Tim Cook: "I feel great right now and the date's not in sight. Ten more years is a long time - probably not 10 more years." Photo / AP
As Tim Cook reaches a decade at the helm of the iPhone maker, the world's most valuable company has a tough choice over its next leader.
When Steve Jobs stepped down as Apple chief executive in August 2011, many wondered if the company's age of innovation he had led might be over. Few, though, were surprised at his replacement.
Tim Cook, the longtime chief operating officer and master of its worldwide supply chain, had been preparing for years for the thankless task of succeeding Jobs. Apple's founder had been diagnosed with pancreatic cancer eight years earlier and had taken repeated leaves of absence during which Cook stepped in.
"Steve told me that he trusted Tim absolutely," says Mike Slade, Jobs's former strategic adviser. "I was like, 'that's good enough for me'. That's about as high a compliment as you could get from Steve Jobs."
This Tuesday marks 10 years since Cook was made chief executive on a permanent basis, a few weeks before Jobs died. During his decade in charge, questions about Apple's ability to produce the next hit product have never quite gone away, but few could argue with the success that Cook has had.
A decade ago, Apple's annual sales amounted to US$108 billion ($158 billion). This year, they are forecast to be about US$370 billion. Days before Jobs stepped down, Apple briefly pipped ExxonMobil as the world's most valuable company when its market value hit US$343 billion. This week, shares hit a new record high to value it at more than US$2.4 trillion – an average return for shareholders of 22 per cent a year.
"If you go back to when he took that role, everyone said 'no chance, this supply chain guy hasn't got the charisma'. It was seen as a safe, but rather conservative bet. And if you look at what he's delivered in his tenure it is nothing short of astonishing," says Ben Wood, an analyst at CCS Insight.
Wood says Cook has effectively delivered a new hit product, at least as far as investors are concerned, in the form of Apple's digital services business such as the App Store, Apple Music and iCloud, which turn iPhone owners into monthly spenders. "He has made the iPhone franchise the most lucrative piece of consumer electronics in history."
The Apple Watch and wireless AirPods, the two most successful new products of the Cook era, are "bigger than almost every electronics business out there".
But as Cook approaches his second decade in charge of the world's biggest company, gossip around his eventual departure has become louder.
"I feel great right now and the date's not in sight. But 10 more years is a long time and probably not 10 more years," he told The New York Times earlier this year, when asked if he would do another decade.
Cook turned 60 last year and this month will receive the final tranche of a 10-year share programme.
Last September, Apple unveiled a new plan designed to keep Cook at the helm until 2025, although his 23-year career at the company and position as one of America's most highly paid chief executives has already made him a billionaire.
For years, the most obvious successor has been seen as Jeff Williams, Apple's chief operating officer, who has been in Cook's former role since 2014. Although not a household name, Williams has been in charge of the company's work on new products since 2019.
He has become a more regular face at Apple's keynote events, in which face time with the millions of worldwide viewers is carefully orchestrated, unveiling new Apple Watches and the company's health initiatives, regarded as an increasingly important part of its future.
Like its strictly guarded product plans, Apple has given no indication of who might follow in Cook's footsteps, although the company's corporate governance guidelines specify that its board must "conduct an annual review of management development and succession planning for senior management, including the CEO".
Departing is up to Cook, however, and he may feel that some business remains unfinished.
As well as the financial success he has overseen, Cook has played the part of diplomat and activist. Multiple people who have dealt with him pointed to his 2014 decision to come out as gay – the first Fortune 500 boss to do so – as a key moment for the otherwise notoriously private executive. Unlike many bosses, Cook publicly engaged with Donald Trump, seeking to limit the former president's trade wars or to exempt Apple from certain tariffs.
He has also positioned the company as a defender of liberties, particularly privacy, calling for regulation and taking shots at rivals with spottier records whose businesses rely on data gathering.
Those years of credential building mean Cook is likely to take Apple through the current regulatory storm. Watchdogs and rivals have taken aim at the company's lucrative App Store, one of the golden geese of Cook's push into digital services, criticising Apple over the fees it charges app developers to receive payments in the store.
One Silicon Valley executive suggests Cook may still want to shake off perhaps the one remaining criticism of his decade in charge: that he has not produced anything to match the iPhone.
The two most likely candidates for that are an augmented reality headset, an early version of which is expected as soon as next year, and an electric car, a project that has repeatedly changed direction.
Recently, Apple has been negotiating with manufacturing partners about a potential launch in the middle of the decade. One Apple investor suggests that an era-defining acquisition could be a reasonable bookend, as Disney's US$71 billion takeover of 21st Century Fox closed Bob Iger's reign.
But if Cook is considering his eventual departure, he is unlikely to be the only one at Apple to do so.
The company's inner circle, the most recognisable faces to followers of its events, continues to be a core of Jobs-era executives who have been at the firm for decades. Services chief Eddy Cue and marketing boss Greg Joswiak, both 56, have been at Apple since 1989 and 1986 respectively. Williams, 58, joined in 1998, and retail chief Deirdre O'Brien has been there for 30 years. Software chief Craig Federighi first joined in 1997, when Apple rehired Jobs after buying his computer company NeXT.
Lifers are rewarded at Apple, partly because outsiders have often struggled to adapt to the company's culture. John Browett, the former Dixons boss hired to run Apple's retail operations, was fired by Cook after just six months in 2012.
Angela Ahrendts, the former Burberry chief hired to replace Browett, lasted five years, departing after an expensive but not universally welcomed refurbishment of the company's stores. Her exit was surprising as she had been touted as a potential successor to Cook.
Jobs's core has already started to split. In 2019, Sir Jony Ive, Apple's long-time design chief, left the company after 27 years, and last year Phil Schiller, a close friend of Jobs who ran the App Store and Apple's marketing, stepped down from a full-time role.
Perhaps recognising that succession will be about more than Cook, the company has started to introduce a new generation of executives into its recent, virtual, product launch events.
A decade into Cook's leadership, his departure does not seem imminent, but in keeping with his meticulous running of the company, there is undoubtedly a plan.
One long-time business acquaintance suggests that Apple may seek to return to putting a product genius in charge, rather than somebody similar to Cook. "They got it right, because they specifically didn't try to replace Steve. Perhaps they need another visionary."
The fact that succeeding Cook could be more difficult than replacing Jobs may be a testament to his success, but it will not make doing so any easier.
• Games and other apps on the iPhone can only be downloaded through Apple's App Store. While the majority of apps are free, those that are paid or allow paid upgrades must use Apple's in-app purchase system, which takes 30 per cent of all one-off transactions.
• For example, when gamers buy £10 worth of V-Bucks, Fortnite's digital currency, in the iPhone app, Apple would take £3. Epic Games, Fortnite's developer, would take the remaining £7. This cost covers hosting, payment fees, the cost of moderating the App Store and the developer tools to make apps - although the store makes a healthy profit.
• In recent years, some developers have complained about this fee. The likes of Spotify and Netflix have stopped offering subscriptions through their iPhone apps, requiring users to sign up elsewhere, such as the web.
• In August 2020, the video game Fortnite was removed from the App Store after it offered discounts for using an alternative payment method, in violation of Apple's rules. Epic Games is now suing Apple, claiming it is abusing a monopoly over the distribution of iPhone apps.
• Apple says most apps use the store for free, and that its 30 per cent fees are similar to the rest of the industry, such as Google and Samsung's app stores, and the video game download services on PlayStation, Xbox and Nintendo Switch.
• From 2021, it will reduce its App Store fees to 15 per cent for small businesses earning up to US$1 million.
'This decision has not been made lightly'.