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Apple After Jobs: Cook's Real Challenge

A year after the death of its charismatic leader, Apple is thriving. But CEO Tim Cook's success may depend on content services--not finding another iPad.

Apple One Year After Steve Jobs: Hits And Misses
Apple One Year After Steve Jobs: Hits And Misses
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Steve Jobs had it easy. His second coming at Apple coincided with periods of remarkable technical change: The creation of the Web in the mid-'90s, and the advent of the mobile era a decade later. Jobs had the opportunity, vision, acumen, resources, and luck to create three products--the iPod, the iPhone, and the iPad--that would transform the company he co-founded in the 1970s from Apple Computer, Inc. to one of the world's most successful brands, Apple, Inc.

In so doing, Jobs transformed the world as well. The iPod and iTunes helped normalize paying for music downloads. The iPhone made the Web functional on mobile devices and brought touch-based interaction with personal devices into the mainstream. The iPad amplified the iPhone revolution by providing enough screen real estate to challenge the need for mouse-driven desktop computing in a wider variety of scenarios.

And there's more: Jobs allowed third-party developers to add value to the iOS platform, creating a mobile development gold rush. He transformed mass market software distribution, licensing, and pricing with the iOS App Store and the Mac App Store. So successful were his innovations that Amazon, Google, Intel, Microsoft, and others all have apps stores and have adopted similar business strategies. Mobile phone makers all have touch-screen phones inspired by the iPhone.

[ The recent map application flap wasn't Apple's first mea culpa. Read Apple's Top 20 Public Apologies. ]

But Jobs' success wasn't simply the result of his years of tech industry experience. It was made possible by the failings of Apple's competitors: broad industry disinterest in refined design; a focus on maintaining existing revenue streams rather than innovation; lack of appreciation of what platform ownership means once computing moves beyond the desktop; and underestimation of the value of controlling both software and hardware.

Microsoft chairman Bill Gates in 2000 showed off a tablet PC prototype at the Comdex trade show. In 2012, two years after the launch of Apple's iPad, Microsoft is finally taking the tablet market seriously with its forthcoming Surface device. It squandered a decade lead. And things have gone even worse for HP, Nokia, and RIM. Only Google has managed to keep pace, with Amazon arriving on the scene rather unexpectedly.

Tim Cook, Jobs' successor as CEO of Apple, has a more difficult challenge. First, he's not Steve Jobs. Talk about a tough act to follow. At least, Cook shines when compared to Steve Ballmer, who took the reins at Microsoft in 2000 when Bill Gates stepped aside. Microsoft was the most valuable company in the world in December 2000, worth about $510 billion. Today, its market value is about half that, $247 billion.

It won't be possible to truly compare Cook's leadership in financial terms for another decade, but so far, he's doing well: Apple was worth $349 billion on August 24, 2011, when Steve Jobs stepped down. A year later, the company was worth $627 billion, and is close to that high today.

Whether Cook can rival Jobs as a steward of new products will depend on whether there's an opportunity in consumer hardware to match the iPod, iPhone, and iPad. At the moment, there isn't an obvious contender that would benefit from an Apple makeover or would fit Apple's hardware-oriented business model.

Apple is said to be working on its own TV, but TVs don't really matter from a consumer technology perspective. They are mainly a commodity user interface for watching video. TVs are fundamentally uninteresting as computing devices because they're designed for content consumption rather than content creation, like computers, and because they don't support computational operations on content. In other words, the presence of iOS or OS X wouldn't add much value to a TV.

Apple already has made it clear that it's more interested in being a content gatekeeper, through iTunes. It does that quite well through its $99 Apple TV streaming box. Eventually, Apple will offer a DVR, either through hardware, iCloud, or both. But there's no reason Apple would need to produce a TV when a plug-in box would work better and sell orders of magnitude more units at a far lower price.

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User Rank: Apprentice
10/8/2012 | 6:59:41 PM
re: Apple After Jobs: Cook's Real Challenge
Microsoft did many things well; creating standards that worked for the enterprise and the consumer made the PC revolution possible on a large scale in a way that Apple could never have accomplished.

But Microsoft did one thing that has had a very deleterious effect on us all. They got us to accept mediocrity as the norm. I well remember how pleased we were when Windows 95 came out because it "only" crashed about once a week. I used to ask people if they would buy a toaster that only broke once a week. The response was always "That's different!", to which my question was "Why?"

When Apple messes up it does so big time. The folks at Apple have some serious soul searching to do vis a vis their QA processes after the latest maps debacle. But overall the quality of Apple's products, both design and build, is stellar. They have raised the bar for everyone, including Microsoft.

Like em or loathe em, we owe them one for this.
Tom Mariner
Tom Mariner,
User Rank: Strategist
10/7/2012 | 11:49:15 AM
re: Apple After Jobs: Cook's Real Challenge
If you're a tech exec, write this quote from Mr. Calburn's article on a rock: "It was made possible by the failings of Apple's competitors: broad industry disinterest in refined design; a focus on maintaining existing revenue streams rather than innovation; lack of appreciation of what platform ownership means once computing moves beyond the desktop; and underestimation of the value of controlling both software and hardware."

Think Kodak, whose management, as Jobs was taking Apple to world leadership, ignored the caution above to destroy an icon that ruled an industry for a century.
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