Tim Cook Is a Failure at Operations

Apple China flag

The Myth of Tim Cook’s Operational Prowess

Operations are supposed to be what Tim Cook does best. Under Steve Jobs he was the Chief Operating Officer at Apple. And while he may have done a great job then, he is a failure at it as CEO.

There are two reasons you have to conclude he is awful at operations. First, he has failed to keep the trains (i.e., products) running on time. Secondly and most importantly, he has placed all his operational eggs (i.e., main sources of production revenue) in one hostile, communist Chinese basket.

Apple China flag
Apple in China

Late Trains

With regard to keeping products running on time, under Tim Cook, the MacBook Air (one of its most popular machines) was not updated in over 3 years, the Mac mini was not updated in over 4 years, and at over 5 years with still no update to the Mac Pro. The MacBook and iMac haven’t been updated in more than 1.5 years. The iPad mini hasn’t been updated in almost 2 years.

HomePods, beyond being 3 years late relative to Amazon, missed an important holiday season ceding more ground to other smart speakers. AirPods availability came late and is still constrained. AirPower was announced in 2017 and is still vapor.

Apple has basically abandoned and/or lobotomized much of its software in not providing meaningful feature upgrades in years; iTunes is a joke, iWork has had minimal updates (e.g., still cannot do basic word processing functions like table of authorities, line numbering, custom paragraph numbers, etc.), Aperture is dead, Back-to-Mac is dead, Airport Utility was lobotomized, and that’s just the tip of the iceberg.

To put that in context, with Steve Jobs in 2007 they spent $0.78B on R&D and they updated almost all software (some very substantially), updated iPods, Macs, oh yea, and they released the iPhone. In 2018, Apple had the above track record while spending over 18X on R&D, i.e., $14.24B. This is simply an awful track record for a company with as many resources as Apple. At this point, I believe Apple’s new unofficial motto is “doing less and less with more and more“.

One Hostile Chinese Basket

Perhaps the most damning failure of operations at Apple are putting essentially all of its operations into a single basket, namely China. Apple is one patent injunction away from not being able to manufacture any iPhones. Let that sink in. One well placed patent infringement lawsuit where an injunction is held over some common iOS software element, or iPhone hardware subcomponent, and it’s game over. Curtains. An injunction would stop Apple from making, using, or selling iPhones in China.

While China itself only represents roughly 20% of Apple’s revenue, and therefore a sales ban in China is something Apple could easily survive, it could also be stopped from making iPhones for export. That would be a company-ending event should it ever transpire.

And we’re talking about China. It’s a communist regime that is only slightly less hostile to Apple and foreign companies than it is to the human rights of its own citizenry. Which means maybe an injunction against the iPhone would be found on the merits, or it might be found because of political expediency, or just because of outright hostility towards the West. Relying solely on such a regime for all its iPhone production is simply reckless.

And this is not theoretical. Qualcomm has effectively gotten a patent injunction in Germany on iPhone 7/8 models by putting up a bond, and is pushing for broader bans in both Germany and China.

Cook Needs a Plan B, US iPhone Manufacturing

Although Steve Jobs himself brought Tim Cook to Apple to help move operations abroad, that does not excuse Tim Cook’s bad judgement on having China remain the sole source of iPhone assembly.

To be mildly kind to Mr. Cook and Apple, it has a Cork Ireland plant, which basically is a supply coordination and service hub more than a manufacturing center. And then there is the tiny plant in Austin Texas producing what must be a break neck production schedule of at least 3 trashcan Mac Pros per month.

In the 8 or so years since Cook has been CEO, he should have formulated—and implemented—a real Plan B, C and D for iPhone production. He should have a US manufacturing plant making iPhones, even if it’s only 5% of the supply. He should put one in eastern Europe. One in South America. He should have diversified production. He should have advanced automation to make this less of a cost issue, much like Foxconn itself has done. Apple has all the money, it can afford to try anything Foxconn can. There is no excuse for not trying to advance manufacturing at home.

And, there is no excuse for the precarious state that Tim Cook has situated Apple in, i.e., relying on the ‘kindness’ and subject to the capricious whims of a hostile communist state.

