What if Tim Cook Thinks Differently?

| Analysis

There has been much ado about whether Tim Cook can step into the shoes of Steve Jobs as CEO of Apple. But the other side of the coin hasn’t been explored. How can we expect Tim Cook to put his own stamp on the corporation?

This is all speculation, but it’s speculation worth delving into. After all, Mr. Cook is is his own man with his own strengths, weaknesses and preferences. Several times, I have used the analogy of the new skipper of a ship: the new Captain won’t be the same as the old Captain, and some of the crew will be disgruntled. But the new Captain might have amazing new talents and perspectives that come to be appreciated in time.

So it seems worth speculating on how Tim Cook might go his own way and surprise us.

Tim Cook

1. Philanthropy. There has been a lot of discussion about how American companies are rolling too much money to the top — to the detriment of employees or ex-employees. Now certainly Apple pays its full-time salaried people in Cupertino well and hasn’t had any notable layoffs. Perhaps that’s an even better position from which Mr. Cook might establish a foundation for hungry American kids.

Just the interest on one billion dollars, about 1 percent of Apple’s total cash and securities holdings, would feed thousands of hungry kids each month. If Apple is loved and revered now, this move would cement that image in the minds of customers even more so and set an amazing example.

2. Content ownership. I’ve been following Apple for a long time. I always got the feeling, and rightfully so, that the focus of Steve Jobs was on design aesthetics, the user experience, and moving technology forward in ways that delight us. That’s why I think Mr. Jobs steered away from certain kinds of acquisitions. Simplicity and focus were his watchwords.

Mr. Cook on the other hand is the ultimate businessman. There are others on the executive team who are experts at the user experience: Jonathan Ive, Scott Forstall and Phil Schiller. That leaves Tim Cook free take his own direction, and that may include an analysis of the strategic positioning of Apple.

Here’s what I mean. Mr Jobs was, we all know, a bit paranoid about having enough money in the bank to tide Apple over if there were a major problem. At one point, just before the NeXT acquisition and the return of Steve Jobs in 1996, Apple almost missed payroll due to a very poor cash position. So Mr. Jobs focused on accumulating a lot of cash. That has worked out very well, as we know, in cash payments for commodity parts that has given Apple an advantage over competitors. Perhaps it’s too much cash in the estimation of some, including some analysts and General Electric’s Jeff Immelt who said (on 60 Minutes 10/9/2011) that “if companies are just going to sit on cash, they’re going to lose. Only the people who are going to invest their way through this crisis are going to win.”

All of which makes me think: can Apple do better? What is Apple missing out on? What investments might there be out there that Tim Cook might size up differently than Steve Jobs that might further strengthen Apple? One issue that comes to mind is that Apple, along with other companies, remains at the mercy of Hollywood executives.

For a long time, It was suggested that Apple, like Sony, should complement its line of consumer products with content ownership. Content is king. Content owners are ever increasingly protected by U.S. law. Content owners want great ways to deliver their content to customers, but they have not shown the taste and judgment about consumers that Apple excels in. They’ve already shown how they can wrap Netflix around the axle. Perhaps, and this his just food for thought, perhaps Tim Cook is thinking that the acquisition of Disney, and all its secondary companies, is finally the right way to invest Apple’s billions.

That’s been suggested before, but things are different now. Apple has technologies these days that they didn’t have before for content delivery: the iPad, an iPhone capable of 1080p, AirPlay, an Apple TV with iOS 5. Perhaps its own line of TVs.

I leave it to you to ponder.

3. Technology Popularization. One thing that Apple is very good at is developing new technology. But adoption rates are not often what they should be because many companies in a position to adopt them are financially conservative, focus on PCs and lack vision. We’ve seen how slowly DisplayPort percolated into displays made by other companies. We’re going through the same thing now with Thunderbolt. Accessory companies are waiting until there are enough Thunderbolt Macs out there to make it worth their while. Meanwhile, the technology lingers, customers are impatient, and observers wonder if the technology is going succeed or fail. Apple products are great, but supporting technology often doesn’t become popular fast enough.

