Tim Cook and the Rise of Apple

What is Apple?

Quick Information

Founded on April 1, 1976, by Steve Jobs, Steve Wozniak, and Ronald Wayne, Apple is an American multinational technology company that specializes in consumer electronics, computer software, and online services. The company is one of the Big Five American information technology companies. Companies parts of the “Big Five” include Apple, Amazon, Google, Microsoft, and Facebook.

The Founding

The company was originally founded to develop and sell the Apple I personal computer which they sold for US$666.66 which adjusted to inflation is $3,032 in 2020. On January 3, 1977, they rebranded as Apple Computer, Inc after Ronald Wayne left and sold his share of the company to the pair for $800, only twelve days after having co-founded Apple with Jobs and Wozniak. At the time, the computers they were marketing were out of this world. Upon release, the sales of the Apple I and II personal computers grew quickly. From September 1977 to September 1980, yearly sales grew from $775,000 to a whopping $118 million. In 3 years the duo was able to average annual an growth rate of 533%. The Apple II was introduced on April 16, 1977, at the first West Coast Computer Faire and was chosen to be the desktop platform for the first "killer application" of the business world. In December 1980, Apple went public, selling 4.6 million shares at $22 per share. In 1984, Apple released the Macintosh to the market, completely changing the game as the first personal computer to be sold without a programming language.

Disagreement and Fallout

In 1985 things took a bad turn. The decline in sales of the Macintosh because of the high price, slow speed, and limited range of available software started a power struggle between Steve Jobs and CEO John Sculley, who had been hired two years earlier by Jobs. Sculley removed Jobs as the general manager of the Macintosh division, gaining unanimous support from the Apple board of directors. Jobs resigned from Apple in September 1985. Wozniak also left the company to pursue other goals. Jobs took a few apple employees when he left to start a new company called NeXT Inc.

A Last Hope and Redemption

Fast forward a few years to 1997 where Apple was only a few weeks away from bankruptcy. Apple in the last hope purchased NeXT to bring Jobs back to Apple. On January 9, 2007, at the Macworld Expo, Jobs announced that Apple will now be known as Apple Inc. instead of Apple Computer, Inc. because this was the year the world witnessed the announcement of the iPhone. During its first 30 hours of sales, Apple sold 270,000 iPhone units. The once-in-a-lifetime invention was called “a game-changer for the industry” Apple would later achieve worldwide recognition for its success with other mobile devices such as iPads and iPods, as well newer models of computers like the MacBook Air laptop.

Tim Cook’s Era

As Jobs was diagnosed with a rare form of pancreatic cancer, he fought hard to battle against the sickness but he eventually got weaker and weaker. On August 24, 2011, Jobs resigned as CEO of Apple to focus on his declining health. He was replaced by the current leader of Apple, Tim Cook.

Graphs of Apple’s annual revenue and market capitalization from when Tim Cook took over as CEO to the most recent dates.

The Transition from Jobs to Cook

August 11, 2011, Steve Jobs who was severely ill called Tim Cook to discuss the company. Cook asked when they should meet, Jobs replied with “Now.” It was on that meeting that Steve Jobs told Tim Cook he would be the new, permanent CEO of Apple. From the outside, Tim Cook, prior to Steve Jobs’ health decline was barely ever in the running to replace Steve Jobs and without much information, the public presumed that Apple failed in its duties to work out a succession plan. The public at the time had already dismissed Cook as a potential replacement because most of what Cook did before he was CEO was highly beneficial for Apple yet all so invisible.

When Jobs resigned he wrote a resignation letter to the board that included “I strongly recommend that we execute our succession plan and name Tim Cook as CEO of Apple.”

When Jobs resigned, the board named Tim Cook CEO of Apple Inc. Six weeks later on October 5, 2011, the cancer had taken its toll. Steve Jobs was no longer with us and Tim Cook had some big shoes to fill. The iPhone was an internationally sold and beloved product. Steve Jobs was known to be one of the greatest CEOs in history. When Tim Cook took over the world had never seen such a corporate transition, stepping out of the shadow of Steve Jobs and taking the reigns to one of the world’s biggest technology companies. In the months following Jobs’ passing, uncertainty over the company was very common, “Could Apple keep their current progression going under Cook?” At the time there was a lot of pressure coming from the outside as well. Pressure from people who believed Tim Cook could not replace Steve Jobs and the company would begin its collapse. Apple’s stock price and market capitalization as a result of the uncertainty went down. Is Tim Cook a copy of Steve Jobs? No, but in a good way because he did what no one else anticipated he could do.

Growing the Company

First Actions

When Tim Cook became CEO of Apple, one of the first coups he executed was the closing of Apple manufacturing factories and warehouses, replacing them with contract manufacturing. Cook did this because he knew with contract manufacturing he would be able to produce devices faster, in larger quantities, and therefore speed up deliveries. After around a month of Cook becoming CEO, Apple announced the release of the iPhone 4S and the start of the services division, iCloud. The iPhone 4S was also the first time Apple’s integrated intelligent software assistant, Siri was introduced, inspiring other companies to do the same in later years. Still new to the position, in less than a year, Tim Cook with Apple released the iPhone 5, iPad Mini, and the 3rd Generation MacBook Pro. All of these products featured the all-new Apple Retina displays. In the same year, another Apple service is released, Apple Podcasts. On August 20, 2012, about a year after Tim Cook was named CEO of Apple, the rising market capitalization hit a then-record $624 billion, beating the non-inflation-adjusted record for market capitalization set by Bill Gates Microsoft in 1999.

