What Cook hasn’t done is launch another product as successful and disruptive as the iPhone, but he’s found ways to keep Apple growing without that.
“It’s possibly the most successful handoff from strength to strength in corporate history,” Mike Bailey, director of research at FBB Capital Partners, said of the transition from Jobs to Cook. “Apple, frankly, needed a cheerleader and a politician, possibly more than a micromanaging, stressed out founder.”
Bailey added: “You’re maintaining the empire, as opposed to building one.”
The growth of services
A month after taking over as CEO, Cook announced the launch of the iPhone 4S. Since then, Apple has released nearly two dozen more versions of the iPhone at a wider range of price points, along with new generations of the iPad, Mac and MacBook. Cook has also overseen the introduction of new hardware products — most successfully, the Apple Watch in 2015 and AirPods in 2016.
But even more important than the new devices brought to life under his leadership is the growth of Apple’s services business.
“From a hardware standpoint, I think you can make the argument that it’s been more iterative than revolutionary, but I think that diminishes his contribution to the company,” said D.A. Davidson analyst Tom Forte, adding that Cook expanded the notion of what Apple is. “He said … ‘What can Apple be? Apple can be a music subscription service, Apple can be a fitness subscription service, Apple can be much more than the App Store.'”
“He kept the iPhone party going, but he solved a boom-bust problem by exploding their services business,” FBB’s Bailey said.
Apple still brings in hoards of cash each year from iPhone sales. But now, it also has the more consistent, higher margin profits from subscription services to act as a buffer as customers hold onto their devices for longer. Services also give consumers yet more reasons to choose Apple hardware over others, and helps the company eke out more dollars from each person that buys one of its devices.
“An argument can be made that they’re [still] heavily dependent on the iPhone,” Forte said. “I’m still trying to envision what the future looks like and what happens when the smartphone is no longer the center of the universe.”
Then there’s the question of who will take over leading the world’s biggest company when Cook does step down. Jeff Williams, Apple’s current chief operating officer, who has been dubbed Tim Cook’s Tim Cook in the tech press, would be an obvious choice if he were taking over now. But at just two years younger than Cook, that succession plan could be more questionable in even a few years, Bailey said.
“It doesn’t look like there’s another insider, number two, ready to go, so I do think that’s something Apple’s going to have to start to address over the next two years,” he said.