In the past, the PC companies went their own way. Examples are eSATA, Blu-ray and USB 3. They dabbled in some Apple advanced technologies when it was a low risk, incremental business. But we’re in the post-PC era now, and consumers are less likely to lean towards technologies that will die along with the PC. That means that Apple may have to carry more of the load in developing and providing new technology accessories. In turn, that could mean more investment in (or acquisition of) certain accessory makers.

Food for Thought

All of this is just speculation. I put it forward for your consideration, not to champion any specific idea, but in order to remind us that Apple will continue to evolve as a company under a very business savvy CEO. Where Steve Jobs was the visionary, we can now, I surmise, expect to see Tim Cook focus on infrastructure that amplifies the effects of Mr. Jobs’s enduring visions. That could also include getting back to a more formal support of science and enterprise, being more vertically integrated in delivery mechanisms, an even more global approach to manufacturing and retail sales, (if that’s possible) and so on.

Apple certainly will remain a powerhouse of innovation and vision.  Even so, a different Apple CEO will mean a man who thinks differently, and the texture of Apple’s success might shift in subtle (and good) ways. We should watch for that.

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Comments

geoduck

Philanthropy
I like the idea. Or use the interest on a Bn$ to push technology into the classrooms and improve technology education. That would both help schools, and help position apple for the next generation.

Content Ownership.
It’s own recording Studio. Anyone can come in and record, the content would be on iTunes. Apple gets 30%  the musician gets the rest. That’s the kind of deal that would have acts, both major and minor, lining up at the door.

Content Ownership 2

What investments might there be out there that Tim Cook might size up differently than Steve Jobs

Well, there’s the old “buy Dell, liquidate it, and give the money back to the investors” meme. LOL
Seriously, though I am intrigued by the idea of buying Disney, I keep thinking that Apple is a Computer company. Bad things happen when a company strays too far from its roots.

Technology Popularization
This IS one area that I think Apple could do better. It has some great ideas that stay too close to home. It has the resources to make FaceTime a real competitor to Skype. It has the resources to make iWork a real contender to Office or OpenOffice. I don’t see them opening up the Cloning can-o’-worms again but I think they could get some of the other manufacturers on board with some of their technology quicker, like Thunderbird.

Content Ownership 3
For a start they could backtrack on killing web hosting when they go to iCloud. There’s one <small> group of users that have a lot of content that are happy with Apple’s existing service. If Apple wants to get into content start by not kicking this core group of dedicated users in the teeth. First do no harm.

Lancashire-Witch

I’m (only) pondering John.

In my 35+ years experience in IT I saw many Captains come and go. The bad ones outnumbered the good ones by about 5 to 1. The really, really good ones were very rare.

There’s certainly room for philanthropy.

Sitting on a mountain of cash and paying no dividend to shareholders doesn’t seem right to me.

An iPhone capable of 1080p and Apple TV capable of 720p also doesn’t seem right.

Lee Dronick

Several times, I have used the analogy of the new skipper of a ship: the new Captain won?t be the same as the old Captain, and some of the crew will be disgruntled. But the new Captain might have amazing new talents and perspectives that come to be appreciated in time.

I have quite a bit of experience with new ship Captains. Usually the new one signs a letter saying that for the time being the previous Captain’s standing orders are still in effect.  Then the new Captain reviews the orders and makes changes which may be just a few or rather drastic. Also the changes may come rather quickly or so slow that you hardly notice the difference. A lot depends on the personality of the new Captain, and how well the crew had performed their duties.

Steve Jobs has done some great things, but it is quite possible that someone else could have done even more. Anyway, Tim Cook is the new Captain and I hope, indeed expect, that he will also do some great things. Time will tell.

Lee Dronick

Well, there?s the old ?buy Dell, liquidate it, and give the money back to the investors? meme.

Buy Adobe and clean up Creative Suite, including Flash.

geoduck

Buy Adobe and clean up Creative Suite, including Flash.

Now THAT’s a good idea. After fixing the ton of problems, roll all of Adobe’s products into iCreate sold alongside iWork and iLife Apps.

