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Apple Milestone: 10 Years of Cook As CEO
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The most important thing in tech today is …
marking 10 years of Tim Cook leading Apple, a decade into what might go down as the most significant CEO transition in modern business history.
It’s hard to measure CEO performance. Their job is to make decisions for the long term, but they’re also stuck playing the hand their predecessors have dealt them. But after 10 years of Cook, it’s easy to size up how he’s done. That’s partly because most CEOs don’t last nearly as long as Cook has. (A 2018 Equilar study found that the median tenure of S&P 500 CEOs was five years and the average just over seven years.) And it’s partly because Cook has succeeded by almost every imaginable metric:
When Cook took over the CEO title from a declining Steve Jobs in August 2011, Apple’s total value — its market capitalization — stood at $355.6 billion. Now it’s $2.47 trillion. He has added more than $2 trillion in market capitalization.
Apple’s full-time equivalent employee headcount has more than doubled from 63,300 in 2011 to 147,000 in 2020.
In the fiscal year that ended September 24, 2011, Apple turned in $108.2 billion in revenue and $25.9 billion in net income. Last fiscal year, during a pandemic, Apple turned in $220 billion in revenue and $57.4 billion in net income. That means Cook more than doubled the revenue and profit of the world’s most valuable company, a felony violation of the law of large numbers.
Critics claim Cook is not a product CEO. But he successfully launched iCloud, Apple Music, the Apple Watch, AirPods and more. He also managed the still-puzzling feat of segmenting the iPhone so masterfully that a $399 iPhone SE protects the ecosystem at the low end, a $999 iPhone 12 Pro is its hero at the high end, and yet the company’s overall gross margins are exactly where they were 10 years ago, around 40%. Oh yeah — and Cook is moving Apple’s entire hardware line to custom chips, a fulfillment of the vertical integration dream when Steve Jobs bought P.A. Semi in 2008.
I could go on about how Cook threaded the needle in the China market, held off Samsung, Amazon Fire phones and tablets and Google Play, staked out a position on user privacy, started paying a dividend, hired well and recovered amazingly (Angela Ahrendts) when he didn’t (John Browett). But this is a newsletter dispatch, not a magazine story.
You can make an argument for Bob Iger, or Satya Nadella, or Shantanu Narayen, or Lisa Su being the best replacement CEO, and end the bout in a draw. But one thing you can’t argue: None of them had bigger shoes to fill than Tim Cook.
While you were sleeping …
Best Buy said Tuesday fiscal second-quarter sales rose nearly 20% as consumers upgraded devices and equipment and permanently embraced habits formed over the past year — from hybrid work to streaming TV shows. CNBC
Following a monthslong delay, Peloton said Tuesday that a less expensive version of its treadmill is finally set to debut in the United States next week, with a slew of new safety features. Priced at $2,495, the redesigned Tread machine will go on sale in the U.S., Canada and the U.K. on Monday. CNBC
In the broader world …
Vice President Kamala Harris on Tuesday called out Beijing’s actions in the South China Sea, and sought to assure countries in Asia that they won’t have to choose between the U.S. and China. CNBC