39 thoughts on “Tim Cook Is a Failure at Operations

  • https://www.macobserver.com/news/apple-speeds-up-plans-to-move-production-away-from-china/#comment-96187

    Year’s late and he’s still incompetent. Not learning anything. Moving from one hostile communist regime, to another, Vietnam. And also into India, that is so corrupt they mobster style nationalize companies asking to be “partners”. And yet STILL doing absolutely no iPhone assembly in the US. Not even a little bit.

    Tim Cook is STILL a failure at operations.

  • i can applaud cook for diversifying let’s call it 10% of production of of China into India and yet another hostile communist country, Vietnam. But he hasn’t bothered to bring even 1 or 2% into the US. Cook is still a failure at business school rule 101, diversification.

    Apple is still one Chinese patent litigation, one natural disaster, one wrong pandemic away from essentially halting all iPhone production in China. He’s done many things well, vision not among them, but after seeing patent litigations and Covid bring production to a near halt, that he has still not moved to better rebalance production, and at least brought 1-2% of production back to the US makes him an utter failure at his job.

  • Reviving comments here, now that Jeff Williams is back in the spotlight as head design honcho. Williams has been Chief Operating Officer over the timeframe of this article and ACTUALLY responsible for operations failures rightly attributed to (the buck stops here & he built his reputation on operations) Tim Cook in the article.

    Jeff presided over these failures and likely any decisions about diversifying manufacturing countries (or not). Now that Jeff has an offsider nominally in charge of operations and the trade war has forced a new approach, perhaps we’ll see more trains running on time??

    Or will we see more of the same? Is this the operational focus that supposedly drove Jony Ive away? Personally I think he just had too much of a burden carrying the Jobs product-torch as well as design and just got worn out. But there’s smoke around criticisms of operations focus which we cannot ignore.

    We’ve had 4 years of the 6 iPhone design, and it looks like 4 years of the 10 iPhone design. This is not the 2 year tick-tock cycle of old, and certainly smacks of the operational-new. Like the Mac product line before it, Apple’s not innovating iPhone design and suffering sales drops because of it. In the old days, if you didn’t like an iPhone design, you only had to wait at most 2 years for a new one. These days it’s 4 years, and as someone who doesn’t like the 10 design, my 6Plus is desperately in need of an upgrade, but I can’t see an upgrade on offer. I primarily use my phone to show people photos and all the new screens show my photos smaller, not as bright, with a worse viewing angle, and in the case of XR it has a “longer” screen with less pixels than my 5 year old phone!

    With the death of iPhone sales, Apple suddenly discovered Mac. It’s going to take a while to fix Mac issues, mostly with the most popular model, MacBook Pro. I don’t think it’s a coincidence that the week a rumour surfaces that MacBook Pro keyboards are going back to scissor switches and the problems have been fixed, is the week Ive announces he’s leaving Apple. I believe he was on his way out and the keyboard issue arose and he was pulled back in to fix it.

    There seems to be a new focus on Mac. iPhone has gone on to the back-burner of ‘mature’ product. We can see from Apple’s desperate trade-in offers that one of the big reasons iPhone sales are down is because current owners are loyal, but waiting to upgrade, whether it be price or features deterring them, both of these factors are under Apple’s control. Apple has made certain decisions about this for iPhone, and despite it not working for Mac, Apple is still going to send iPhone down the road of less design innovation, higher prices and be surprised at lack of sales.

    Perhaps the laser focus (some see it as an inability of Apple management to work on more than one thing at a time) has moved to Services and devices will get just enough updates to support the services Apple wants to sell. Won’t that be fun?

  • Wow – this could be a first! A TMO article gets the Macalope treatment!


    I agree with many of the criticisms made by John, but like the Macalope I don’t believe all of them are Tim Cook’s fault. In ANY big organization (like the Apple of today vs the Apple of the past), there is some level of dysfunction, poor coordination, etc. Look at the US govt for the best example, or any large bureaucracy. The Macalope’s conclusion, that Apple still does execute much better than any other large org of similar size, is probably true.

    1. I love that I made the Macalope let loose its bowels prior to taking its pants off. Nothing like bringing MacWorld down into a sniveling incoherent mess while in the end being forced to agree.