The newly announced iPhone 13, iPhone 13 Pro, and iPhone 13 Pro Max. Available starting September 24, 2021.

Growth of Services

One major expansion Tim Cook brought to Apple was the incorporation of Apple services, creating a new era for Apple and building the company to fit the current generation. The first Apple service Tim Cook announced to the world was iCloud in October of 2011 and a year later in 2012, Apple Podcasts. 2 years after Apple Podcasts, Apple Pay is released. Fast forward to 2015 and Apple has released two new Apple services in the same year, Apple Fitness and Apple News. In January 2016, the company stated that it had generated over $20 billion in services sales alone during the previous year. One year later, in 2017, after reaching over $7 billion per quarter for three fiscal quarters consecutively, Apple announced that its services business was the size of a Fortune 100 company (The Fortune 500 is an annual list by Fortune magazine to rank the top 500 United States corporations by total revenue for their respective fiscal years). In 2019, Apple released three new services, Apple Arcade, Apple TV+, and Apple Card. Year after year, Apple’s service business continues to grow. In Apple’s 2020 fiscal year, services alone generated $53.8 billion in revenue.

New Introductions

Since Tim Cook became CEO he has strived to introduce and develop new lines of products. As the times change, companies must also evolve to cater to the wants of their customers; and Tim Cook has done exactly that. The first sign of this was in 2014 during the iPhone 6 Plus launch. The iPhone 6 Plus was the first Apple phone to be labeled as a “big phone” Tech analyst and former Apple marketing director Michael Gartenberg said, “Steve Jobs was pretty adamant that big phones aren’t something we’re going to do.” Amid ongoing discussions, Tim said, “Consumers want it, we’ve got the capability to do it, so we’re going to do it.” Cook knew that the times were changing and there were things that needed to be done like the increase in the size of iPhones. Cook has also introduced the world to Apple’s version of modernized everyday products such as the Apple Watch and Airpods. The Apple Watch, released in April 2015 is like the iPhone in the way that it contains applications that can make and receive calls, do mathematical calculations, and track your health by looking at your heart rate and calories. Airpods, released in December 2016, are wireless earbuds that connect to your Apple device through Bluetooth, a wireless connection existing in all Apple products. Today there are seven iterations of the Apple Watch and two versions of the Airpods, stepping it up from the old-fashioned watches and wired headphones.

The Largest Company in the World

If we went back 10 years ago to when Steve Jobs had died and Tim Cook became CEO, no one thought Cook could do what he did. But he proved them all wrong. 10 years later, Apple is the most valuable company in the world. When Tim Cook took the job as CEO of Apple, there were 135 million active device users. Today that amount has grown more than 640% from 135 million to around 1 billion. In the 10 years Tim Cook has been CEO of Apple, both Apple’s yearly revenue and market capitalization have grown by a stupendous amount, with the yearly revenue by 154% and the market capitalization by 601%. On August 19, 2020, Apple's share price hit $467.77, making Apple the first company in the world to have a market capitalization of $2 trillion. As of today, September 22, 2021, Apple’s market cap is $2.371 trillion with a stock price of $143.43 (adjusted for the 4 for 1 split which became effective on August 31, 2020).

Tim Cook (left) alongside his good friend and predecessor Steve Jobs (right).

The Future of Apple

Who knows where Apple could be in 10 years. Tim Cook achieved so much during his 10 years as CEO what could another 10 years do to the company? Tim Cook’s plan for Apple is to continue evolving to the changing times and growing the company. Quite recently was the announcement of the iPhone 13, iPhone 13 Pro, and iPhone 13 Pro Max which are set to release this coming Friday, September 24. As the years go by, Apple will most likely continue to produce new lines of products and newer models of older ones such as the iPad and the iPhone. As Apple becomes larger and larger the company strives to become more independent to reduce the number of risks. One of the things Cook is doing to achieve this goal is continued efforts for Apple to build its own chips for its devices. In terms of future developments and releases, news sources have caught wind of the long-rumored development of the Apple car and AR (Augmented Reality) glasses. A car infused with the most advanced technology in the tech industry and glasses that create an enhanced version of the real physical world, allowing you to view the world around you from a different angle, where what you see is at your fingertips. Tim Cook is leading not just Apple, but the world into a new generation of technology, just like how his predecessor Steve Jobs did with the iPhone. He is the reason why in the past 10 years Apple has grown so much. Tim Cook battled through adversity, defied all odds, and created change, revolutionizing the technology industry forever. Now, when I ask you, “Who do you think of when I mention Apple?” I hope the name Tim Cook is one you will remember.

“A great product isn’t just a collection of features. It’s how it all works together.”

- Tim Cook

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