How long can Tim Cook avoid taking any risks at Apple?

How long can Tim Cook avoid taking any risks at Apple?

Summary: Tim Cook has acted quite conservatively since becoming Apple CEO. While he hasn't made any big mistakes, he also hasn't pushed the company in any meaningful new directions. Will this work long-term?

TOPICS: Mobility, Apple
Image: CNET

If Apple CEO Tim Cook leads according a metaphor, it must be "slow and steady wins the race." 

Since taking the reigns from Steve Jobs in August 2011, Cook has guided Apple with a careful and conservative hand. There's been very little drama, very few bold moves, and lots of measured, incremental steps.

Depending on how you look at, you could see Cook's first two years at Apple as characterized by understated confidence or tentativeness.

Most of all, Cook has avoided taking any big risks. 

Under his leadership, Apple hasn't entered any new markets. It's only done one radical overhaul of a product, the ultra-high-end Mac Pro, which represents only 4% of all Apple sales. The most aggressive new product features it has introduced—Siri, Apple Maps, and Touch ID—have had very mixed results. Apple Maps was released before it was ready and has been a PR disaster. Siri initially garnered a lot of attention, but has been leapgrogged in usefulness by Google Now. It's still early, but Touch ID might be the best new thing launched under Cook's leadership. It ran the classic Apple play of taking a nascent technology, executing the details better than anyone else, and popularizing it for the mass market.

The boldest thing Cook has done during his two-year tenure as CEO was to fire Scott Forstall, one of Apple's most talented executives. That's not a great sign. While Forstall was legendarily difficult to work with, he was also one of Apple's most creative and innovative leaders and had a lot to do with the success of the iPhone and iPad. He was rumored to be one of Apple's future CEO candidates, so his departure clearly smells like a battle for control and influence in the post-Jobs era.

When Jobs passed away in 2011, I said that Apple had enough going for it that it could live off its current product line for a decade by simply iterating and keeping customers happy. Obviously, that was a bit of a hyberbole, but the fact is that the smartphone and tablet markets that Apple helped redefine are headed for massive global growth in the years ahead. For example, Gartner expects tablets to grow from 116 million sold worldwide in 2012 to 467 million solid in 2017 (growth of 350 million units), and smartphones to increase from 1.7 billion sold worldwide in 2012 to 2.1 billion in 2017 (growth of 400 million units). Meanwhile, personal computers will drop from 341 million sold in 2012 to 271 million in 2017.

Since Apple has the advantage of a pre-eminently strong brand and remains the most profitable mobile device maker in the world, if it simply retains its vice-grip on the high end of the market then it will naturally rise with the rising tide of mobile device sales. However, that would be a different kind of Apple than the aggressive Apple of the past decade and a half.

Maybe that makes sense given Apple's current position as the most valuable technology company in the world. But, it also draws uncomfortable parallels to the first time that Steve Jobs departed Apple in September 1985. 

In a 1995 interview, Steve Jobs said, "When I walked out the door at Apple we had a 10-year lead on everybody else in the industry. The Macintosh was 10 years ahead. We watched Microsoft take 10 years to catch up with it. The reason they could catch up with it is because Apple stood still."

Primarily, those were the John Scully years when Apple paid a lot more attention to marketing and business processes than to product development and innovation. It's often forgotten that Apple's annual sales during the Sculley era grew from $800 million to $8 billion. While 10X growth is phenomenal, it was mostly powered by the meteoric growth of the PC market itself, as it expanded from 30 million units sold globally in 1985 to 235 million units in 1995. 

While few would argue that Apple has been "standing still" in the Cook era, so far it bears more similarities to the Sculley era than to the 15-year innovation streak of Jobs' second tour in Cupertino. 

Cook and Apple will need to get more aggressive in 2014, and there are signs that it could happen. In April, Cook foreshadowed that Apple was working on "exciting new product categories" and in May he hinted that Apple is interested in wearable technology. The three most ancipated new Apple products are: 1.) a smartwatch, 2.) a high-end HDTV set, and 3.) a phablet (which would mostly just be an extension of its current mobile device lineup). Now that Apple's second fall event has come and gone, none of these products are likely to be announced in 2013, which opens the door for Apple to have a big year next year if it announces even two of those three products.

