let anyone control him or his company."
Compared with Mr. Jobs's fiery style, Mr. Cook's management approach is more measured and analytical, people who know him say.
In a letter to employees on Thursday, Mr. Cook said Apple wouldn't change.
"Steve built a culture that is unlike any other in the world and we are going to stay true to that—it is in our DNA."
Click below image to view an Interactive Chronological History of Steve Jobs.
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Click below image to view an Interactive Slide Show of Steve Jobs Through The Years.
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Click below image to view an Interactive Slide Show of Steve Jobs And Apple Through The Years.
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Click below image to view an Interactive Slide Show of "The Apple Evolution".
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Mr. Jobs will go down in the annals of business as one of the greatest disrupters.
- The Apple II helped launch the PC revolution.
- The Macintosh and publishing software took printing out of commercial printing shops and put it on anyone's desktop.
- The iPod grabbed dominance of the portable music player—a market pioneered by Sony Corp.'s transistor radios in the 1950s and its Walkman in the 1970s—from traditional consumer-electronic giants.
- iTunes has catapulted Apple into a giant in music streaming and wrest control of music sales from record stores, helping spell the demise of retailers like Tower Records.
- The iPhone shook up the mobile-phone world.
- The iPad ushered in a whole new category of mobile gadgets that consumers didn't even know they wanted.
Mr. Jobs often forced competitors to react to Apple.
- Google Inc. acquired Motorola Inc. in large part to shore up its patents so it can continue to offer a smartphone-operating system that competes with Apple.
- Hewlett-Packard Co. recently said it was spinning off its computer business and shutting down the TouchPad, their tatblet, because it was unable to compete in the mobile-device world that Apple now dominates.
Mr. Jobs's success in reaching deals with partners often gave Apple a huge competitive advantage. When Apple signed an exclusive deal with AT&T Inc. for the iPhone, it persuaded the carrier to give it complete control over the branding and marketing of the device, a concession that no other mobile phone maker has been able to get.
When Apple ran into a problem with AT&T, Mr. Jobs made the phone call that triggered prompt action. When iPhone sales started accelerating after the debut of the iPhone 3GS in 2009 and AT&T had trouble handling the network capacity from iPhone users, Mr. Jobs called Glenn Lurie, then AT&T's point man on its relationship with Apple, and chewed him out for poor service that damaged Apple's brand, according to people familiar with the matter. The following year, the carrier rolled out a major commitment to boost spending on its network.
When record companies were initially balking at the idea of the iTunes music store in 2003, Mr. Jobs made a plea directly with the rock group the Eagles to persuade them, and its label, AOL Time Warner Inc.'s Warner Music to sign. He even offered to personally demo the service for Eagles singer Don Henley.
Mr. Jobs won media chiefs over by convincing them that they lacked successful digital strategies and needed to be saved, several media executives said. One senior media executive said.
"He tells you you are a nematode. He makes you feel that if you listen to him, you have a chance."
More recently, Apple has made headway in striking deals for digital delivery of newspapers and magazines, after Mr. Jobs disparaged publishers' print products, people familiar with the matter said. Big names like Condé Nast and Hearst Corp. have come around, beginning to sell subscriptions to their titles through iTunes, even as Apple has restricted how they can sell their content and gather data. Media executives have often said they have no choice but to do business with Apple as few other digital distribution alternatives exist.
When talks between Apple and some of the major magazine publishers were hung up on the terms under which publishers could sell their iPad editions, Mr. Jobs offered to step in and "break any ties," one industry executive said. Ultimately, however, the two sides worked out their differences, rendering his intervention unnecessary.
As for the future under Mr. Cook, this executive said.
"The question is going to be if a whole new version of this needs to be invented, I don't know enough about [Cook's] background to know if he's going to spur the innovation to create breakout products, but I can say they have a big bench."
Mr. Jobs often criticizes, in public and private, the experience of watching TV as clumsy and bad for consumers. But he has said the existing system, where consumers get content from different cable and satellite providers that use different technologies, makes it difficult to innovate.
Both he and Mr. Cook have called Apple TV, a box that allows consumers to watch media from iTunes and a few other online video services, like Netflix Inc., on TVs, "a hobby."
But the area is shaping up to be a big priority for a wide range of companies, from cable and satellite providers to its Internet rivals like Google Inc. And to crack it, Apple needs to try to redefine not only the experience of watching TV but the business model of how consumers pay for it once again, analysts say. While iTunes popularized buying individual TV shows or movies, consumers already are flocking to new subscription services like Netflix that offer unlimited access for a low monthly fee.
In 2009, Apple tried rounding up media companies to offer a bundle of TV shows for a monthly fee through iTunes, according to people familiar with the discussions. But it tabled the talks after few showed interest.
Richard Doherty, an analyst at the Envisioneering Group, likens Apple's attempt to change the TV business model to "pushing this giant marshmallow uphill.