EDIT: The more I think of it this, the more I think it would be brilliant. Apple would have a ‘standard’ web editing tool to replace the aging iWeb. The second class Adobe Mac products could be brought up to date. I really like the idea

Lancashire-Witch

For a start they could backtrack on killing web hosting when they go to iCloud.

+1.

The focus seems to be on sharing my stuff across all my devices. People who (only) have one Mac and want to share their stuff with friends and relatives must feel really left out.

Lee Dronick

Now THAT?s a good idea. After fixing the ton of problems, roll all of Adobe?s products into iCreate sold alongside iWork and iLife Apps.

EDIT: The more I think of it this, the more I think it would be brilliant. Apple would have a ?standard? web editing tool to replace the aging iWeb. The second class Adobe Mac products could be brought up to date. I really like the idea

Continue to sell and support Windows versions, but make the OSX ones so much better.

Black_Dog

One of the things that Steve Jobs was very clear about ? at least after his return ? was that Apple is very good at some things and not so good at others. He was disciplined about keeping the company away from temptations to diversify into areas for which it had low competency and focusing their efforts into the realms where they can achieve greatness. Jobs was very content to partner and outsource aspects of the business that were outside of the company?s core competency. The folly of most companies is that after initial success they think they can do anything.

I would hope that Tim Cook has the good sense NOT to get into areas that are not part of Apple?s core competency such as content ownership or acquiring other companies for the sake of growth or because they become self-conscious about having too much cash. There is no imperative that he ?put his own stamp on the corporation.? He just needs to be the best Tim Cook he can be while honoring the guiding values that made the company great. If he does that he will be regarded as a great success.

Ross Edwards

Philanthropy:
Disagree.  Jobs had it right: The problem with philanthropy is that an awful lot of the time you can’t measure whether it was worth the money. 

Local-level charity tends to be very good at this (as neighbors and community figures are accountable to one another directly) while global charity tends to be very poor and exists now mainly to establish sinecures for social metaphysicians at the expense of the guilt-ridden rich. 

How many billions has Bill Gates pumped into central Africa, and with what to show for it?  For what he has spent, he could have just flown the African villagers to Washington, bought some acreage a couple hours outside of Redmond, and built homes there so they could start new safe and healthy lives.  It really is that much of a money sink.  But now they can’t reverse course without killing their own credibility. 

No, Apple can steer clear of all that and keep doing what it is doing: creating products that improve peoples’ lives, saving them time and money on the user side, and creating an entire industry worth of design, development, marketing, and retail jobs (to name only a few of the jobs thus created), altogether stimulating the flow of untold trillions of dollars of economic activity, and as each economic and productivity improvement cascades into other activities and pursuits, raising the standard of living of the entire world in the process.  The “Michael Jackson at Mt. Everest” story comes to mind.  It is not an accident.

Paradoxical as it may seem at first glance, the work Steve Jobs and Apple did for their own profit is more likely, in the long run, to improve the lives of those African villagers than all the cash money that Bill Gates and his foundation collected to throw at them directly.

John Martellaro

Black_Dog.  Of course, you’ve summarized the conventional wisdom.  But when Tim Cook, after scheming with his executive team, goes off and does something simply brilliant that violates the conventional wisdom, we’ll all think, “Why didn’t we think of that?”

cb50dc

Your captain/crew disgruntled analogy fits well, and the “Food for Thought” encapsulates pretty much the rest. Some of us will love almost everything Apple does from here on, some of us will spend the rest of our lives muttering, “It’s not like it was in 2000-2011,” and the rest of us will have some of each.

Just FTR, keep in mind that not everything Steve’s overseen has been uber-incredible-magnificent. Major example: right now the Mac community have a LOT of concerns about Lion. I don’t think I’ve ever heard so many complaints about so many glitches and/or missing/changed features, and so many avid Apple fans holding off from switching.

That’s nothing trivial, to have such ambivalence regarding the friggin’ OS.

furbies

Mr Cook has been with Apple for how long ?
Maybe we’ve seen his handiwork, but ascribed it to Mr Jobs ?