  • More sage comment from Mr Kheit. We need this in the Mac echo chamber. Sculley grew Apple to 10x the size it was when he joined. Cook has done similarly, but may befall the same fate if he can’t change with conditions. China might have been a good idea at the time, but things change. China has changed. The world economy has changed. Manufacturing needs to diversify and the signs are too little too late.

    John is completely correct. Apple has stumbled with the fundamentals of a tech company. Yearly updates were a luxury Apple could afford because it had no Mac competitors. There’s a lot of “the Mac division is as big as a Fortune-n company alone”, but it is not treated like one and it doesn’t behave like one. A PC manufacturer that didn’t update products at least yearly would be out of business. Cook allowed iPhone to carry the shortcomings of management of the rest of the company… until iPhone growth slowed, and now puts it hopes in recurring subscriptions at a time when the world economy is facing a massive downturn. This strategy is dubious, and does not augur well for customers of Mac or even iPhone now!

    Witness 4 years of iPhone 6 when the-one-clever-trick is updating the form factor. There was a boost for Xphone, given flattening sales and 20% yearly price hikes, but as Ben Thompson pointed out, once again, just as Apple assumed the 6S would sell even better but didn’t, XS didn’t sell better and Apple missed its guidance, Apple’s holy grail of performance.

    There’s a lot of talk of ‘a new form factor iPhone in 2019’ to boost sales again. What if it’s not? What if it’s 4 years of iPhone X, like it was with the 6? Now tell me how clever Tim Cook is looking?

    Cook does well to build Apple’s brand taking a stance on human rights and the environment, in the face of failure-to-ship, but at some stage, Cook has to ship.

    Apple’s strength was always “services” in the form of industry leading software on the tangible sales of hardware. Putting all eggs in the services basket, without hardware to back it up, will be Cook’s undoing. Tough times ahead, but with any luck, a leader will arise with an understanding of Apple’s hardware fundamentals. It won’t be easy. Apple changed publishing and the creative arts with its hardware fundamentals, but Apple has long since abandoned big-picture disruption and leadership. But can do it again with the right focus.

    More Kheit, please TMO.

  • John:

    You’ve opened a great discussion, making a number of excellent points, most with which I agree regarding ‘late trains’ of products not ‘running on time’, the potential vulnerability of Apple’s iPhone manufacturing operations in China, and the value of having a more widely distributed manufacturing theatre beyond China.

    On that point, however, and before proceeding further, it’s worth noting that while Foxconn have factories in China, Foxconn itself is a Taiwanese multinational corporation, and not Chinese. And while you have not stated otherwise, it would be easy to assume that, because there are Foxconn factories in China, that Foxconn is under Chinese dominion, or that, like Huawei, which the international intelligence community have all but labelled as a commercial front for Chinese military intelligence, Foxconn take their marching orders from the Chinese Communist Party. Nothing could be further from the truth. Indeed, to even suggest that Foxconn is a Chinese concern is to repeat a trope from the Communist Party, that Taiwan is China. That Taiwan and Terry Gou, Foxconn’s CEO, is not Chinese is a principal reason why, if China could have pulled that trigger of shuttering Apple operations, it would already have done so.

    Shutting down Foxconn operations, even if only Apple-related, would be a gun that could just as easily explode in China’s face as it could fire a bullet at China’s enemies, if only the legal challenges alone, but there’s more. There are 12 factories in China (mainly in Shenzhen province near Hong Kong) employing some 1.3M Chinese workers, making Foxconn China’s largest private employer. That would precipitate a massive infusion of unemployment into the Chinese economy at a time when China may already have entered a recession, triggering something that the Chinese Communist Party hates even more than it does the Japanese, instability. Their government is maniacally obsessed with maintaining sociopolitical and economic stability, which is the rationale for their stranglehold on freedom of expression, information and disregard for human rights. Rather, they’ve done what they can, namely forbid the use of Apple products by government employees and appealed to Chinese patriotism against foreign imperialism by boycotting Apple products (but keep our employees working, please). Your point is well taken, however Foxconn’s manufacturing theatre, and therefore Apple’s, already extend beyond China to Thailand, Malaysia, the Czech Republic, South Korea, Singapore, the Philippines, and now a plant (albeit mainly for display manufacture) is being built in the USA (Wisconsin), thus limiting Apple’s immediate exposure. Still, there is room for improvement.

