So much of the article seemed to point out the Tim Cook was friendlier in terms of investor relationships, but who cares about that (from a technologist point of view)? I mean, the biggest indicator of the shift in their priorities is that they took 100 billion dollars in cash and used it for stock buybacks and dividends. Can you imagine Google doing such a thing? They would never dream of this, because they are too busy re-investing their profits with their big-picture potentially world changing research projects.
But hey, kudos for Tim Cook for not trying to be someone he is not, he's a money and operations guy. So money and operations will get looked at at the expensive of innovation. But this is not good for those who are used to miracles from Apple:
"It looks like it has become a more conservative execution engine rather than a pushing-the-envelope engineering engine," says Max Paley, a former engineering vice president who worked at Apple for 14 years until late 2011.
"I've been told that any meeting of significance is now always populated by project management and global-supply management," he says. "When I was there, engineering decided what we wanted, and it was the job of product management and supply management to go get it. It shows a shift in priority."
Yuck. The geek inside dies a little at reading this.
As an engineer, I understand why you are scared that "global-supply management" is getting involved. But you forget that the volumes that Apple works at have changed in the last 10 years, to the point where new products need to be manufactured at launch, in quantity that no one else in the industry has ever heard off. Good old days where you could manufacture 1 million iPhones in the first quarter and be happy, those days are over.
So pay a bit of respect to global-supply management. Manufacturing is actually as respectable as engineering. Just different concepts, but both optimize under heavy constraints to achieve near-impossible goals (at least at Apple).
They're really not. They're easily as important to the successful design and production of hardware as any of the engineers. The engineers come up with the ideas and products. Supply chain management and manufacturing are the ones that make those products and get them out to the public.
The supply chain people are the ones who are going out and negotiating the contracts for parts, and are the ones who are responsible for making sure that everything is getting shipped at the proper time(and for the proper price). It's a lot of work, and good supply managers aren't there to order the engineers around. They're there to work with them, and make sure that everyone involved knows exactly what risks every change will have on the final product.
Small nit: manufacturing is engineering. Integrating manufacturing into the electrical/mechanical/software engineering process makes good sense.
Anyone can make a thin smooth aluminium laptop. Being in the position of making the premium priced top of the range product, while paying far less for your components than your big box competitors and having such a stranglehold hold on supplies of those components that you can keep competitors out is amazing.
It's as if Audi not only made great cars - but also had all the worlds supply of tires and engines and was paying half as much as chevy for them!
When Job's decided to remove floppy disk drives and made iMacs that you couldn't upgrade the components from computers people called it lame. (This really upset people)
When the first iPad came out most people called it lame. (Has everyone already forgotten this? People were screaming it was going to fail, because it didn't run OSX).
To dismiss Apples success as only dependent on supply chain management is missing the mark in my opinion. Apples success in a large way hinged on Jobs ability to make decisions that in the immediate would piss people off but in the long term seem obvious.
Yes they have some very nice products - but what has moved them from a niche supplier of shiny toys for the 'money > sense' crowd to a gaziilion $$ market cap - is that their excellence in delivering on these products.
A lot of this feeds into the the products. They don't need cheesy Blah inside stickers because they don't need to earn that extra $0.50 They don't have to bend over to the demands of Walmart buyers or chase the latest fad because they are in a position to decide the fad.
But they don't have a unique technical skill. They have an Intel CPU, an NVidia card and a li-ion battery in an aluminium case with a Unix OS and a pretty gui. It's delivering this package at that price with that margin that now makes them special.
Apple doesn't have "cheesy blah inside" stickers because that doesn't delight users and make the product better to use. They're stupid. Apple also doesn't chase fads because fads are just that, "a fad" and rarely do fads have long lasting staying power like a good product should.
Where they do shine is in build quality and user experience which comes from owning the entire product - HW/OS/sales channel/support - and having enough margin to do it well. That's the difference between them and an equally specced Sony laptop running Windows.
It's the profit margin that really makes them special. Sony used to make products of this design and build quality but then to compete had to cut costs and so quality and had to accept the bloatware and stickers. Apple's brilliance has been in managing the process so that they can cut production costs while increasing quality and adding more stuff.