As for the cash hoard, maybe Apple’s been using it to keep predators away ? Mind you if I was lucky enough to own shares in APPL, I’d like a slice of the profits too….

matt_s

#3, above, is way off the mark when it comes to T-Bolt.

Thunderbolt is not gaining traction via a vast array of products from a wide spectrum of vendors because Intel refuses to release the spec & make silicon readily available to all customers.

If your firm is on Intel’s heavy-hitters list & commits to millions of units, you can get the firmware, technical assistance & access to the chips. If you’re not, forget it.

xmattingly

Last night (ok, early this morning) during another nasty bout of insomnia, I was browsing through some old All Things Digital Jobs interviews, and watched the better part of his last one. He mentioned purchasing Siri for their expertise with AI (and Apple’s enthusiasm for it)... with the iPhone 4S fresh in memory, MAN, was that a punch in the face!

If you can forgive the run-on sentences, my contention is that Apple will not - and should not - make purchases that do not complement their agenda. I’d like to see Apple buy Adobe outright and decrapify their whole portfolio, but seriously - how advantageous would that be for them?

And I would LOVE to see Apple develop their own professional content creation suite; especially since Adobe no longer has a direct competitor. But I know that won’t happen either.

Lee Dronick

I?d like to see Apple buy Adobe outright and decrapify their whole portfolio, but seriously - how advantageous would that be for them?

If the cleaned up version was OSX only then it would, or may, help sell Macs. Keep the current Windows version as is except for maintenance updates.

And I would LOVE to see Apple develop their own professional content creation suiteespecially since Adobe no longer has a direct competitorBut I know that won?t happen either

The certainly have the chops to do it. I think that it is a political move to help keep 3rd party developers publishing Mac software.

instig8r

What Apple needs to do is to buy Intuit and force them to finally come out with a decent OS X version of QuickBooks. Small business adoption of the Mac will skyrocket! It is the single biggest reason why small business clings to their PCs: just to be able to use the software their accountant tells them to use. The Mac version is not compatible with the PC version, is not multi-user and is feature-impaired, aside from the myriad other ways it sucks wind.

Apple board member Bill Campbell, friend of Steve, former head of Claris and Apple employee who later became CEO of Intuit and is now the chairman or their board, ought to be ashamed of himself for allowing that travesty out the door for the last decade. Can’t understand why Steve never took him to account for producing such an anti-Apple product, like he did Google’s mole, Eric Schmidt!

wab95

Interesting rumination, John.

Just a quick thought. Someone with Tim Cook’s business acumen is no doubt sensitive to the potential impact of thinking too differently too soon in a company that has just lost arguably one of the most successful CEOs in history, certainly while the company is enjoying practically unrivalled success on multiple fronts. He will not want to give Wall Street jitters by signalling change that it cannot understand.

Despite the fact that Apple epitomises change and thinking ‘different’, and innovation being the agent of change whereby it propels itself and its clients forward while disrupting whole industries, Wall Street’s instincts are conservative. They will want to see Apple stay the course (without having a clue that for Apple, that means ‘innovate’, ‘surprise’, and ‘disrupt’ without apology), and will want to see in Cook a safe pair of hands, at least in near term. Any change that signals new direction too soon, and the Street could get spooked, and rob Apple of the very capital it needs to open new vistas (no reference to MS).

I suggest that it is a delicate balance between providing assurance to the Street, on the one hand, and incrementally but steadily and with gathering pace, exploring new directions, on the other,  that will keep the majority of Apple’s current support base in place, while allowing it to do what it does best; innovate, surprise, disrupt.

Incidentally, I think the ship’s captain analogy is spot on.

geoduck

OK here’s a bit of a contrarian point of view. Tim Cook has effectively been CEO since the first of the year. In that time we’ve seen

FinalCutX released without many features including a lack of backwards compatibility.
iCloud announced without a number of key functions like web hosting.
Lion released to great fanfare but on second look a number of higher level features either hidden or missing.
Siri announced but only for theiPhone4S. The older limited App is being disabled and there is no mention of Siri for iPad which shares the same hardware as the 4S.
Yesterday there was an article on TMO that described a change to AppleCare. The core being a significant reduction in the power of Genius Bar staff to do what’s needed to make the customer happy.