    The argument of your thesis is sound, however it rests on two implicit but critical assumptions, neither of which you’ve addressed or substantiated. The first is that Apple’s current operations reflect Tim Cook’s prowess. The second is that ‘keeping the trains running’ on Apple’s legacy products is a corporate priority, de facto or de jure. Let’s examine both, and in the spirit of your column’s title, let me play your devil’s advocate and argue that neither of these assumptions are true.

    Regarding Tim Cook’s operational prowess; as you’ve noted, under SJ he did a great job. Indeed, without TC’s operational wizardry, SJ’s Apple could not have achieved market dominance. TC’s operational prowess, therefore, is not myth but fact. That Apple’s operational performance has dramatically changed coincident with TC’s titular change is evidence, if anything, that he no longer directs operations. In the spirit of ‘the buck stops here’, he is ultimately responsible for operational performance, but that applies to everything else Apple (remember the Apple Maps kerfuffle?). In systems analysis, whenever we observe a sudden performance change, we look for changes within the system, external to the system, or some combination thereof. The internal change is obvious and public; TC has been removed from and no longer sweats the details of operations, nor would we want him to. Why not? That leads us to your second implicit assumption.

    Is ‘keeping the trains running’ on legacy products even a priority for Apple? Evidence, and history (more on that below), indicate ‘No’. In fact, given the substantial changes in the tech landscape, were this Apple’s priority, we should be worried. It would suggest that Apple’s CEO is preoccupied with simple management, merely riding his predecessor’s legacy momentum, at a time when Apple need to be innovating for the future.

    John Stoll of the WSJ published an article on Friday 11 January https://www.wsj.com/articles/polaroid-walkman-palm-pilot-iphone-11547208002 asserting the imperative for Apple to innovate the next big thing soon, or risk the fate of Kodak, Nokia, Polaroid, Sears and others that failed to evolve in the face of change. Indeed, he notes that TC’S legacy depends upon how well he manages Apple’s next innovation, not on how well he maintains Apple’s present staple. This is merely one of a plethora of such editorials by investors, the market, pundits and competitors.

    Is there evidence that Apple are putting their emphasis on new innovation? Yes. You’ve cited a an 18-fold increase in R&D, shipped products notwithstanding. TC has announced that Apple will be making an announcement about healthcare services this year (see John M’s PD https://www.macobserver.com/columns-opinions/particle-debris/health-monitoring-change-face-of-apple/?utm_campaign=tmo_home_sidebar) and stated that, in future, Apple will be known more for their contribution to healthcare than for their ‘sleek gadgets’. In short, Apple are moving on, attempting to evolve. Evolution is hard, which is why over 99% of all species that have ever existed are extinct. There is no guarantee of Apple’s success, but they have to try.

    Would moving on result in deprecating legacy product refresh cycles? Would this behaviour be consistent for Apple? If past is prologue, then ‘Yes’. As Walter Isaacson notes in his SJ biography, whenever SJ turned his attention to the next thing, eg the Macintosh, legacy products were left fallow, eg the Apple II, or iPod for iPhone; and he unapologetically never looked back. This is core corporate culture.

    In sum, TC is not doing operations, and Apple are not prioritising legacy products. They’re moving on to something new, and this is consistent with Apple’s culture and DNA. We may disagree with Apple, and not for the first, they don’t care; we’re free to disembark this train at anytime. They’re focussed, as they should be, on the imperative to evolve or to die trying.

    1. Beautiful and thoughtful response. You expressed this a million times better than I could have. Thanks. Kheit clearly does not understand the politics of China or the realities of Apple’s growth and forwards direction.

    2. Thanks for the response wab.

      That Foxxcon is Taiwanese doesnt matter. It wouldnt matter if it were American. What matters is it assembles iPhones in the choke point of China where a single injunction wipes out all of Apple’s ability to produce iPhones for the entire world. That you don’t get that China has dominion over everything on its soil shows a serious lack of understanding of how things work in China, much less IP law. All the handwaving in the world doesnt stop that.