"They just don't have the deals yet. TV, with myriad rights holders and cable and satellite companies to reckon with, is "light years" tougher to transform than the music industry."
People who have worked with Mr. Cook at Apple say that he often arrives at the same conclusion as Mr. Jobs, albeit with a lower-key approach. Suppliers who have dealt with Mr. Cook's team say he is a formidable negotiator, and his team haggles down the price of parts to the half a penny.
COMMENTARY:
BIOGRAPHY
Tim Cook graduated from high school at Robertsdale High School, earned a B.S. degree in industrial engineering from Auburn University in 1982, and his MBA from Duke University's Fuqua School of Business in 1988.
Cook spent six months at Compaq as VP for Corporate Materials before he was hired in 1998 by Steve Jobs to join Apple. He initially served as Senior Vice President for Worldwide Operations. Prior to that, Cook served as the chief operating officer (COO) of the computer reseller division of Intelligent Electronics and spent 12 years in IBM's personal computer business as the director of North American Fulfillment.
Steve Jobs gave Cook a mandate to clean up the atrocious state of Apple's manufacturing, distribution, and supply apparatus. Cook is credited with pulling Apple out of manufacturing by closing factories and warehouses around the world. This helped the company reduce inventory levels and streamline its supply chain, dramatically increasing margins.
One day back then, he convened a meeting with his team, and the discussion turned to a particular problem in Asia. During the meeting Cook told the group.
"This is really bad. Someone should be in China driving this."
Thirty minutes into that meeting Cook looked at Sabih Khan, a key operations executive, and abruptly asked, without a trace of emotion,
"Why are you still here?"
Khan, who remains one of Cook's top lieutenants to this day, immediately stood up, drove to San Francisco International Airport, and, without a change of clothes, booked a flight to China with no return date, according to people familiar with the episode.
The story is vintage Cook: demanding and unemotional.
Cook calls inventory "fundamentally evil," and he has been known to observe that it declines in value by 1% to 2% a week in normal times, faster in tough times like the present.
Cook says.
"You kind of want to manage it like you're in the dairy business. If it gets past its freshness date, you have a problem."
IS TIM COOK RIGHT FOR THE APPLE CEO JOB?
This logistical discipline has given Apple inventory management comparable with Dell's, then as now the gold standard for computer-manufacturing efficiency.
The most common observation about Cook is how temperamentally different he is from Jobs. Cook is cool, calm, and never, ever raises his voice. Jobs - well, he's not any of those things. A former Apple executive says he used to have a rehearsed line in his head on the off chance he ended up in an elevator with Jobs, who can be spontaneously fearsome. Did he have a similar canned speech for Cook?
"No, because he wouldn't talk to you."
Tim Cook did such a great job fixing Apple's manufacturing and inventory problems and increasing Apple's gross profit margins, that in January 2007, Cook was promoted to COO.
Cook served as Apple CEO for two months in 2004, when Jobs was recovering from pancreatic cancer surgery. In 2009, Cook again served as Apple CEO for several months while Jobs took a leave of absence for a liver transplant.
In January 2011, Apple's Board of Directors approved a third medical leave of absence requested by Jobs. During that time, Cook was responsible for most of Apple’s day-to-day operations while Jobs made most major decisions. Following the resignation of Jobs, Cook was made CEO of Apple Inc. on August 24, 2011.
Cook also serves on the Board of directors of Nike, the only member of the executive team allowed to serve on the board of an outside company.
Steve Jobs claim to fame goes beyond his innovation and vision, and incredible trackrecord as a product picker, but the fact that he is one of the first modern day technology iconoclasts. The other technology iconoclast is Bill Gates. It's a rarity to see two technology iconoclasts emerge from the same era. The two of them made the personal computer what it is today. Tim Cook is not an iconoclast.
No CEO, no matter how innovative and visionary gifted he is, can single-handedly create great products, build and manage an organization, and execute strategy without surrounding himself with equally gifted and experienced managers who march in lock and step with the CEO's grand vision and mission.
Outside Apple, many observers, informed and otherwise, assumed Cook couldn't become Apple's next CEO. A Silicon Valley investor who travels in the Apple orbit said.
"Nobody would make Tim Cook CEO. That's laughable. They don't need a guy who merely gets stuff done. They need a brilliant product guy, and Tim is not that guy. He is an ops guy - at acompany where ops is outsourced."
Michel Mayer, who was CEO of Freescale Semiconductor when it supplied Apple with microprocessors, has a slightly more positive take. May says.
"I'm not sure he'd be able to replace Steve's design creativity. Then again, I could argue that it's not the role of the next CEO to do that."
Michael Mayer makes an excellent point, Tim Cook does not need to have Steve's design creativity, he has Jonathan Ivey, the master product designer. Ivey, who joined Apple in 1992, is the leading designer and conceptual mind behind the iMac, titanium and aluminum PowerBook G4, G4 Cube, MacBook, unibody MacBook Pro, MacBook Air, iPod, Iphone and iPad.