What we've seen from the Cook era so far tells us that we should expect a risk-averse Apple that's not leaning forward but mostly defending the territory it has conquered over the past decade. For Cook to shed comparisons to the Sculley era and to put Apple on course to thrive beyond just reaping the harvest on the iPhone and iPad, he'll have to take strategic risks and expand into new markets. A year from now we should have an even clearer picture of the character of the Cook era at Apple.

ZDNet's Monday Morning Opener is our opening salvo for the week in tech. As a global site, this editorial publishes on Monday at 9:00am in Sydney, Australia, which is 6:00pm ET on Sunday in the US, 11:00pm Sunday in London, and 6:00am Monday in Singapore. It is written by one of ZDNet's lead editors across Asia, Australia, Europe, and the United States.

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Topics: Mobility, Apple

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  • Pretty much doomed

    Apple OS will never make in-roads to enterprise and they are on thin ice in the consumer market.

    The so called Apple TV/smart watch/ phablet are just pipe dreams.... Apple's strategy of selling devices without including an expandable memory and charging rip-off prices for devices with more memory is not going to work any more...

    Apple may sell a lot of products in the near future as long as there are foolish consumers who believe in apple religion... but its not goanna last.
    • Apple needs a new CEO

      It's easy to find people who would make competent middle managers, like Tim Cook, or even Microsoft's Ballmer.

      It's really hard to find someone who's a visionary.

      The firing of Scott Forstall was not a good look. It looked like Cook was using Forstall as a scapegoat for the Maps disaster. Regardless of Forstall's abilities, the CEO should always take responsibility for what goes wrong. Tim Cook should have said, "It's my fault because I personally signed off on Maps." He didn't take any personal blame.

      Cook's now had ample years to show his worth. Unfortunately, Apple seems to be stagnating again. It's time for a new CEO.
      • Totally Wrong

        Tim Cook took all the blame for the maps fiasco. He publicly apologized for the maps fiasco and even tried to steer users to Google maps until they could get it fixed. That's something Apple CEO's have rarely ever done.
      • Apple needs a new CEO

        Wrong answer! This is definitely an antiquated line of thought that lessens the personal responsibility and duty of a person that is directly responsible and compensated for his role in a project that he's the SME for. the "go-to-man" if you will. It's always easy to blame the guy at the top for anything and everything that goes wrong but a CEO's role in a company is to provide leadership and vision and NOT to just sign off on things as the god of everything. On the flip-side, if the maps thing doesn't get worked out after a couple of hiring and firings, then he'll have to take responsibility for it then because he would have been the one to select that department's chief. Cook publicly apologized for this fiasco. Nope, you hold responsible the person that is primarily responsible, the SME in this case, as it was his baby...he "signed off" on his department's project telling the man at the top that it was ready to go to the masses. Otherwise, following your line of reasoning, we ought to fire Obama for Clinton's failure in Benghazi and that was her baby! On a 2nd thought, not a bad idea to fire them both.
        • Oh, the irony...

          The people calling for a new CEO at Apple are the people who would never buy an Apple product if it was to save their lives.

          In other words, like all the other "gates" and "scandals" at Apple, it's only the people who aren't interested that are priming the pumps and running with it.
          • Exactly my thoughts

            A bunch of MS shills trying to give advice to Apple. You know, MS, the company that brought you Kin, Zune, RT, Surface, Windows Phone, Vista, Windows 8, Windows CE and a lengthy list of other failed products. No thanks!
          • Irony Indeed

            Ah yes, but its apparently OK for the people that would never buy a Microsoft product (like a lot of Apple fanboys) to call for a new Microsoft CEO over and over again....
    • look who's talking

      you guys in microsoft "believe" that or you believe that?
    • Apple's been doomed forever

      Good lord knows how long that death watch has been running. Funny how it never seems to actually happen, though.
      • Even when

        Apple garnered the largest company in the world award by Market Cap. Doomed, doomed I tell you. /S
        • I always love these comments

          By these apple cultists. I especially love the one where you guys flaunt that apple is the most profitable company around, which means you are proud that you overpay for products and that the company charges you more than the competition. You guys crack me up.
          • The Circle of Stupidity

            I love how almost all anti-Apple comments seem to require that the commenter have nothing but vacuum between their ears.