      Further, you have a fallacious premise. That stopping the manufacture of iPhones would somehow require closing all factories. This is easily debunked. https://gbtimes.com/apples-market-share-in-china-shrinks-in-q2 Apple makes only 12.5% of smartphones in China, and the Chinese government is in a propaganda push to make apple marketshare sink even more at the expense of its domestic Chinese brands. https://appleinsider.com/articles/18/12/24/apple-boycott-by-chinese-firms-in-support-of-huawei-is-escalating

      That not keeping products running on time for a company that constantly is criticized for being a one product wonder (iphone company) and having its stock hammered for the same is a judgement left to the CEO. An with regard to his operational prowess, by not hiring or replacing the COO to keep trains running on time, it ultimately falls on to Cook. All of it ultimately rests on the CEOs shoulders, the buck stops there, and he’s had years to notice and/fix these things.

      Also, you avoid the self fulfilling prophecy part of the problem. If you dont pay attention to part of your product line and deprecate it, people tend to not buy it. As Bryan Chaffin noted many times, Apple has this one weird trick to goose Mac sales; they update it.

      Lastly, I also noted several non-Mac products that are also ignored or ran late, that you conveniently ignored.

      As for their being focused, Tim Cook approved that Phil Schiller basically names their flagship products with no thought or meaning, just randomly after fast cars. Yea, with focus like that, the result is a John Sculley with a bigger bankroll.

      1. Interesting response.

        I agree with your objections.

        However, you object to an argument that I was not making.

    3. Excellent thoughts.
      Quick reply to the China part of your comments. ALL Chinese corporations are joint Chinese government / Taiwanese companies. Don’t be fooled by the politics. Foxconn will only exist in China for as long as the government allows it and the price will be co-operation. Try not to get caught up in the US propaganda and the trade war.

      1. Many thanks, gGrant. I’ve spent enough time in the region to fully appreciate your point. I just wanted to underscore the China/Taiwan dynamic.

      2. As someone who’s been living in Taiwan for years – in Nankan, right down the road from Foxconn and major semiconductor factories – I too was a bit taken aback at the aggressive ignorance of equating “Taiwan” with “China”. Your rebuttal was eloquent, but has obviously fallen on deaf ears.

        If Tim Cook’s tenure is a failure, I’d sure like to have had a chance to see the alternate reality of what success looks like lol.

        Fortunately there are tech writers who are experts in macroeconomics to help us see the light. /eye roll

      3. And by your lack of logic, I guess Sculley was terrific because sales went up after his genius decision to oust Steve Jobs. That went well.

        Maybe you should check for Coronavirus with that eye tick.

    4. Very late to the Reply. But there are a few things that is out of context.

      Steve like to pull all resources on to the next big thing. One because Apple is small and has limited resources, and second being Apple was never really financially stable. They were not IBM or Microsoft. Hence Steve Jobs’s word where he likes to have hundred billions cash just in case of the next big thing or big failure. And Mac, iPod, iPhone were all obvious next big thing target. This isn’t with the benefits of hindsight. None of them were first to come to the market. But they were arguably the best. Except this time it is different. There are no next big thing any more. Not Cars, Not TV, Not AR. There might not be another thing as big as iPhone. Where the TAM is every single person on the planet. Hence focusing on the next big thing and neglect the current product range is entirely the fault of the CEO not capable of understand the product And Steve did explicitly mention Tim Cook is not a Product Person.

  • John Kheit, I assume this is satire?

    You have some good points about how slow Apple is to develop or update. But please point to a US city that has the ability to produce 200 million iPhones a year. Apple’s partners have more than 200,000 people on iPhone / iPad assembly lines in Shenzhen, China alone, which also happens to be one of the busiest ports in the world. Those same employees work 50 hours a week and for a roughly 60% a US worker would expect. Please explain how Apple could 1) establish a mega factory in a US major port with equivalent supply chain infrastructure to consistently provide locally made components and materials, 2) hire the equivalent of 250,000 SKILLED employees (working 40 hours per week, would need more people to equal labor hours), 3) maintain iPhone costs or margins on the near 50% increase in labor cost for 250,000 people and the dramatic increase in site development and acquisition costs.

    I like the overarching point you are making, but it is clear you do not understand the macro-economics of Apple’s situation or the reality on the ground in China. I’ve lived in Shanghai for 8 years, with extensive travels and business connections. Your rhetoric about China is a hangover from the 1980’s and a great mischaracterization of the country. Yes the country is a top down and tightly controlled society. However, their people are prospering, happy, healthy, well educated, and fundamentally free. Regardless what you think about the country, at least they do not blow each other away at schools, churches, night clubs or music concerts.

