Steve Jobs turned Apple into one of the biggest companies in the world.
So when he passed away in 2011, people wondered: What will this mean for Apple?
Good morning.
This is my first product launch as CEO.
I’m sure you didn’t know that.
When Tim Cook took the stage in June 2011 for a special event to introduce a new iPhone,
a seat was reserved in the front for Jobs…in case he was feeling well enough to attend.
But diagnosed with pancreatic cancer, Jobs’ health had worsened.
The following day, he died at the age of 56.
Apple’s chief designer Jony Ive skipped the event to be at Jobs’s side, as told
in the book “After Steve” by Wall Street Journal correspondent Tripp Mickle.
Jobs considered Ive the second-most important person at Apple, after himself.
Hey Jony
They had lunch together nearly every day.
A typical conversation would go like this:
“Steve used to say to me, and he used to say this a lot, ‘Hey, Jony, here’s a dopey
idea.’
And sometimes they were.”
Jobs gave Ive the freedom for his creative juices to flow.
Ive was inspired by the godfather of design Dieter Rams’s philosophy of creating simple
and functional products.
Yet, after Jobs died, Apple appeared to shift its focus from design to prioritizing profit.
Cook made Apple wealthy beyond imagination.
The company’s annual revenue quadrupled from $108.2 billion in 2011 to $394.3 billion
in 2022.
Cook made significant inroads in China and expanded Apple’s services business.
But despite the expansion of services and the introduction of new products, THIS is
still Apple’s most valuable product.
And we are calling it iPhone.
The iPhone still accounts for more than half of Apple’s revenue!
Over the years, the iPhone’s camera improved, and so have its chips, yet its design has
remained pretty much the same.
To the point that Samsung mocked Apple in this commercial:
Clip And that epic moon shot that’s getting all the likes won’t be yours.
Because this innovation is not coming soon to an iPhone near you.
It’s already here in the Galaxy.
Athough Apple became richer under Cook, the company has been criticized for being slow
to innovate.
Former Apple sales executive David Sobotta told the tech news website Readwrite:
"Technology-wise, I think Tim Cook is a lightweight.
I never felt passion for technology from Tim like I did from Steve and some of the great
engineers.”
Former Apple engineer Bob Burrough told CNBC that the “dynamic has clearly and distinctly
changed”.
Jobs was known for constantly pushing the design team.
He once walked past a prototype of an upcoming iPhone that he didn’t like, and said to
an engineer: “What is this sh*&?”, a remark characteristic of his candid demeanor.
Jobs also insisted that the iPhone needed to be changed from plastic to glass, even
though the design team worried that glass would crack easily.
Jobs insisted and told Jeff Williams, Apple’s Chief Operating Officer, “I don’t know
how we’re going to do it, but when it ships in June, it’s going to be glass.”
When Ive presented the initial iPad prototypes to Jobs, the rectangular design seemed too
harsh.
They opted to round the edges, making it easier to slide a finger underneath and lift from
a table.
Jobs spent much of his time discussing prototypes by the long wooden tables outside Ive’s
office.
On the other hand, Cook hardly swung by the design studio.
And when he did, it wasn’t for long.
Cook explained to ESPN: “I knew what I needed to do was not to mimic him.”
“I would fail miserably at that, and I think this is largely the case for many people who
take a baton from someone larger than life.
You have to chart your own course.
You have to be the best version of yourself.”
He decided to focus on business and operations.
Cook would wake up before 4 am to review sales data.
He’d want to know why a certain iPhone model was outselling another model in a given city.
Before becoming CEO, he was Apple’s chief operating officer, responsible for managing
the global supply chain.
He’s credited with streamlining Apple’s manufacturing process, which cut costs significantly.
He minimized the amount of inventory Apple held at any given time, something he learned
at IBM…where he was responsible for securing components to make PCs.
He once declared: “Inventory is fundamentally evil.”
Likening it to dairy products; he believed they should be viewed as perishable and not
be allowed to sit around for too long.
There wasn’t much doubt who Jobs would pick to succeed him.
Cook exuded calm and listened more than he spoke.
Ive reportedly did not want the top job and was more comfortable focusing on design rather
than the business side of running a company.
The only other serious contender for CEO was Scott Forstall the head of software design.
However, his ego and history of conflicts ruled him out.
And then Cook pushed him out of the company after the disastrous launch of Maps that Forstall
oversaw.
And it is beautiful.
The maps were rife with errors.
Cook even had to issue an apology.
With Forstall gone, Cook handed oversight of software design to Ive, which put more
on Ive’s plate.
One of Jony’s big ideas was adding the control center that lets you swipe from the top or
bottom of the screen.
Engineers originally said it couldn’t be done.
But Ive insisted.
After Jobs’ died, there were critics who questioned Apple’s ability to innovate.
