During the late Steve Jobs’ time in power as CEO, “Think Different” became Apple’s creed. Tim Cook, current Chief Executive Office of Apple is embracing all together a different idea that would have appeared crazy to the late Steve Jobs.
Apple’s pending acquisition deal with streaming musing and headphone making company Beats Electronics for $3.2 billion is an example of Cook’s deviation from his predecessor. Jobs always had great level of confidence in his company’s innovative powers and wouldn’t spend a large amount of money on acquisitions.
Tim Cook was appointed as CEO of Apple in late August 2011; it was approximately one and a half month before Steve Jobs died. Cook is kind of starting to put his own mark on Apple. Cook is drifting from Jobs’ practice by making commitment to return $130 billion to shareholders through stock buybacks and dividends.
Apple displayed more social responsibility under Cook’s leadership by improving labor conditions in their device assembling factories oversea. Also, steps taken to reduce carbon footprints by reducing pollution caused by Apple’s gadgets and data centers.
Change in the management looks to have changed the creed of the company. It has started to look more like any other company without innovation. Jobs always tried to come up with innovative products such as iPhone, iPod & iPad and made revolutions. Right now the company is concentrating on upgrading existing productions and finding ways to make bulk profits after Cook’s take over.
“Jobs wanted Cook to step out and be different,” says longtime technology analyst Rob Enderle. “But I think he wanted (Cook) to do the things that were central to the business, not things that Jobs thought were stupid,” he added.
Though Cook has repeatedly assuring investors and customer that Apple would continue to invent “insanely great” products, iPad was the last innovative product released in April 2010. iPad was released 18 months before Steve Jobs died of cancer.
Aside, Google launched its Google Glass and Samsung unveiled Gear Smartwatches. Nest was purchased by Google for $3.3 billion in January. Nest makes internet connected housewares and appliances, by former Apple designer, Tony Fadell.
“We’ve got some great things that we’re working on that I’m very, very proud of and very, very excited about,” Cook told analysts in a conference call last month. “But, for us, we care about every detail and when you care about every detail and getting it right, it takes a bit longer to do that and that’s always been the case.”
It was pointed out that there were other smartphones, tablet computers and digital music players before Apples devices in those areas, Cook said “It means much more to us to get it right than to be first,” that sounded like an echo of Steve Jobs.
Wall Street is still taking a wait-and-see attitude with Cook. Apple’s stock ended last week at $585.24, well below its peak of $705.07 reached in September 2012, but still a 56 percent gain since Cook became CEO. That’s just slightly behind the 60 percent increase in the Standard & Poor’s 500 index during the same period. Despite the lag, Apple’s market value is the highest in the world at about $500 billion.
Cook gave few clues about the new products Apple is working on, the possible products could be internet connected watch, a suit of mobile application for managing health, a digital wallet and a new system that can easily toggle between traditional television and internet videos. But we can expect a new iPhone to be released in August of September with a larger screen.
“We have not seen any dramatic product changes to suggest Apple has evolved a lot from where it was three to five years ago, but it sure feels like the company is pregnant and we will soon know a lot more,” says Forrester Research analyst Frank Gillett. “If a Beats acquisition is the biggest news of the year, then it will be a bust.”
Hip-hop artist Dr. Dre and music executive Jimmy Lovine together found Beats Electronics. A line of fashionable headphone and audio equipments would be given to Apple those are very popular among teenagers and young adults. Beats launched music-streaming subscription service earlier this year, Apple would gain it too.
Apple’s own streaming music service hasn’t gained as much traction as the company expected and says Erick Joachimsthaler, founder and CEO of Vivaldi Partners Group: “If you look at the current music market, downloads are declining for iTunes. So Apple needed to do something.”
Apple has $150 billion in cash, so buying Beats would be affordable and easy. However it still remains as a puzzle why Apple would even think of buying Beats when it already owns iTunes and could license technology to make even better headphones on it’s own.
“Apple’s brand is way stronger than Beats,” Gillett says. “It’s a head scratcher.”
In last month’s conference call, Cook acknowledged to being “on the prowl” for acquisitions.
“We look for companies that have great people and great technology and that fit culturally and we don’t have a rule that says we can’t spend a lot or whatever,” he said. “We’ll spend what we think is a fair price.”
Yukari Iwatani Kane, the author of a new book called “Haunted Empire” that explores how Apple has changed since Jobs’ death. The Beats deal looks like a distress signal to him.
“When companies start expanding their accessory line-up, it’s a worrisome sign for innovation,” Kane says. “Accessories have always been an easy way for any company to beef up their sales.”
Cook has always been a highly respected executive; he was focusing on managing Apple’s product inventor and needs of component before replacing Jobs position when he was fighting cancer, specifically the final seven years.
Cook is “the guy who liked doing everything that Steve Jobs hated to do,” Enderle says. “When you make Jobs’ polar opposite the CEO, it’s probably not going to work out well.”