    As for injunctions that could “shut down” Apple, that would be a self inflicted would to destroy the economy of their 2nd and 3rd largest economic zones. The impact of that loss to Shenzhen and Hong Kong would be catastrophic to their own economy.

    1. Falicious premise, ie its all in America or all in China. Other options exist. 3 points all in the article with cites.

      First even if Apple produces only 5% domestically, something is better than nothing. Secondly, Foxconn has an entire factory that is so automated it works with lights off, apple can do that too, and they can do it domestically and around the world. Third, multiple plants around the world so at least parts of its production, say 20%, are not China based. All are highly realistic. Further, by implanting such small plants, they naturally would have grown further local competence over the last 7 years.

      As for injunctions, they are political and court driven. Further, Chinese vendors would love to fill the gap of apples small volume (for China) smartphone production and have apple gone. At this point China probably wins more than it loses having apple gone. They only win now with new feature IP theft more than production volume.

      Thanks for playing.

      1. “Thanks for playing.” Very professional of you and for being unnecessarily rude, -1 reader.

        Otherwise, you are welcome to backseat drive and call Apple whatever you want, but many of us have very happily watched the company grow from six billion a YEAR in revenue to 265.6 billion in less than 2 decades, more than half under Tim’s leadership as he was running the company long before Steve and the board officially had hime appointed CEO. My stock has increased from $1.74 per share (post 7:1 split value) to $152 today. There is not a company in the world that does not envy or would not want to be or take over Apple. You simply can’t call Tim a failure at “operations”. It is the goal of operations management to maximize efficiency, which he has done so to an insane level. Slow product updates and centralized mass production is the epitome of operational efficiency as it drastically reduces cost of and maximizes profit. Most of what you present, is better suited to saying Tim has failed to marginalize risk, to which, I would agree.

        Unlike you, I’m not going to sign off with a rude jab, so have a great day instead.

      2. I think the OP has very good points about what’s wrong with the big picture. The way you talk about your stocks is WHY everything is wrong with Apple, exactly how the MacRumors ‘Apple defenders’ behave. This is the exact attitude of ‘ Apple, make me money, screw product integrity! ‘. As I’ve said in one other post, I’m not a shareholder and I don’t care about the stocks or the valuation. All I care about is product integrity and practicality. What the OP is talking about is what’s happening underneath the hood, NOT how much Apple’s worth or how profitable Cook made the company to be. Apple worries too much about it’s image and less on the products.
        If you think Cook is a genius, then enlighten me WHY did he allow the original iPad Pro to have the Pencil charge at the port and not go magnetic with flat edges in the first place like Microsoft did, which was actually the RIGHT approach? What Apple did was arrogant. There’s a lot of decisions that I question the company on and everything starts at the very TOP. How he carries himself and behaves permeates across company-wide.
        I warned the MacRumors ‘Cook Lovers’ that he was the wrong guy several years ago. Look at what’s happening right now. I called it and they didn’t listen. They should’ve had a new CEO already by NOW. Satya Nadella is running circles around Cook.
        Cook’s biggest mistake was to dismiss the Surface Pro as a hybrid which proves that Apple was taken off guard as a blind spot. It’s like the Jedi Council was blind to the Sith and fell because of their arrogance by not getting off their ‘high horse’. It’s bizarre that Craig Federighi has been with Apple a LOT longer than Cook and he wasn’t promoted to CEO. He’s the closest thing you can get to someone who gets the Apple ‘culture’ of making good products. Phil, Jony, Angela, Williams and Cue are NOT it. They don’t have the ‘it’ factor.
        Of course, I have the original iPad Pro but that doesn’t mean I’m going to buy the new one because it’s overkill. The 12.9 size is nice but they should’ve gone with 17 inches in tabloid so that designers/creatives can work to actual product scale and draw from the shoulder instead of the wrist ( one reason why Jony Ive should’ve known better as a creative himself! ).
        I heard from one poster, a few years back, that Jobs supposedly wanted someone outside the company to replace him and he had someone in mind but it wasn’t revealed who ( I have a theory who it is though) , but the Board of Directors told him to use someone internally which led to Cook as the next best option, NOT the only option.
        The big picture is that Apple is going to get screwed if they don’t do something about it. It all starts at the TOP. It needs a regime change to steer the ship to the right direction. Talking about price hikes or sticking with the game plan is not going to help. Cook needs a massive kick in the a—.