They desperately needed a product to wow the world and silence the doubters.
In 2012, Ive arranged for Apple’s top executives to meet at a hotel in San Francisco to discuss
a wearable device with health sensors.
Noticeably absent from the meeting…was Tim Cook.
He sent a message saying he had no plans to try to fill the shoes of his predecessor.
Cook delegated responsibility to Ive and to the head of operations, Jeff Williams.
The Apple Watch was the company’s most personal product, and as a result, it came with different
watch bands and various colors so people could customize it.
The digital crown to expand and contract the app icons paid homage to the traditional watch
design and blended together the past and the future.
It is the next chapter in Apple’s story.
And here it is.
Cook unveiled the Apple Watch in September 2014, three years after Jobs’ death.
Although the excitement was palpable at the launch event, the media’s reaction was lukewarm.
A Bloomberg headline put it this way: “You’ll Want One, but You Don’t Need One.”
Ive anticipated Apple needed to make 40 million watches in the first year to meet demand,
but Apple only sold around 12 million watches in 2015.
The Apple Watch did gain traction over time, and Cook said it leapfrogged Rolex to become
the most popular watch on earth.
The Apple Watch sapped a lot of energy out of Ive, who had to oversee industrial design,
software design, and marketing - all without the collaboration of his creative soulmate.
(show Jobs)
Ive felt as if he had to fight hard for his vision, like convincing the marketing team
that the watch needed to be marketed as a fashion accessory rather than as a tech device.
The watch would eventually shift from fashion to fitness in an effort to boost sales.
Ive told the New Yorker that he’d become “deeply, deeply tired” and that the year
leading up to the Watch’s debut had been “the most difficult” he’d ever spent
at Apple.
Just like Cook’s ability to squeeze more out of suppliers, the CEO appeared to be squeezing
more out of Ive…who took a three-week vacation in Hawaii to unwind - the longest break he’d
had in years.
(Kauai)
Tripp Mickle’s book describes how Ive wanted to leave Apple, which alarmed Cook, who didn’t
want to lose the world’s most famous industrial designer.
The solution was for Ive to step back from day-to-day management and shift to a part-time
role, focusing on future projects such as designing Apple’s spaceship-like headquarters.
Two designers who reported to him would be given more daily responsibilities.
(Richard Howarth and Alan Dye)
Then there was the question of what would be Apple’s next big thing.
Launching a successful electric car would blow away any doubt about Apple’s ability
to innovate.
At the time, Tesla was doubling its staff and developing more sophisticated batteries
for its electric vehicles.
Tesla was also recruiting dozens of Apple engineers.
Jobs had reportedly shown interest in building an Apple car as early as 2008.
Apple hired hundreds of engineers to start working on the secretive “Project Titan”.
Ive envisioned a fully self-driving car where passengers would hop in and tell Siri where
to take them, and off they went.
But, as Apple found out, building an autonomous car is extremely difficult.
And there was no passionate leader like Jobs to spearhead things.
Apple’s research and development spending in 2015 hit $8 billion, with the secretive
car project undoubtedly eating up a huge chunk of that budget.
As it stands now, reliable Apple analyst Ming-Chi Kuo believes it's unlikely an Apple car will
hit the market before 2025.
Apple then turned its attention to another product.
Wireless earbuds would further free people from their iPhones, as the Apple Watch had
done.
Ive’s design team had brainstormed the idea of AirPods back in 2013.
When they first came out, people thought they looked a little ridiculous.
Comedian Conan O’Brien poked fun at their potential for falling out of peoples’ ears.
Really?
Ugh, fine
Despite the issues, the AirPods quickly gained popularity for their sound quality and seamless
integration with the Apple ecosystem.
Yet, it was clear Ive’s influence was diminishing.
He had little to no say when Cook selected a new board member to replace a longtime confidant
of his, Mickey Drexler.
Cook named James Bell, Boeing’s former chief financial officer, to Apple’s Board, which
addressed a lack of diversity.
Ive supported diversifying the Board but preferred someone with marketing expertise over finance.
Mickle’s book says a colleague defending the pick of Bell told Ive, “He’s an underrepresented
minority.
He has a great reputation.”
Ive reportedly responded: “Who cares?
We have to be concerned about the company.
He’s another one of those accountants.”
The appointment could be seen as demonstrating Cook’s political adeptness.
He was Apple’s chief diplomat; he charmed the pants off Chinese ministers to secure
government approval to use the iPhone on the country’s largest wireless carrier.
He navigated in an environment in which President Trump vowed to bring jobs back to America
which was worrying for a company that benefitted from China’s cheap labor.
Cook had masterminded the outsourcing of Apple's production to China through the Taiwanese
company Foxconn.
There was significant controversy after a spate of suicides in the 2000s and 2010s tied
to brutal working conditions in Foxconn factories.
