Will Cook be able to take heat at Apple?

Steve Jobs was always going to be a hard act to follow. His successor, Tim Cook, has won over staff and investors after just six months in the plum post, but can he maintain the pace and keep Apple fans on board, asks Kyran Fitzgerald

In October, Apple boss Steve Jobs died after a lengthy period of illness, prompting global tributes.

Six months on, how is his successor, Tim Cook, faring? So far, so good, would appear to be the dominant response.

A recent poll of Apple staff by a company called Glassdoor.com has given Cook a 97% approval rating.

Investors, too, have been voting confidence in the new man. The share price is over the $600 mark. Apple’s market value now exceeds $575bn. It is the world’s largest company in terms of turnover.

Cook has just announced that Apple is to pay its first dividend — $10bn this year — since 1997.

The company is finally dipping into its cash hoard of almost $100bn.

This represents a significant break from the Jobs’ era. Jobs hated dividend payouts and had not permitted one since his return to the company in 1997.

His view was that earnings should be recycled into ongoing research projects and acquisitions.

Cook believes Apple Inc is now sufficiently cash-rich to allow for the spreading of some jam, a view that no doubt finds favour with many of the 2,000 or so on the books at the European HQ in Cork.

Dividend or no dividend, analysts are now drooling over the prospect of the shares reaching $1,000 each in value.

Capital appreciation, after all, is the name of the game as far as investors are concerned.

And the prospects of this coming to pass?

Some analysts caution against a repeat of dotcom bubble euphoria, but others point to the fact that Apple’s price-earnings ratio, at around 18, is actually below the average of 21 for Nasdaq companies.

Of course, many sceptics remain to be convinced, wondering out loud whether Cook is simply spending a munificent inheritance bequeathed by his predecessor.

And what an inheritance that is.

In 1992, Apple reported earnings of just over $500m. By 2014, this had soared to $14bn, following the launch of the iMac (1998), iPod (2001) , and iPhone (2007) with the iPad soon to follow.

The passing of Jobs caused some ripples in the financial markets but his successor had been well-groomed and was waiting in the wings. As Jobs’ illness took its toll and as he grew increasingly frail, the baton was gradually passed to Cook as chief operations officer.

Increasingly, Cook was pushed forward as the spokesman in media and analyst briefings.

Many have wondered how a quietly spoken bachelor from America’s poorest state, Alabama, can possibly fill the boots of Jobs, almost universally reckoned to be the greatest techno-visionary and showman of his generation by a country mile.

In many senses, his real successor is Mark Zuckerberg, founder of Facebook, a man who has already been profiled on celluloid.

A movie on Jobs, too, is in the pipeline, with Ashton Kutcher in the frame.

But will the nerdish Cook ever attract such flattering attention?

Jobs was part Buddhist New Ager, part ranting visionary. Cook may wear the Jobs uniform of jeans and trainers, but in many respects the two men could hardly be more different.

Coming from the Deep South, son of a Gulf of Mexico shipbuilder, Cook made his name as the man who makes the trains run on time, the work-in-motion guy.

In a 2008 profile entitled, The Genius Behind Steve, Fortune magazine was an early endorser of the Cook approach to business.

It highlighted his skills when it came to supply chain strategy.

Anticipating huge demand for the iPod Nano, a big user of flash memory, Cook ensured that Apple prepaid $1.25bn to key suppliers to corner the market in a specific type of memory key to Nano production. The move is akin to that of the Chinese as they set out to grab hold of key sources of raw materials.

Blake Johnston of Stanford University said: “Way too much of the supply chain has been about taking the last cent out. Apple doesn’t do that.”

Cook sets out to use Apple’s cash hoard to protect products from the effects of input shortages, aware of the huge demand out there for the latest Apple offering.

He has arranged to have suppliers move next door to Apple factories to reduce inventory which he regards as “fundamentally evil”.

But are such skills enough for the boss of a company of Apple’s size and cultural dimensions?

Personal profiles describe a chillingly detached workaholic figure who often starts work at 4am and is devoted to working out, preferably on bicycles. He is a devotee of cyclist Lance Armstrong. Other heroes include Bob Dylan and Bobby Kennedy, younger brother of JFK. Cook observed Kennedy was happy to operate in his brother’s shadow — some draw a parallel with the Cook-Jobs relationship.

The younger Cook cut his teeth at the IBM research complex in North Carolina. He is remembered there as a polite individual operating in a famously tough environment.

A joke did the rounds about IBM at the time : “What’s the difference between IBM and a cactus? The cactus has its pricks on the outside.”

Less flattering profiles paint a picture of a detached character who has been known to pack executives off to China at a moment’s notice, without time to pack a change of clothes.

The company is not invulnerable, appearances to the contrary.

Apple products are hugely popular in China, but the Korean group Samsung presents a growing challenge.

The corporation has also attracted bad publicity over the poor working conditions in factories run by its key Chinese supplier, Foxconn. There have been reports of employees being driven to suicide because of the unrelenting work pressures and lengthy working week (up to 76 hours).

This is the dark satanic mill side to the glitzy entertainment products so beloved of consumers.

Looking ahead, critically, Cook will have to match Jobs in his ability to draw the best out of chief designer Jonathan Ive, a key driving force behind the Apple success story.

Ive has acknowledged his debt to Dieter Ram, the German chief product designer at Braun.

Ram outlined his 10 principles of good design. A product must be: innovative; useful; with aesthetic appeal, but unobtrusive; honest in not promising more than it can deliver. It should be environmentally friendly, and not over-designed — “less is better”.

Ive endorsed this approach, but he must be kept on side and ticking over.

The Cook-Ive relationship could be key to the future of a company which has confounded predictions since the mid-1990s. It will almost certainly determine whether Cook can continue to fill the largest boots in early 21st century information and communications technology.

It is the subtle match of creativity and efficiency that has thrust Apple to the forefront of the entertainment business.

It remains to be seen whether a master of logistics can keep it there.

Getting to know Tim Cook

* Born: Alabama, 1960.

* Educated: BA, Industrial Engineering, Auburn University; MBA, Duke University, North Carolina.

* Career: Computer reseller.

* 1986-98: Worked in PC logistics for IBM.

* 1998: Joined Apple as senior vie president operations, overseeing computer manufacturing.Later appointed as head of worldwide sales.

* 2004: Filled in as CEO when Steve Jobs was sick.

* 2008: Named as chief operations officer.

* 2011: Named as chief executive.

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