    2. The core of the piece is that Apple has all its eggs in one basket. Maybe it isn’t China that does it. Maybe the US imposes a 50-100% tariff on all products from China, including Apple’s. It has already been threatened. There’s a lot of grumbling with the iPhoneXS starting at $1000. What will happens to Apple’s sales if it goes to $2000. If the new MacMini starts at $1500? It would be far better to split up production, some in China, some in the US, some in Brazil, Germany, India, and elsewhere. Then Apple would be far more resilient to political temper tantrums.

      The second point echoes something Kheit wrote about a couple of years ago. Apple R&D is costing more but producing less. For what they are investing Apple SHOULD be able to update Macs every year, phones every year, and produce new products.

  • I think the guy who put Jony Ive in charge of software is not the guy to run Apple. Business is business but a company like Apple needs a bit of magic as well, otherwise it’s just another Microsoft. I went back to an old iPod Touch the other day and was blown away by how simple it was to use, how easy the UI was on the eye, how light and comfortable it was to handle, and it had a 3.5mm jack to plug my headphones into. Apple has been accelerating off down a dark freeway with no-one questioning the destination for way too many years. Making money is not the measure of a company it is only one angle on things. Thanks John, we need more people pointing out the Emperor’s lack of clothes.

  • After some thought, may I suggest one slight modification to your thesis.

    Everything has a best-buy date. The P-51 was a fantastic fighter, in its prime, but it had to be retired. Michael Jordan was an incredible player, in his prime, but at some point he had to retire. Tim Conway was a great comedian and improv actor, but he doesn’t appear any more. He’s past his prime.

    Shall we agree that Tim Cook WAS a brilliant operations and supply chain expert. Jobs asked him to join Apple because he was so good. When Jobs had to retire he chose Cook to succeed him because he had proven himself to be exceptional. Cook was great, he was the Michael Jordan of Operations and Supply Chain.

    But Cook has been at Apple for 20 years and CEO for 7. He’s been in the spotlight, on the firing line for all that time. I’m willing to say Cook was brilliant, he was the man Apple needed at the time. However, he’s tired. Call it age (though he’s 58, the same age as me.). Call it battle fatigue. Call it whatever you want. but it is time.

    Apple needs to replace Cook, not because he’s bad, but because he’s not at his prime. He’s Jordan playing for the Wizards. Good, but clearly past his peak. Apple needs someone who is at their prime.

    1. I had to jump in to this discussion now that I have a new account and wanted to chime in on this. What you pointed out are good as he was good at his old job in Operations, Jeff Williams is now the guy running that department. The problem is Tim can’t go back to that and needs to leave. I don’t think it’s the peak issue but rather he’s ‘out of touch’ with a lot of things. It’s the decision making that has baffled me for some time and I suspect his ‘nice guy’ persona is not working when he should be keeping people in line, holding them accountable ( despite the Maps fiasco ). Steve, while merciless as he was, knew how to keep his execs under control and he was good at tapping at the right talent.
      Several years ago, when he became CEO and the first time he opened his mouth on the keynote, I immediately knew that he was the wrong guy for the job. A lot of people at MacRumors arrogantly cheered and bragged how he was going to kick butt. I posted that he wasn’t it and warned all of them that he’s going to screw it up.
      Guess what? Look what’s happening right now with all the problems at Apple. The MacRumors ‘Apple Defenders’ didn’t listen to me.
      When Microsoft promoted Satya to CEO, that’s when Apple should’ve changed the regime right there. Keeping Cook on board after Satya’s promotion was a huge mistake.
      Mind you, I’m not a shareholder and am a professional artist/designer and I prefer the old school 2010 iMac with my Wacom in tandem with iPad Pro. It gets the job done. I don’t like what I’m seeing with Apple’s direction on their desktop and considering that they may drop the ball again, Windows is already becoming a common choice among creative professionals these days for reasons of cost and practicality.
      Apple is about thinking outside the box. When Surface Pro came out, the design was very well thought out and practical. When iPad Pro first came out, Apple screwed up. Why didn’t think go with the flat edges and magnetic stylus in the first place like they did with the new model? If Cook approved it, then that’s his fault. It proves that he has no ‘artistic’ eye for good design. Jony Ive is also part of the problem and Jobs knew how to keep his creativity focused and restrained. Cook? I have doubts.

