When Tim Cook took over from Steve Jobs three years ago, the chances he could continue Apple’s stellar run appeared slim. The iPhone accounted for more than half of Apple’s revenue and the bulk of its gross profit. At the same time, the rise of phones made by Samsung Electronics and other companies that ran Google’s free Android operating system left Apple with a shrinking share of the smartphone market. A huge part of Apple’s business hinged on what seemed like a doomed strategy, evoking its defeat to Microsoft Windows in the PC battle of the 1980s and ’90s.
Mr Cook’s professional background is in managing supply chains, not changing the character of sprawling, complicated, ego-filled organisations. Yet three years later, veteran Apple executives repeatedly and emphatically say they want the new boss to get credit for pulling off one of the more improbable high-wire acts in business history. “If he gets a little bit of recognition from the outside world, that is great. He deserves a lot more than he is going to get,” says Eddy Cue, the company’s senior vice-president for internet software and services.
Mr Cook did not take control of Apple under anything like ideal circumstances. “Even though Mr Tim accepted the responsibility of being the chief execuitve with all the enthusiasm you would expect,” says Robert Iger, Walt Disney’s chief executive and a member of Apple’s board, “it was dampened by a very deep sense of mourning. It made the transition hard, not just for Mr Tim but everybody initially. He had a lot to prove.”
The company Mr Cook inherited was broken up into specialised groups devoted to hardware, software design, marketing and finance, all working separately and sharing little information with each other; they did not need to because the overarching vision resided in Mr Jobs’s head. After Mr Jobs died, say several people who were there at the time, it was not clear such a decentralised structure could survive without a powerful guiding voice at the top. For the first few months, no one had a clear mandate to make big decisions, and teams were tussling for turf.
The decisive moment for Mr Cook came at the end of his first year as chief executive when he fired Scott Forstall, one of Mr Jobs’s most trusted lieutenants. Mr Forstall had led software development for the iPad and iPhone; he was also divisive and responsible for the poorly received Apple Maps and Siri voice recognition service. There was an audible gasp in Apple’s offices when the dismissal was announced, say people who were there. Mr Cook immediately convened meetings with senior managers to explain how the new structure was going to work. Jonathan Ive, Apple’s head of design, was given control over the look and feel of iOS, while development of the mobile operating system was consolidated with Mac software under Craig Federighi, the senior vice-president for software engineering.
It was a plan designed to break down walls and extinguish infighting.
Collaboration may be a virtue, but Mr Cook insists it is more of a strategic imperative. Aligning thousands of employees is crucial now that “the lines between hardware, software, and services are blurred or are disappearing,” he says. “The only way you can pull this off is when everyone is working together well. And not just working together well but almost blending together so that you cannot tell where people are working anymore, because they are so focused on a great experience that they are not taking functional views of things.”
Mr Cook’s culture has not suited everybody. To one former senior designer, accustomed to spitballing sessions with Mr Jobs to go over details as minute as the look of screen icons, the company no longer has the same allure. He says he left because Apple grew too large and that products once created in small groups are now done in sprawling teams. Others chafe at Mr Cook’s insistence on financial discipline; in meetings once devoted to the hallowed act of reviewing products, he asks managers pointed questions about spending and hiring projections, says a person involved. Staff from finance and operations now sit alongside engineers and designers in product road map sessions with key component partners.
Mr Cook also continues to micromanage areas at Apple where he has the most expertise. He still holds Friday afternoon meetings with senior managers in charge of the company’s vast supply chain, much to the chagrin of some who’d hoped his attendance, and mercilessly detailed questions, would fall off after he became the chief executive.
≥≥≥
“Excuse my September allergies,” says Jony Ive, rubbing his nose as he settles into a black leather seat in Apple’s executive offices. Mr Ive has become a design legend over the past 15 years, having overseen the look and feel of the original iPod (2001), iPhone (2007), and iPad (2010). His very name — three syllables, no unnecessary letters — fits his minimalist aesthetic. He has the delicate voice and precise diction you’d expect, but he is thickly built, and in suede chukka boots, loose-fitting blue-and-white-striped painter’s pants, and blue T-shirt with glasses hanging from his neck. The world’s most famous designer could easily be mistaken for the guy who fixes your sink.