I give a huge amount of credit to Cook for this. Jobs demanding rounded corners on dialogs or sticking to a single button mouse whatever focus groups said was good technical leadership, Ive's produce design is great. But dominating the manufacture and supply network to the extent that Apple have done and with the effectiveness they have done is a major achievement and is not easy.
Look at Boeing having to delay the 7E7 because it couldn't get rivets - while Apple has 747 freighters booked ready to fly new products straight to the store the day they are released.
... this is insanity. These UXs you refer to are Apple copies that were released years after the Apple UX. Windows7 has a nice UX because Apple forced it to. People were abandoning Windows for OSX, so Microsoft invested in their UX.
Your comment is like saying, "Henry Ford's Model T was no big deal. It's hardly even better than my 1990 Honda Civic." No shit!!!!
It's like saying a BMW is unsafe because they copied seatbelts from Volvo.
Wow, that's a false framing of reality. You also fail to acknowledge that apple won the product fight before they had a stranglehold on supplies.
Apple's executing a $45B buyback and dividend program that's expected to run over three years.
They made $6B in profit last quarter.
Thus, while they're losing $45B over three years, if they keep on track, they'll make far more than $72B during that same period of time. (That's assuming they never make more or less than $6B a quarter over the next three years... in Q1, they made $13B in profit.)
The buyback and dividends make investors happy and keep Apple's stock from being diluted by employee grants and options, and those programs can be done with the company still making solid profits. Seems like a win-win.
And don't think Apple's not reinvesting profits for future products and innovations. If anything, Apple's track record over the past 14 years should be a clear sign that they're always aggressively reinvesting profit in improving every part of their business, and are always quietly working on something new.
Finally, the person quoted was one point of view, and we have no perspective on how he left Apple. Your inner geek doesn't need to be that worried.
They're not really "losing" $45 billion with the buyback. They're spending $45 billion in cash(which they have) to get $45 billion in stock. The end result, since they don't need to get a loan to execute the buyback would be basically nothing on their books(unrealistically assuming the stock doesn't move at all).
The overall point I was trying to make is even though they're giving up some cash, they're making more than enough each quarter to cover that loss of liquid capital. Apple's buyback and dividend programs should have zero impact on their ability to fund R&D or to invest in future products. (Assuming they continue their long trend of year-over-year revenue growth, of course.)
Apple doesn't design and build buildings, which are expensive, time consuming, and generally done in small quantities.
They design products meant to reach millions of people and as such design and engineering of that feat is innovative in its own right.
Your statement, taken more broadly, would dismiss the work of companies like Tesla and SpaceX. Their goals are to bring their unique products to a wider market providing a next generation experience.
I mean, I guess it would be cool if it was just Elon Musk rolling around in his single space ship or Tesla Roadster. But it's much more exciting that this can be the case for many people.
As has been endlessly observed, the Mac drew heavily on the innovative ideas at Xerox PARC, but it added many refinements, including affordability. Similarly, there were other mp3 players before the iPod, and other smartphones before the iPhone, but part of what set Apple apart was bringing all those capabilities together in a way that was greater than the sum of the parts. That doesn't mean that the parts are unimportant.
The dividend and stock repurchase will be more than paid for out of operating cash flow. In other words, even with them the cash pile will increase.
Look at some of the analysis that Horace Dediu is doing to observe that Apple is actually investing a tremendous amount of capital ($7B this year) in as yet unknown equipment, maybe real estate. (http://www.asymco.com/2012/05/22/up-to-eleven/) That's not including the billions they spend on R&D. If that's not reinvesting profit in a big picture way, I don't know what is.
Is it possible to be as big and successful as Apple but also maintain some kind of startup pro-geek mentality? Was this mentality ever there in recent years? My understanding it was something of a Jobs-led dictatorship that worked because Jobs had good judgement and good taste. I suspect most meetings have global-supply management involved. Apple makes items on the scale of tens of millions. Input from the guys who make that happen past the finished prototype stage is going to be important.
