By Adam Satariano and Peter Burrows - Oct 6, 2011 8:35 PM GMT+0700
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Apple Inc. chief executive officer Tim Cook. Photographer: David Paul Morris/Bloomberg
Oct. 5 (Bloomberg) -- Steve Jobs, who built the world’s most valuable technology company by creating devices that changed how people use electronics and revolutionized the computer, music and mobile-phone industries, died. He was 56. Bloomberg's Erik Schatzker reports on the life of Apple Inc.'s co-founder and former chief executive officer. (Source: Bloomberg)
Apple Inc. (AAPL) Chief Executive Officer Tim Cook faces the challenge of crafting the company’s strategy following the death of Steve Jobs, a man he called “a visionary and creative genius.”
Cook, who became CEO on Aug. 24 after Jobs switched to the role of chairman, announced his predecessor’s death yesterday in a message to employees.
“Apple has lost a visionary and creative genius, and the world has lost an amazing human being,” Cook, 50, said in the memo. “Those of us who have been fortunate enough to know and work with Steve have lost a dear friend and an inspiring mentor. Steve leaves behind a company that only he could have built, and his spirit will forever be the foundation of Apple.”
The announcement came one day after Cook took the stage to introduce a new iPhone, marking his first product unveiling since taking the reins. To maintain Apple’s growth, he will have to push into more new markets, continue the company’s Asian expansion and execute a shift to cloud computing.
Apple’s shares dipped $3.85, or 1 percent, to $374.40 at 9:31 a.m. New York time on the Nasdaq Stock Market. They had climbed 17 percent this year before today.
Jobs hired Cook from Compaq Computer Corp. in 1998, and the deputy soon proved his mettle as an operations expert. Cook transformed inventory management to enable Apple to ship the iconic iMac in a rainbow of colors, deviating from the typical plain beige box. He later was able to orchestrate the speedy delivery of iPods, iPads and iPhones -- often within 48 hours -- to help forge an army of Apple loyalists.
‘Not Going to Change’
Cook must now take up the mantle of charting Apple’s creative vision, something he was less involved with in his previous job as chief operations officer.
Following Jobs’s retirement as CEO, Cook said to employees that “Apple is not going to change” and he reiterated that thought yesterday: “We will honor his memory by dedicating ourselves to continuing the work he loved so much.”
Cook led the company when Jobs was out during three medical leaves. Though he’s a counterpoint to Jobs’s more emotional personality, the men are two sides of the same coin, said Mike Janes, who used to run Apple’s online store. Both are demanding leaders with an attention to detail.
“Despite their style differences, their intensity is basically equal,” Janes, now the CEO of tickets search engine FanSnap.com, said in an interview earlier this year. “They are both perfectionists.”
Different Approach
Jobs’s absence was palpable throughout the 90-minute introduction of the iPhone 4S this week at Apple’s headquarters in Cupertino, California.
“This is my first product launch since being named CEO,” Cook said, the only Jobs reference, if veiled, at the entire event. “I’m sure you didn’t know that.”
Jobs was renowned for stirring, meticulously rehearsed pitches. Cook delivered his remarks more slowly and methodically, and he let other executives do much of the presentation.
“There’s no way to replace Steve Jobs -- and there were times during the performance that you felt that,” said Gene Munster, an analyst at Piper Jaffray Cos.
Still, Cook is the right man to carry on the vision, Munster said.
“Jobs’s final act as CEO was another of his many great accomplishments,” Munster said yesterday in a report. He reiterated his endorsement of Apple’s stock. “Cook is capable of running Apple, but his rare combination of extreme humility and insatiable motivation make him uniquely suited to continue Jobs’s work as CEO and carry on his vision with a peerless executive team.”
Long Hours
Cook is typically found working long hours at the company’s headquarters or traveling around the world to meet with suppliers and manufacturers, Janes said. Cook led the company’s negotiations with Verizon Wireless to bring the iPhone to that carrier in the U.S. this year.
During his 13 years at Apple, Cook has mastered an expanding list of operational roles, including manufacturing, distribution, sales and customer service.
“We have great confidence in Tim Cook, who is a partner of high quality,” Stephane Richard, CEO of France Telecom SA, said in an interview the day Jobs stepped down. Richard’s company provides carrier service for the iPhone.
Google Threat
While Cook was Jobs’s choice for successor, he hasn’t had much time to demonstrate whether he can rally the company’s roughly 50,000 employees as effectively as Jobs, who steered Apple into industries as varied as mobile phones, music downloads and retailing.
Cook also faces mounting competition, in part because of Apple’s foray into new markets. Google Inc. (GOOG)’s Android has emerged as the biggest smartphone operating system, bolstered by HTC Corp. (2498), Samsung Electronics Co. and Motorola Mobility Holdings Inc. adopting the software. Google said Aug. 15 it planned to purchase Motorola Mobility for $12.5 billion.
Investors, meanwhile, may be more likely to pressure Cook to use some of Apple’s cash -- now more than $75 billion, including long-term holdings -- for a dividend or stock buyback.
“He’s a very competent corporate manager,” said Apple investor Peter Sorrentino, a senior portfolio manager at Huntington Asset Advisors in Cincinnati, which oversees $14.8 billion in assets. “People are going to be looking for that crack of weakness, and they’ll be looking at him a lot closer than they look at Steve.”
ICloud Service
In addition to overhauling the company’s supply chain, Cook also has led the company into new markets. Sales in China reached $3.8 billion in the last reported quarter, up sixfold from a year ago. The company is looking to fuel more growth with its new iCloud service, which stores files online.
To maintain its streak of innovations, Cook will have to lean on a corps of executives. Jonathan Ive oversees a staff of product designers that is considered among the best in the world. Scott Forstall leads development of Apple’s mobile software. Bob Mansfield runs hardware engineering, and Peter Oppenheimer is chief financial officer. The executive team, which often meets on Monday mornings to receive sales updates and discuss strategy, has been together for years.
“The team here has an unparalleled breadth and depth of talent and a culture of innovation that Steve has driven in the company,” Cook said in January. “Excellence has become a habit.”
Companies such as Nike Inc. and International Business Machines Corp. have thrived without their iconic leaders, said John Connors, a venture capitalist at Ignition Partners and former finance chief at Microsoft Corp. He and Cook sit on Nike’s board, which oversaw the retirement of CEO Phil Knight.
“The good Lord created one Steve Jobs, but he only created one Phil Knight and Nike is still an enormous success,” Connors said. “I am sure the world will see in the next several years that Tim is a very uniquely gifted guy and Apple will be wildly successful under his leadership.”
To contact the reporters on this story: Adam Satariano in San Francisco at asatariano1@bloomberg.net; Peter Burrows in San Francisco at pburrows@bloomberg.net.
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net
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