It's the question the Mac maker never wanted to ask.
But we all knew it was coming. Even if Steve Jobs had been able to continue as CEO, he could not hold that position forever. Eventually Apple (NASDAQ: AAPL) was going to need a new chief executive to take over.
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In accordance with Jobs' retirement, Apple's Board of Directors selected Tim Cook as the company's new CEO. Having spent more than a decade with Apple, Cook is believed to be the most capable man for the esteemed position. Jobs hired him away from Compaq to, as CNNMoney puts it, “fix Apple's production mess.” Cook did so by closing factories and warehouses around the world, replacing those costly assets with contract manufacturers. Before Apple and Compaq, Cook spent several years working in the personal computer division at IBM (NYSE: IBM).
This is an impressive resume, no doubt. But isn't it odd that Apple – a manufacturer of personal computers – chose a CEO whose previous employers include corporations that no longer make personal computers? Hewlett-Packard (NYSE: HPQ), the owner of Compaq, just announced that it is going to spin off its personal computer business. IBM got out of that industry several years ago. While it wasn't Cook who caused either company to make this decision, you have to wonder: where does this leave Apple? Where will a man who admittedly despises inventory take the electronics manufacturer? Will he, like so many chief executives before him, take his cost-cutting measures one step too far?
An Army Of One…Thousand
It would be naïve to assume that Apple is and always has been a Steve Jobs entity. It hasn't. It is a corporation made up of thousands of creative and innovative employees – men and women who brought us impeccable touchpads, remarkable touch screens, and a clever mobile operating system that is changing the world of personal computing.
They, together with Jobs, are the face of Apple. Going forward, the company will continue to rely on them just as much as it has in the past. They will be the ones who attempt to come up with entirely new products. They will be the ones who bring us the next evolution in smartphones, tablets or computers.
So unless they all decide to resign with Jobs, it is safe to assume that Apple will still be Apple for quite some time.
The real problem for Apple is not what you see today – it's what you might see tomorrow.
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Jobs was a great CEO not only for his vision for new product trends but for his ability to make things happen. He was an expert at picking the right people for each position, as evidenced by the success Cook had in correcting Apple's inventory issues. Without Jobs, Apple loses that vision. Now someone else is in charge of forming the teams that will make up the future of Apple.
This is where things get really scary. Cook may very well be an incredible CEO. He may have what it takes to fulfill the company's mission. But if he hires just one bad apple, so to speak, that man or woman could bring down the entire company. How? In short, he or she will one day hire a couple more bad apples; later on, those men or women will do the same. In this scenario, it wouldn't take more than a decade to fill the entire company with rotting fruit, intriguing the senses of flies and maggots while scaring off thousands of shareholders.
These rotten executives would hurt Apple by employing the same mistakes of their peers. If they didn't insist on using cheaper materials they would surely be tempted to release more products (ex: a new version of the iPhone every six months) to cash in on consumers wanting the latest and greatest. This would quickly dilute the value of the brand while decreasing our interest in new products.
Product delays could be an issue as well, as greedy execs frequently use them to increase the hype of upcoming releases. As it stands now, Apple loves hype – what will stop a new batch of executives from going overboard in this regard?
Right now, Apple is a hardware company. It makes more money selling hardware than anything else. But hardware is big, bulky and expensive. The company's new CEO hates big, bulky and expensive things because they create inventory. Apple has already done all that it can to move consumers from physical media to digital (downloadable) software. What will Cook do if he's tempted to move us away from hardware? Will the cost of hardware ever be so painfully high that Cook becomes tempted to get Apple out of the hardware business?
One of the benefits that Microsoft (NASDAQ: MSFT) has always had over Apple is that it can sell its software to anyone. Windows 7 has reportedly been licensed to more than 400 million computers worldwide. If Cook ever realizes that he could compete in this market and sell Mac OS to consumers without the need for storing or manufacturing big and bulky hardware, he may be tempted to do so.
And then Apple wouldn't really be Apple anymore, now would it?