  • Unfortunately all of the updates we all want are the things that make the least amount of money.

    The way we keep our Apple products, it’s no wonder they’ve stretched out their update schedule. My mid-2010 iMac is still going strong.

    As for China, Apple is there (like everyone else) for the low labor rates for assembly, supplies of components, and a potential windfall market for their products and services – if they ever can figutpre out how to make it work. The Chinese have spent decades hoarding electronic components and building their component supply and assembly capability. No other country will match their capability and low cost for the foreseeable future.

    I personally think the Chinese gov’t will always make sure that the Chinese owned companies making competing products and services will always be far and away more successful in China. But even 5% of their market is bigger than all of the other countries markets combined that have have the low labor rates and enough people with disposable income to buy Apple products.

  • Personally, I would rather that Team Cook would return to Apple’s core values under Steve Jobs — creating it the very best user experience possible at a reasonable (albeit premium) price. Apple fails on all levels today. It no longer strives for excellence. Rather the drive is for form over function and greatest shareholder returns. It’s products are increasingly boring, both hardware and software. I miss my passion for (almost) all things Apple and truly hope that it can earn my loyalty and interest (and wallet) again. But, if not…

  • If I had a nickel for every time someone said Apple was doomed or that any member of management was not worth the bits it takes to write about them, I would have enough money to become a majority shareholder!

    Let’s get past the FUD:
    Apple has a diverse supply chain. There are multiple manufacturers of parts. Currently, there is only one assembly contractor but that is about to change with a deal they just made with an Indian company. Oh, snap… I guess reality doesn’t fit with your FUD!

    The products: Given that Apple is making money on the iPhones, they are concentrating more on that market. Just because you cannot get a Mac with the newest Intel whiz-bang processor does not mean anything other than they didn’t think it was worth putting out a new product. Think about it… how many 2011-2014 Macs are still being used even with macOS Mojave? And since the Mac is not generating the revenues of the iPhone, the only people really hurt by this are the pros. Then again, the pros are not going to give Apple the market to justify the costs.

    But this type of analysis requires thinking and not a knee-JERK reaction causing the regurgitation of FUD. Please deposit the nickel in my account. I am accumulating the nickels so that I can make a run at Apple domination in a few years.

    1. Yea, unfortunately for them all their suppliers funnel into China which is the bottle neck for assembly of the iPhone. Also, yea, I guess all those missed updates were knee-jerk too.

      Thanks for playing.

  • John,

    Your point about all eggs in one basket is right on. I agree with your other points yet I feel you have missed one. There is no consistent product vision and pricing structure. Apple’s product line was very consistent from the original Jobs 4 quadrant concept on. My hardest part with Apple products right now is the question from friends or relatives “What do I buy?” That question usually ends up in at least a 30-40 minute conversation these days rather than a couple of quick questions and then a decision.

    Leadership and Vision are two different things. I love Tim’s leadership and stand on company ethics. Yet I am not sold on his overall Vision for the company.


      1. I so wish I could disagree with you, but I can’t. Moving production to other countries isn’t easy, I’m sure, but still, Apple has been at this long enough. One thing that continues to bother me is th llong times between updates. And when they do update, you have to wonder what Apple was thinking. The Mac Mini update wasdisappointing after so long a wait (the graphics card is the worst part). And then there are the pricing increases across the board. The lineup of products is making less sense than ever. Look at the iPhone lineup – it’s ridiculous. You’ve got iPhone 7, iPhone 8, iPhone XR, and iPhone XS. and of course, within each of those got regular and plus (or Max) options (except XR). Seems a bit bloated to me. You’ve got a Macbook, which is actually lighter than a MacBook Air, and well, you get the idea. Sigh. I still use Apple products, but sooner rather than later, Cook needs to go…. I just have no idea who needs to takeover.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.