A Cook's Tour
I remember the last time Apple transitioned CEOs quite well. The date was August 24, 2011.1 It was a Wednesday. Steve Jobs issued a press release. It was so short and shocking that I simply posted it to TechCrunch in full under the headline: Steve Jobs Resigns As CEO Of Apple.2 Here it is:
To the Apple Board of Directors and the Apple Community:
I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know. Unfortunately, that day has come.
I hereby resign as CEO of Apple. I would like to serve, if the Board sees fit, as Chairman of the Board, director and Apple employee.
As far as my successor goes, I strongly recommend that we execute our succession plan and name Tim Cook as CEO of Apple.
I believe Apple’s brightest and most innovative days are ahead of it. And I look forward to watching and contributing to its success in a new role.
I have made some of the best friends of my life at Apple, and I thank you all for the many years of being able to work alongside you.
Steve
Yes, that's right, Jobs issued the statement ahead of the Board formally voting on Tim Cook to be Jobs' successor (though, as noted, the succession plan was in place and Cook, of course, had to step in before when Jobs was previously ill). Nor had they appointed him as Chairman of the Board yet. He was simply recommending these changes alongside resigning, effective immediately.3
As Cook now makes his transition out of that same CEO role – which yes, that Board did appoint him to later that day in 2011, as well as adding him to said Board while making Jobs Chairman – the contrast could not be any more clear.
First and foremost, Apple issued a release (and 8-K filing) on a Monday, a bit after market close.4 And actually, the Board met last Friday, April 17, to formally vote on these changes. Yes, they somehow, for once, executed a major course of action without it leaking. Of course, it was also widely believed that John Ternus was the successor, and Apple played their part in telegraphing that by raising his profile throughout the past few years, but stepped it up with profiles and the like in the past few months.
There was a parallel to the Jobs transition in that Cook is also being elevated to Chairman of the Board with his move out of the CEO role, and Ternus is being appointed to the Board – all effective at the same time: September 1, 2026. Again, this is not the abrupt Jobs exit, it's an actual transition, executed in orderly fashion.
The current Chairman is Arthur Levinson, who has held that title since shortly after Jobs passed away in 2011 (and has himself served on the board since 2000, shortly after Cook joined the company). When Cook is elevated, Levinson will shift to become the lead independent director. In fact, this bit is why I was pretty certain that Cook would be stepping down as CEO soon.
In January, Apple waived the guidelines which have long stated that Board members should step down at age 75. This impacted Ronald Sugar (77) but undoubtedly more importantly, Levinson, who was 75 at the time (and has since turned 76). Apple has had a lot of turnover at the top in recent months – including at the Board level with other retirements – and they clearly wanted to keep some stability, undoubtedly knowing Cook's reign was winding down. It would have been awkward to elect a new Board Chair if Cook would soon be stepping into that role. And it would have been weird to appoint new members if Ternus would soon be elevated. So yeah, I think I successfully read those tea leaves.
Still, Cook misdirected a bit about the shift in recent interviews. But I read that as Cook just being Cook. After years of honing the art of deflecting about Apple's future products, he finally got a chance to use the skill when it came to his own future. As I wrote last November, there were several reasons to think Cook was contemplating retiring this coming year, including undoubtedly wanting to go out on a high note. Sure enough, Apple issued truly blockbuster, record-breaking Q1 results in late January. And the stock is back at the $4T market cap threshold.
As for why exactly now, two more thoughts:
First, we're less than two weeks away from Apple's next earnings results, on April 30. I wouldn't read this as an indication on if they'll be bad or good, but Q2 is simply never as good as Q1, which includes the all-important holiday quarter. So again, Cook gets to announce at the top.
Second, and probably more importantly, Apple celebrated their 50th birthday on April 1. If there was any question how much that mattered to Cook, look no further than every single interview he gave and appearance he made where he was quick to note that while Apple, historically, never looks back, they were making an exception here. He was making an exception here. A well-deserved victory lap for the company and a sort of subtle parting gift from and for Cook himself.
