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

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?
Written by Jason Hiner, Editor in Chief
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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