Nets were installed to catch people as they fell.
Apple has taken steps to address the working conditions, including conducting regular audits
and inspections.
85% of Apple’s Pro lineup of iPhones is reportedly made in ‘iPhone city’, a sprawling
campus in Zhengzhou, China, that employs as many as 300,000 people.
Depending heavily on China hurt Apple as COVID restrictions delayed iPhone shipments.
Apple realized it had to diversify and is now trying to open up iPhone cities in India
and Vietnam.
Cook also had to manage many issues unrelated to product development.
Like the time the FBI demanded Apple unlock an iPhone used by one of the shooters in the
San Bernardino attack in 2015.
Apple resisted, citing user privacy concerns.
The FBI managed to access the data through the help of a third party.
And in 2020, Fortnite creator Epic Games sued Apple, accusing it of anti-competitive practices.
Apple had removed Fortnite from the App Store after Epic Games allowed in-app purchases
in Fortnite, bypassing Apple's 30% commission.
So while Tim Cook was very busy, he spent little time coming up with Apple’s next
big product.
Instead, Apple made changes to its existing lineup, like removing the home button for
the iPhone X.
But the iPhone X was also delayed due to issues with the facial recognition system.
Let’s try that again.
The delays coincided with Ive not being in the office every day.
According to Mickle’s book, Ive moved some meetings off campus, to a private club in
San Francisco, which apparently irked some Apple executives.
They were also reportedly not happy that Ive was believed to be getting paid much more
than them.
Each member of the executive team earned about $25 million annually, which was publicly disclosed
to comply with the SEC's requirements.
However, Ive avoided being classified as an officer, and as a result, his compensation
was kept secret.
Some senior Apple employees felt the best days were behind them.
When top software designer Imran Chaudhri prepared to leave the company in 2016, he
sent a farewell email and quoted the poet Rumi: “When you do things from your soul,
you feel a river moving in you, a joy.”
He then played off that line by writing: “Sadly, rivers dry out, and when they do, you look
for a new one.”
The comments infuriated management, including Ive, and Chauhdri was fired.
Another employee who left, Chris Stringer, was a top designer unhappy with Apple’s
smart speaker.
He believed Apple treated the HomePod like an afterthought rather than a signature product.
The HomePod has lagged far behind the popularity of Amazon’s Echo and Google’s Nest.
Ive realized how much his team struggled without him and decided to return to a more hands-on
role in late 2017.
Yet…it was never the same again.
The successors to the iPhone X ten looked almost identical.
Cook had hoped the lower-quality XR would do well in China, but it bombed partly due
to competition from Huawei.
In January 2019, Apple released a letter from Cook to investors, reducing the company’s
quarterly sales estimate for the first time in 16 years.
Apple lowered revenue guidance to $84 billion instead of the $89 billion to $93 billion
it had previously projected.
Cook blamed the economy and trade sanctions, but the reality was, people were also getting
tired of only incremental changes to the iPhone.
Apple noticed customers who usually upgraded their phones every two years were not doing
so nearly as often.
Despite the challenges, Apple had a milestone to look forward to that year, in 2019, as
it prepared to celebrate the formal opening of its new headquarters in May.
However, a day before, Ive’s dad had a stroke.
He rushed to the UK to be with his father, who thankfully recovered.
Jony owed his career to his father, who had taught design at UK schools and nurtured his
interest in design.
For Jony, it appeared time to consider returning to the UK for good with his wife and twin
boys.
A month later, in June 2019, Ive gathered a group of his designers and told them he
was leaving Apple.
He explained he’d grown tired of the company’s bureaucracy, as reported by Tripp Mickle.
Mickle writes in his book that Ive told the team: “I don’t want to go to any more
f*&^ing meetings.”
The design team would now report to the chief operating officer, Jeff Williams.
Ive’s foot wasn’t fully out the door, however; he set up his own design firm alongside
Marc Newson, an influential designer at Apple who worked under his guidance.
LoveFrom would consult for Apple.
The contract was reportedly worth $100 million.
Although Ive hoped the relationship between his firm and Apple would last for “many,
many years to come”, as he told the Financial Times, that would not be the case.
In 2022, Apple and Ive parted ways for good.
Steve Jobs was well aware that great companies faltered after their founders departed.
It happened to Disney after the absence of Walt’s leadership, and to Sony when co-founder
Akio Morita stepped down as chairman.
Jobs told his biographer Walter Isaacson: “The company does a great job, innovates
and becomes a monopoly or close to it in some field, and then the quality of the product
becomes less important.
The company starts valuing the great salesmen, because they’re the ones who can move the
needle on revenues, not the product engineers and designers.
So the salespeople end up running the company.”
Has his worst fear come true?
When working on stories like this that take a significant amount of research, I know how
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Thanks for watching.
I’m Cindy Pom