As for September 1, the actual transition date. It's almost exactly one week after Cook's CEO start date 15 years ago. Again, August 24, 2011. More importantly, it's likely a week or two before Apple's next iPhone event. What better way to usher in a new CEO than on the biggest stage imaginable? Will John Ternus lead an in-person event, live from Cupertino, for the first time in years? I wouldn't rule it out!
And it gives Cook one final keynote as well, at this June's WWDC. He will obviously be there in person, so actually might we see one last Cook live keynote? Maybe, but I also wouldn't be surprised if that ship hasn't sailed for Cook. Clearly, he prefers the recorded keynotes, and who can blame him, as he had to fill the shoes of perhaps the greatest ever to grace such a stage...
Speaking of, I already talked about Cook's legacy in that post from back in November. I mean, the numbers are incredible. He nearly quadrupled revenue from an already insanely large base to over $400B. And he more than quadrupled profit over the same span to over $100B in the most recent fiscal year. Apple's market cap was just over $350B when Cook came in to the role. As noted, by that count, he has more than 10x'd Apple's value. Talk about insanely great.
Of course, the reign hasn't been perfect. In particular, there are complaints on the developer side (and the courts!) in recent years. Meanwhile, on the product side, while Cook has unquestionably helped to make the Apple Watch and AirPods two huge hits, his true business legacy within Apple will be the continued growth of the iPhone base and wrapping a Services business around it that will one day surpass the device as Apple's biggest business.
Cook will undoubtedly want to be remembered for all the health initiatives, mainly tied to the Watch, and those are amazing, but history will undoubtedly look back to the numbers and the products. Again, the numbers are great, the products... less so. The two major would-be Next Big Things™, were to be the Apple Car and the Vision Pro. The Car, of course, never left the garage after a decade of work and shifts in strategy. The Vision Pro, meanwhile, could have used more time in the shop. It launched into a market that simply wasn't ready with a price that failed to move any needles. Maybe, like the Watch, Apple is able to whittle it into a good business, but it's going to take years.
And then there's AI. I probably don't need to write any more about that. Apple fumbled the bag badly here, though it's TBD how much that actually will matter in the long run. Apple could end up looking prescient in not spending hundreds of billions of dollars on their own data centers – or they could look foolish. The boring reality will probably be somewhere in the middle. For now, Apple seems to be sitting pretty with a new Google partnership in place and ready to roll-out soon – perhaps announced by Cook at WWDC and actually ushered into reality under Ternus during the iPhone event in the Fall.
Regardless, this will be on Ternus' shoulders now. Well, and Craig Federighi's, the other key Apple executive who is young enough to likely be around for a while, assuming he stays to correct Apple's AI woes.
Definitely staying will be Ternus' hardware counterpart Johny Srouji – aka the father of Apple Silicon. Clearly there was some truth to the notion that he was thinking about leaving Apple – which was reported, but denied – otherwise you wouldn't get a big elevation and press release at the same time the CEO change is announced. Apple needed to keep Srouji happy to keep him around, and they clearly have. And that will be vital for all of Apple's future products as Apple's silicon expertise – beyond just their CPUs – is arguably their greatest strength right now. And what if – just what if – they eventually parlay that into some kind of true AI business as well?
Back to Cook. Another key difference from the last Apple CEO change is that 'Executive Chair' role Cook will fill. But actually he won't fill it, he'll make it, because it's a different title than either Levinson or even Jobs commanded as Chair. It's important because it means that Cook very much intends to remain working at the company, just in a different capacity. It's right there in the second paragraph of the press release:
Cook will continue in his role as CEO through the summer as he works closely with Ternus on a smooth transition. As executive chairman, Cook will assist with certain aspects of the company, including engaging with policymakers around the world.
I mean, Apple didn't write, "including engaging with Donald Trump", but they may as well have. This was always clearly going to be a part of Cook's future with Apple. For better or worse, Cook has been able to engage President Trump in a way that few other business leaders have. This has helped Apple immensely at times. And hurt them at others. Live by "Tim Apple", die by "Tim Apple" as it were.