            You idiots are constantly asserting that Apple is a niche player or irrelevant or derivative, yet Apple's financials handily prove beyond a shadow of a doubt that Apple is a raging success. Faced with those facts you then retreat to the "Apple overcharges" trope.

            Face it, clown shoes: consumers decide the value of a particular purchase, and 15 years of of data proves that Apple's customers get more value out of an Apple product than can be measured by the sticker price.
          • Nah!!!

            Steve Wojo's comment sounds good, but calling people idiots?
            Im sure you're referring to yourself, aren't you?
          • Price vs Value

            You've got it all wrong. Apple products do cost more but they return a higher value. The product quality and user experience speak for themselves, Apple products has the highest consumer satisfaction rate.
            Secondly, look at eBay prices for used Apple products. You can re-sell a 3 year old Apple product for 60% of the purchasing price... So in the long run, the product has a better value than any competitor...
    • Hahaha

      I can't wait to see how long THIS incarnation of OwlNet has before it gets banned. In any event, I agree with what Jason is saying. I think Apple is riding the high wave and hasn't really been innovating. I think iOS 7 was a good move and the new Mac Pro is hot. Having said that, they are moving even more away from good product practices.

      All their laptops are now sealed/glued and users pretty much cannot repair or upgrade them. They also have a few nice features like a PCI-E based SSD that no other laptop maker has gone with yet and that's great but at the same time, that's more of a high-end laptop feature than true "innovation".

      I don't care about a watch, like the Galaxy Gear, no one cares and it's a gimmick. At this point, TouchID is a gimmick....I have a 5S and like the thumb print scanner but it's not necessary. If it was used for dual-authentication, it would be great....IF they allow enterprise to use it like that.

      What they could do to TRULY disrupt the market, is to come out with an iPad type device that truly merges their OS's. Basically, they need to do the MS Surface RIGHT, before MS finally fixes their issues.

      I honestly believe the true threat to Apple's dominance is a cheap MS Surface Pro (not necessarily a MS made one). I love my Apple products as they ARE high end and work well. I would be the first one to jump on a convergence device that allowed a light tablet with GOOD battery life which has the ability to give me access to laptop style functions, like file transfers, etc. MS Pro is ALMOST there. It's still a generation or two away from being perfect but they will get there. When they do, I'll buy one. At that point, Apple will lose the market as they did before.....unless they beat MS to the punch. It's hard to see if they will accomplish it but I hold out hope. Competition only helps us as consumers.
      • Ha!

        "I honestly believe the true threat to Apple's dominance is a cheap MS Surface Pro . "

        I honestly believe anyone that thinks Apple is threatened by the Surface simply isn't paying attention.
        • You sound...

          like Sculley. How did that attitude work for Apple at the time?
          • Thanks

            But we are chock full of non-sequitors. Sell crazy some place else.
      • I get you...

        ...but a Netbook style tablet (Surface) is really not an improvement of anything on the market. A logical improvement to an iPad would be just to bundle it with Macbook Air as iPad Pro. Basically a dual screen notebook at 11" same great keyboard/trackpad then iPad detaches to be a separate touch interface, HD drawing tablet, dual screen. When the Air is closed it can sit in its compartment for reading and content. This is the proper convergence and priced right $1100-1200 Apple ships two systems.
        • OK,

          I'm no fan of the Microsoft Surface, but there is only one valid comparison to a netbook: screen size. Yes, the screen is woefully small to get any "real work" (the phrase that the MS fanboys tend to use) done. However, inside the Surface is an i5 CPU and 4 Gb of RAM and varying amounts of storage. Comparing a single core CPU netbook with 1 Gb of RAM and very little storage to a Surface or Surface 2 is ludicrous. It's like comparing a Newton to an iPad.