Apple CEO Tim Cook steps out of Steve Jobs' shadow, takes more risks
SAN FRANCISCO — “Think different” became Apple's creed during the late Steve Jobs' time as CEO. Now, chief executive Tim Cook is embracing the idea while making decisions that would have seemed crazy to his fabled predecessor.
Apple's pending purchase of headphone maker and streaming music company Beats Electronics for $3.2 billion is just the latest example of Cook's deviation from Jobs, who had so much confidence in his company's innovative powers that he saw little sense in spending large amounts of money on acquisitions.
Cook became chief executive in late August 2011, about six weeks before Jobs died. But in a number of ways, he is just beginning to put his imprint on Apple. Cook is straying from Jobs' cash-hoarding habits by committing to return $130 billion to shareholders through dividends and stock buybacks. He has orchestrated a company stock split and agreed to match employees' charitable contributions up to $10,000 annually.
Under Cook's leadership, Apple has displayed more social responsibility by working to improve labor conditions in the overseas factories that assemble its devices and taking steps to reduce pollution caused by its data centers and gadgets.
The shift in management philosophy has resulted in an odd twist: Apple Inc.'s pace of innovation has slowed, and it looks more like a conventional company than the corporate rebel Jobs tried to cultivate. Instead of releasing revolutionary gadgets such as the iPod, iPhone and iPad, Apple has been mostly upgrading existing products and figuring out ways to manage its bulging bank account since Cook took over.
“Jobs wanted Cook to step out and be different,” said longtime technology analyst Rob Enderle. “But I think he wanted (Cook) to do the things that were central to the business, not things that Jobs thought were stupid.”
Cook has repeatedly sought to assure investors and customers that Apple remains focused on inventing “insanely great” products, even though the company's last breakthrough, the iPad, was released in April 2010 — 18 months before Jobs died of cancer.
In the meantime, a host of technology companies have forged ahead with wearable devices, including Google Glass and Samsung's line of Gear smartwatches. Also stealing the innovation spotlight: Internet connected housewares and appliances such as the Nest thermostat, whose maker was founded by former Apple designer Tony Fadell.
Google purchased Nest in January for $3.2 billion.
“We've got some great things that we're working on that I'm very, very proud of and very, very excited about,” Cook told analysts during a conference call last month. “But, for us, we care about every detail, and when you care about every detail and getting it right, it takes a bit longer to do that, and that's always been the case.”
After pointing out that there were other digital music players, smartphones and tablet computers before Apple redefined those markets with its devices, Cook said something that sounded like an echo of Jobs: “It means much more to us to get it right than to be first.”
Wall Street is taking a wait-and-see attitude with Cook. Apple's stock ended last week at $585.24, well below its peak of $705.07 in September 2012, but still a 56 percent gain since Cook became CEO. That's just slightly behind the 60 percent increase in the Standard & Poor's 500 index during the same period. Despite the lag, Apple's market value is the highest in the world at about $500 billion.
Although Cook has given few clues about the breakthrough products Apple is working on, recent industry speculation has focused on the possibility of an Internet-connected watch, a suite of mobile applications for managing personal health, a digital wallet and a system that would make it easier to toggle between traditional television and Internet video programs. A new iPhone with a larger display screen is expected in August or September.