With an Apple Watch wrapped around his hand brass-knuckle style, Mr Ive reveals that the project was conceived in his lab three years ago, shortly after Mr Jobs’s death and before “wearables” became a buzzword in Silicon Valley. “It’s probably one of the most difficult projects I have ever worked on,” he says. There are numerous reasons for this — the complexity of the engineering, the need for new physical interactions between the watch and the human body — but the one most pertinent to Mr Ive is that the Apple Watch is the first Apple product that looks more like the past than the future. The company invited a series of watch historians to Cupertino to speak, including the French author Dominique Fléchon, an expert in antique timepieces. Mr Fléchon says only the “discussion included the philosophy of instruments for measuring time” and notes that the Apple Watch may not be as timeless as some classic Swiss watches: “The evolution of the technologies will render very quickly the Apple Watch obsolete,” he says.
Mr Ive, 47, immersed himself in horological history. Clocks first popped up on top of towers in the centre of towns and over time were gradually miniaturised, appearing on belt buckles, as neck pendants, and inside trouser pockets. They eventually migrated to the wrist, first as a way for ship captains to tell time while keeping their hands firmly locked on the wheel. “What was interesting is that it took centuries to find the wrist and then it didn’t go anywhere else,” Ive says. “I would argue the wrist is the right place for the technology.”
Mr Ive’s team first tried using the same pinch-to-zoom touchscreen they had invented for the iPhone, but the screen was too small and their fingers obscured the display. A year into the project, the group started toying with what became the Apple Watch’s defining physical feature: “the digital crown,” a variation on the knob that is used to wind and set the time on a traditional wristwatch. By pressing or rotating the crown, Apple Watch users can return to the home screen, zoom in or out, and scroll through apps.
Watches are as much about fashion as functionality. Mr Ive and his colleagues indulged their obsession for detail and designed three collections of devices made of different materials and seven watchbands with their own features and flourishes. Mr Ive handles each of the watches with the proud familiarity of a father, demonstrating, for example, how links can be plucked off a stainless steel band by pressing two buttons, no specialised jeweller’s tool required. In another bit of engineering cleverness, the watch’s packaging doubles as a charging stand; wearers nestle the watch against an inductive magnet inside the watch box to recharge it. (How often they’ll have to recharge remains unknown. Apple has not yet announced specifications on the watches’ battery life.)
≥≥≥
By last summer, with Apple’s stock down by as much as 40 per cent from a record high because of concerns about the lack of new products, Mr Cook was ready to accelerate the project. (The stock, now at about US$100, has recovered all that ground and then some.) Apple insiders say that while an executive named Dan Riccio, who leads hardware engineering, would have been the obvious choice to take over the Watch programme, Mr Cook assigned it to Jeff Williams, 51, senior vice president for operations.
Mr Williams is Mr Cook’s go-to guy — he vets possible acquisitions, coordinates with Foxconn Technology and other manufacturers, and oversees the logistics needed to get millions of devices from Asian factories to stores around the world. He is an uncanny Cook clone: tall, soft-spoken, and an avid fitness buff with an inexhaustible memory for operational details. Both men have MBAs from Duke University and spent early parts of their careers at IBM. In the new Apple, he is Tim Cook’s Tim Cook.
Mr Williams took over a team that had little in common with the small groups that created the Macintosh and iPhone, which considered themselves renegades operating in secrecy from other colleagues. The watch team included hundreds of engineers, designers, and marketing people and was the kind of cross-company interdisciplinary team now common under Cook. Apple, which has more than 1,000 chip designers, built the new S1 processor that powers the watch. Metallurgists responsible for the casing for Macs and iPhones devised a stronger gold alloy for the premium model of the watch, and Apple’s algorithm scientists studied how to improve the accuracy of the watch’s heart rate sensor.
Mr Williams is unapologetic about the Apple Watch missing this year’s holiday season. “We want to make the best product in the world,” he says. “One of our competitors is on their fourth or fifth attempt, but nobody is wearing them.” Mr Cook also preaches patience. “We could have done the watch much earlier, honestly, but not at the fit and finish and quality and integration of these products,” he says. “And so we are willing to wait.”
Critics of Apple say the watch’s user interface is confusing and that it is not entirely clear whether there’s a “killer app” or what, if anything, the watch does better than a smartphone. Prices start at $349, which is more than most users will pay for an iPhone 6 with a two-year contract.
Mr Cook says he wishes he could make the device more affordable, particularly since the company boasts its potential to help customers manage their health and wellness, but he will not compromise Apple’s large profit margins to make it happen. (Mr Cook theorises that employers eager to see their workers become healthier may subsidise the device.)
Mr Cook sees the watch as a way for customers to manage their fitness and improve their daily lives and as an ever-present remote control for their televisions, home appliances, and online relationships. “I think it is the beginning of a very long run,” he says.
business@thenational.ae