I'm never sure what to think about these articles. They come out every so often for every big company. A few months ago it was how Google is getting too corporate. Or how Facebook is working its employees too hard. The inner gossip of how companies are run, especially by bitter ex-employees, isn't usually useful information.
For Jobs, a private or merely theoretical manifesto wouldn't have been enough. Apple designs everything from the concept to the manufacturing process to the unboxing and initial startup experience. For a something to be a true design reference, it had to cover all these bases. That means it needed to be a real product that actually shipped. Which it did.
If you measure the return using everything that followed its lead - which includes the flagship store - it has recovered its investment a bazillion times over. Whatever else the Cube may have been, it was not a mistake. The one-button hockey puck mouse with the too-short cable? That was a mistake.
Another way of looking at the Cube (and its successors) is that it's a `desktop laptop'.
Now, identify one - just one - computer that shared those trademark corners when the Cube came out. Nothing else looked even remotely like it, including Apple's earlier products. Now, there's little - if anything - done by Apple that doesn't mesh with the Cube beautifully. Even the individual keys on the current wireless keyboard (which I'm using to type this) and the trackpad off to the side are clearly post-Cube, and entierly consistant with the direction it set...a decade ago.
In terms of towering achievements in industrial design, the Cube is to computing what the 1927 Yankees are to baseball.
But when Jobs picked Sculley, he was young and inexperienced. He probably had never worked with 'an MBA' so he didn't know what to watch for
Also, the relationship with Sculley went downside fast. When things don't match, this is usually what happens.
This doesn't sound like a positive development to me. This kind of structure almost always seems to lead to less accountability and more business-speak bullshit.
Another one from the article:
> investors now have the CEO's ear for the first time in years
To that, I say, "Oh crap".
Jobs took Apple to greatness because he obsessed over making incredible products. Build incredible products and the money and investors will follow. Change your focus to investors, operations, or accounting and watch as the products suffer.
CNN's breathless and laudatory tone in describing all these responsive changes from Apple just serves as a reminder that reporters should just keep their views to themselves. You can tell that this CNN reporter/editor has a tingle up his leg over Cook's touchy-feely professionalism... as though that's going to improve Apple in any way that matters to those of us who use their products.
Cook may not be a disaster on the level of John Sculley, but his focus on the corporation of Apple rather than on the coolness of its products would worry me if I was long on AAPL.
Tim Cook is a very talented business and operational manager. I don't think he should try to become a "product guy" CEO just because Steve Jobs was a product guy CEO. He should stick to spending his personal time on doing what he does best--operations.
Yeah, product development at Apple is going to suffer because Steve Jobs is gone. There's nothing anyone can do about that, including Tim Cook. The thing that Cook has to do is protect what remains of the great creative processes that are still going. If we hear that investors have Ives' ear, that's when it's time to panic.
It would worry me even as a just a user of Apple's products. It should worry all men because it could mean a slower progress of humanity in technology.
If it were not for the Jobs' obsession, would we even have an iPad in the year 2012? Given his absence, when are we going to have the next such a thing?
The world needs people like Steve. Apple, or not.
Not to sound to biased, but project management-style documentation is all completely horrific, obfuscating bloat.
We've spent the last half year basically establishing what we knew before the whole thing started. Documentation like that seems to be 100% bloat that is designed to make people feel like they're doing something to earn the upper management title.
The growing M&A team Lashinsky describes is a good case in point. Cook handled that when they had a fraction of the $110 Billion they have today. They started adding specialists when Google swooped in and acquired AdMob, and have done well since (Siri, Anobit, Chomp). Considering how much more competitive the talent market has become, this strikes me as perfectly logical.
1. As an example, gaming on OS X has traditionally sucked (it has gotten better in spite of Apple). The primary reason: Jobs didn't care about gaming. Put some bizdev people who are analyzing it for what the users want and what will grow OS X adoption, and there could be a very different outcome, including more M&A activity.