According to Carmine Gallo, Steve Jobs is perhaps one of the greatest "product pickers" of all time. Jobs had a knack for conceptualizing minimalist, beautiful and elegant products that improved the quality of life for its customers. Steve Jobs shunned focus groups. He never used them to identify consumer needs. Apple designed products that filled a need before the customer even knew they need them. This includes the Apple II, the first fully assembled computer for the mainstream consumer and the iPad.
Apple is working on several dozen new product ideas at any one time, and it takes special ability to pick the winners. Steve Jobs product picking ability was extraordinary. Steve was a perfectionist, often driving Ivey's product design team insane with his demands. Every little product detail was important to Steve. Steve felt that if he didn't like it, neither would the customer. A product didn't get launched until it was perfect. Tim Cook was never involved in picking new products, Steve Jobs did that, so I am very worried that Apple will loose its product picking edge.
Steve's new product launch presentations are classic. The iPod, iMac, iPhone, iPad, all of them. In 2009, Carmine Gallo published "The Presentation Secrets of Steve Jobs", a national best seller. Gallo wrote the book because he believed that Steve's communications skills and ability to deliver clear and concise, but convincing and overpowering presentations in front of a large gathering was one of the secrets to his success. Steve was so good that he convinced his customers to pay for music downloads, something they had never done. Tim Cook lacks Steve's incredible presentation skills, and future product launches will probably lack the delivery, clarity of purpose, powerful delivery and excitement that was Steve's trademark.
Here are a couple of videos of Tim Cook announcing that the iPhone 4 would be distributed through Verizon.
There are stark differences in management style between Steve Jobs and Tim Cook. Steve is fiery, outspoken, critical, arrogant, a perfectionist, and a micro-manager par excellence. Tim Cook does not micro-manage, but delegates the work of executing Apple's strategic initiatives. Tim talks softly, is unemotional, but firm. He is the classic, "Talk softly, but carry a big stick" manager. This will probably be a welcome change at Apple.
It will be very important that Tim Cook not screwup what Steve Jobs has built--one of the most successful product lineups in consumer electronics history. I have never seen a company, other than perhaps Procter & Gamble, dominate in so many product segments of an industry as Apple has in consumer electronics devices:
- Smartphones -- iPhone (128.9 million sold through 6/30/11)
- Portable music player - iPod (297 million sold at the end of 2010)
- Tablet computers - iPad (28.7 million as of 6/30/11)
- Music downloads - iTunes - (15 billion music downloads through 6/30/11)
- Internet TV - Google TV (500,000 users)
- Apps - Apps Store (10.9 billions apps downloaded at the end of 2010)
- Retail Stores - Apple Store (Highest gross sales per square foot)
Tim Cook (or anybody else chosen to be Apple's CEO) will never be able to fill Steve Jobs shoes, and he should not try. Steve represented the "face" of Apple, and he cast a giant shadow over Apple. He was as much the brand as was the Apple name. It's hard for me to imagine those Apple Evangelists rallying around Tim Cook or yelling with excitement, "Tim, Tim, Tim" like they did at Steve's incredible new product launch presentations.
Don't expect any immediate major changes at Apple. Tim Cook made this point very clear in the letter he wrote to the Apple staffers upon his appoint as Apple's CEO, in which he said, Apple is ‘not going to change’. Cook says that Apple will stay true to the culture that Steve created.
"Team:
I am looking forward to the amazing opportunity of serving as CEO of the most innovative company in the world. Joining Apple was the best decision I’ve ever made and it’s been the privilege of a lifetime to work for Apple and Steve for over 13 years. I share Steve’s optimism for Apple’s bright future.
Steve has been an incredible leader and mentor to me, as well as to the entire executive team and our amazing employees. We are really looking forward to Steve’s ongoing guidance and inspiration as our Chairman.
I want you to be confident that Apple is not going to change. I cherish and celebrate Apple’s unique principles and values. Steve built a company and culture that is unlike any other in the world and we are going to stay true to that—it is in our DNA. We are going to continue to make the best products in the world that delight our customers and make our employees incredibly proud of what they do.
I love Apple and I am looking forward to diving into my new role. All of the incredible support from the Board, the executive team and many of you has been inspiring. I am confident our best years lie ahead of us and that together we will continue to make Apple the magical place that it is.
Tim"
If Steve didn't believe that Tim Cook had the chops to serve as Apple's new CEO, he never would've recommended him to Apple's board of directors. The Board concurred, and was unanimous in appointing Tim to the CEO job. Let's just give Tim the benefit of the doubt. I think he will make a very good Apple CEO, but the word "great" CEO is reserved for only one man---Steve Jobs. Steve will be sorely missed.
Courtesy of an article dated August 26, 2011 appearing in The Wall Street Joutrnal, Wikipedia, and an article dated August 24, 2011 appearing in CNN Money
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