Apple Has Thrived During a Decade of Tim Cook as CEO. What’s Next.
Happy anniversary, Tim.
Apple lost the world’s most admired chief executive, and yet the company never lost a step. Under Cook, Apple stock has gone from $12 a share to nearly $150; revenue has more than tripled; and, most important, Apple has continued to innovate, rolling out everything from the Apple Watch to AirPods along with a succession of ever-improving iPhones.
The announcement of Cook’s promotion to CEO a decade ago included a prophetic quote from then-chairman Art Levinson. “The board has complete confidence that Tim is the right person to be our next CEO,” Levinson said. “Tim’s 13 years of service to Apple have been marked by outstanding performance, and he has demonstrated remarkable talent and sound judgment in everything he does.”
Those 13 years are now up to 23 years, of course. And the overwhelming evidence is that Apple made the right call when it chose Cook to succeed Jobs in the top spot.
Here’s a report card on how Tim has fared in his tenure as CEO so far.
Investors have been rewarded: On the day Apple announced the CEO change, the stock actually fell a few cents. Hope that wasn’t you. Since that day, Apple shares have appreciated almost 1,200%. Another way to think about: more than 92% of Apple’s current market valuation was created with Cook in charge. Or to look at it another way, Jobs provided the vision, and Cook went out and built out the business.
Fundamental performance has been fantastic: Current Street estimates have Apple generating revenue for the September 2021 fiscal year of about $366 billion, up about 240% from the $108 billion reported in fiscal 2011. Per-share profits over the same span have increased more than tenfold, and free cash flow has more than tripled. And Apple has returned piles of cash to shareholders via an aggressive stock repurchase program, reducing share count over the last 10 years by nearly 10 billion shares, or about 37%.
The company continues to innovate: One common but uninformed criticism of Apple is that the company hasn’t really done anything new since the launch of the first iPhone in 2007. That is patently silly. The steady parade of new and improved products continues to be the heart of the Apple story.
Under Cook’s watch, for instance, Apple has introduced every generation of the iPhone from iPhone 4 through iPhone 12 (and soon, iPhone 13), a period in which the device has been completely transformed with new designs, better processors, cameras, displays and applications and dramatically improved core software, including the first 5G iPhones last year.
Apple launched the Apple Watch in 2015, AirPods in 2016, the HomePod in 2018, a whole host of new services in 2019, including the Apple Card credit card, the Apple TV streaming service, Apple News+ and Apple Arcade and AirTags in 2021. There have been dramatic improvements in Macs and iPads, including the first Macs with Apple designed processors. And that is an abbreviated list.
Cook is a masterful politician: Let’s not forget that Cook has showed a deft hand at steering Apple’s public image. Amid widespread hostility to the tech giants under the last administration, Cook engineered a far better relationship with President Trump than other tech leaders, while maintaining the company’s important ties with China, where Apple has a huge customer base and crucial supplier relationships. Cook oversaw Apple’s largest-ever acquisition–the $3.2 billion acquisition of the headphone company Beats in 2014 –and has managed to keep tight control of his personal story, including coming out as gay in a landmark Time magazine story, also in 2014.
What’s next: Ah, that is always the big question for Apple. What else can it do? Well, in a few weeks, we’ll get new iPhones. But there will be more developments after that, and not just new versions of Macs, iPads and other devices. The company has been widely reported to be working on automotive technology, and an Apple Car is a possibility. The company has used the Apple Watch as a jumping off point for expanding its offerings in health and wellness. Apple is reportedly working on augmented and virtual reality hardware. And no doubt it has other things in the hopper that not even the rumor mill has learned just yet. Maybe the toughest question is how long Cook intends to stay at the helm. He turns 61 in November, the oldest CEO among the five tech megacaps. Cook hasn’t said when he plans to step down, but he’s also said he won’t likely be CEO when he turns 70. Apple survived the transition from Jobs to Cook, and it will likely be just fine when the next succession comes.
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