If you compare the Jobs 2.0 Apple to the 1990s Apple, improved operational execution (supply channel management, demand forecasting, etc) made a huge impact on the bottom line.
That's pretty impressive for an R&D focused company.
That's subsidized, for what it's worth.
I think Tim has convinced Jobs that operation and execution is all part of the product experience.
Assuming you're in your thirties: A man that has worked at Apple since you were a late teenager, in several leadership positions, has far more to do with what the company is today than your pithy comment.
Bob Iger taking over from Michael Eisner: Forbes has a nice write up about his time at Disney which reads very much like the profile of Cook. Iger is a quiet delegator, but has had a tremendous amount of success.
Michael Eisner taking over from Walt Disney: He didn't directly follow Walt, but Eisner reinvigorated an iconic company that was rudderless after Walt died. Paints a picture of what Apple might have looked like if people asked "What Would Steve Do" at every turn.
Jack Welch taking over from Thomas Edison: Again, not directly, but GE was on the ropes when Jack rose to the top and employed a strategy very different from the founder to get 20 years of solid growth.
Ultimately, you want someone with a vision at the top, even if it's not the same vision as the founder. Cook seems to have a plan and can execute on it well. Give the guy a chance!
Maybe there is something to promoting from within vs hiring some former CEO?
 link from within the charts page above: http://www.economist.com/node/21555895
It's clear Cook cares about the company and wants to drive it forward, and it's clear that things aren't as focused on letting the engineers rule the roost, but we'll judge him over the next 5 years rather than when he's barely had chance to settle into the seat.
Lots of engineers run companies and most of them have terrible taste and product ugly, non-innovative stuff that is anti-human. Then they hire some designers to spray perfume on their steaming turd. This is what every non-Apple computer company did and most of them are still doing it, just now they have updated Apple products to rip-off.
This doesn't mean that Apple will become Microsoft, or that all the technical innovation will end, it simply means that they are taking the steps they need to take to ensure that the techies will be ABLE to keep innovating.
But, don't let me get in the way of a good hand wringing session :)
Read some of Ive's infrequent interviews, he uses the word "we" never "I" to discuss the design process. That is what makes Apple so successful.
Disclaimer: I'm not an MBA and don't intend on getting one. That being said, I've noticed Silicon Valley discounts solid operations knowledge as much as Wall Street tends to discount the difference between a hacker and an okay coder. Andreesen is a smart man and was probably making a rallying cry/culture call rather than an analytic one with this line.
How does being responsible for all of the company's worldwide sales make Tim Cook not a sales guy?
Funnily enough, Steve Jobs himself is many times referred to, derogatorily, a master salesman even to this day.
The most incredible people always have the least predictable life stories.
"Cook [was born in 1960 and] grew up in Robertsdale, Alabama, near Mobile. His father was a shipyard worker, while his mother was a homemaker. Cook graduated from high school at Robertsdale High School, earned a B.S. degree in industrial engineering from Auburn University in 1982, and his M.B.A. from Duke University's Fuqua School of Business in 1988."
His family might have been blue-collar, but you seem to be right in that after graduation in 1982 he would have been 22, and presumably taken a regular white-collar job and later entered business school. Pretty standard trajectory.
Sculley was a "logistics guy" and it worked for Pepsi. By 1995 Apple was a bureaucratic, MBA-filled, artist-less mess. Apple isn't HP or Samsung or one of a dozen other bland electronics companies for a reason.
Nevertheless what a fantastic opportunity to be involved with a leading company.
"[Lashinsky] shares an insider look at Apple, one of the world's most iconic and secretive companies. Based on his research into the technology giant's internal processes and approaches to leadership and building products, Lashinsky offers insights and surprises from his book, Inside Apple: How America's Most Admired--and Secretive--Company Really Works."
Cook was the supply chain guru Jobs employed to turn Apple's supply chain model into one like Dell's. No surprise with this knowledge Cook is now CEO of Apple.
I don't understand this line of logic. Tim has an engineering degree, and optimizations are a core of 'techies.'
If not, I have to look for other things and I don't really see something which could hold a candle to Apple.
I think that says it all.