It's hard to imagine John Ternus filling this role, because it's hard to imagine anyone filling this role. Because it's hard to imagine Cook wanting to burden anyone else at Apple with such a role. Again, I believe he's taken up this cause as his own burden to bear for the sake of the company. Yes, it simply must be soul-sucking at times – when you have to present a gold trinket for all to see in the Oval Office, or when you have to go to a movie screening at the White House just as citizens are being murdered on the streets – and Cook will have to live with that legacy, which undoubtedly will further tarnish when Trump is out of office.
But Cook also sort of did some soul selling much earlier in his career when he basically bet all of Apple on China – not the market for sales (though that's obviously vital for Apple now as well), but for manufacturing. It was insanely prescient when Cook was still COO in charge of such things, but it became more problematic over time as China itself changed and America's stance towards it as well. Still, Cook has managed to balance that situation to date – certainly better than, say NVIDIA has! – and presumably he'll continue to in his new role as Apple's Diplomat.
And just because I'm laying into him here, I will note that Cook deserves a lot of credit for standing up to the FBI when it came to iPhone device privacy. Something which has been playing out more recently in the UK as well. You have to pick your battles, as Cook has.5
And now his watch has ended. Or will, soon enough. I'll close with something I wrote back in August 2011, a few days after Jobs stepped down:
This fall is shaping up to be a great first act for Cook. All set up by the timing of Jobs’ resignation. The only real question is: is it Cook or Jobs that takes the stage at their event next month to announce these things? Will it be a “hello” or a “goodbye”?
Sadly, it was the "hello" for Cook, who oversaw his first keynote as CEO, introducing the iPhone 4S – the first device built around Siri – and Jobs passed away the following day. As I closed that piece:
Steve Jobs is a remarkable person. He’ll go down as perhaps the greatest business leader and one of the greatest innovators of not just our time, but of any time. But he is just a man. What he’s built in Apple is much bigger. We’re emotionally tied to Jobs because of the belief that Apple is tied to him. His last act is to show us that it’s not. That would be truly amazing.
In that way, Tim Cook successfully executed Steve Jobs' strategy, one last time.
M.G. Siegler
M.G. Siegler
M.G. Siegler
M.G. Siegler
M.G. Siegler
1 TechCrunch itself was in a bad state at the time, with founder Michael Arrington about to leave. Per my calendar at the time, I was meeting with VCs – not to fundraise, but to become one, just a few weeks later. ↩
2 For a time, I believe this post had the most traffic across all of TechCrunch. That's how shocking it was and how beloved/revered Jobs was within Silicon Valley and beyond. ↩
3 Jobs' last official Apple event ended up being WWDC 2011, where the focus was on the iCloud, and getting it right this time. Making sure, "it just works." This was also, incidentally, the first and only time I got a chance to meet and sit down with Jobs, just after the keynote. ↩
4 Jobs announcement was also after the markets were closed, but it was such a shock that the stock had to be halted for a brief period in after-hours trading that day. So far, Cook's announcement has Apple's stock little changed... ↩
5 Lastly, on a much more somber note, but it simply must be mentioned because seemingly no one else is calling it out... Around the time of the initial Cook retirement reports, not one but two different stories at two different publications reported that Cook had been seen with a slight tremor in his hands and that some people internally and externally were worried about it. Apple has not officially denied such reports, but seems to be operating on background suggesting that they are not true, or that there's nothing to worry about. So it's hard to know what to make of that. But again, it's worth mentioning given Apple's history with CEO changes and health. Tremor or not, Cook is clearly not in the dire state Jobs was in when he (again, abruptly) stepped down. And again, he's clearly going to be continuing on in this new capacity and so now perhaps it's a moot point. Once he's no longer CEO of one of the biggest companies in the world, his health can be his own private matter again (there are no firm rules about public Board members and health disclosures, though if Cook is truly acting as a diplomat of sorts that is material to Apple's business, there may be some gray area there). Anyway, hopefully there's nothing there. But it's weird that no one is even mentioning it – even if to firmly deny it – after the initial reports. ↩