There is a small but dedicated community of users that use MobileMe web hosting a lot. Why kick them in the teeth?
There is a small but dedicated group of FinalCut Pro users. Why put out something that makes their life harder?
There is a significant number of long time Mac users that can make their Macs sing and dance. Why make it harder for them to show off how great the Mac is?
There are a large number of people with iPad2s. Why demand they buy a new phone to get Siri?
Apple has a reputation for great customer service. Why cripple the Genius’s ability to do that?

A lot of these decisions might make business sense but I see a turning away from the core group of Apple and Mac fans that kept the company alive through the dark years. A step away from the customer is king attitude to a more typical corporate profit is king stance. I fear we may be seeing Tim Cook’s version of ‘Thinking Differently”. If so I’m not sure I like it.

Black_Dog

Black_Dog.  Of course, you?ve summarized the conventional wisdom.  But when Tim Cook, after scheming with his executive team, goes off and does something simply brilliant that violates the conventional wisdom, we?ll all think, ?Why didn?t we think of that??

I agree. To a point. Part of the ?honoring the guiding values that made the company great? that I mentioned is to do new and great things that no one else has thought of. It?s Apple?s MO. If they stay static they die.

But pursuing change or growth for the sake of a new CEO trying to make his own mark on the world (i.e. vanity), for the sake of just trying to get bigger (i.e. vanity), or they think they can do anything, such as becoming a content owner, because they were successful with certain personal electronics products (i.e. vanity), is folly.

Apple will remain great if it continues to pursue creating cutting edge products within the area of their core competency. Steve Jobs looks like a genius because he stuck to what he knew he and the folks at Apple could do better than anyone else in the world.

John Martellaro

Black_Dog: I agree.  There was no timeline associated with my article, and in accordance with the naval analogy, the best short-term advice for Mr. Cook is probably, “Steady as she goes.”

wab95

John:

Last night I posted my earlier comment somewhat hastily, and this morning I thought to make clear the points I was aiming for.

To be clear, Tim Cook and company, no less than Apple, Inc., already have the confidence of the market and the consumer, and apparently even the enterprise sector. Many of the developments in recent years no doubt owe their substance to Mr Cook and team, however they still occurred under Steve Jobs’ watch, and no doubt got his blessing if not input. Indeed, over the next two to three years, any developments coming out of Apple will probably benefit from that same Steve Jobs halo effect, of having been endorsed by Steve.

That said, Tim Cook and the current senior Apple leadership do not have to worry about confidence and support, at least in my view, rather their challenge is to take their first steps, in the post-Jobs era, without shaking confidence, particularly that of investors.

I submit that there are at least two ways of doing this.

First, make the first forays into areas that the Street understands; iPhone 5, iPad 3, iOS refinements, OS X updates, etc, and get some successes here. From there, take bolder albeit thematically recognisable steps (things that have been associated with unfinished or ongoing business by Apple), e.g. Apple TV (just an example, not a suggestion). Should they successfully accomplish these initial moves, and there is no reason to believe they would not, Tim Cook and Apple’s senior leadership will further cement investor and consumer confidence. This will buy them the capital for bold moves and radical new directions, products and services (e.g. the example of purchasing Disney, not that I suggest this).

Second, no one expects Tim Cook to be Steve Jobs, as you infer above, nor necessarily the entire team to be Steve Jobs, nor do they need to, nor is that necessary. They have what they need to be industry leaders. Rather, they need to be seen as a team, each contributing their particular expertise, albeit under Cook’s leadership. The more Apple can demonstrate that they are a well-oiled, battle-hardened, seasoned and unreasonably talented team, working in concert, they will not only inspire confidence, but undoubtedly garner further success.

Obviously, they need to continue innovating under Tim Cook’s stewardship, or captaincy, or they will sooner than later be deemed moribund. Rather my point is about retaining and augmenting consumer, and especially investor, confidence.

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