Replacing Steve Jobs: How Apple CEO Tim Cook Has Fared Five Years Later -- Ahead of the Tape
August 21 2016 - 3:12PM
Dow Jones News
By Steven Russolillo
One of the most important succession plans in corporate history
will hit a milestone this week.
Five years ago, Apple Inc.'s iconic and visionary co-founder
Steve Jobs passed the torch to his handpicked successor, Tim Cook.
The official transition took place six weeks before Mr. Jobs passed
away.
Now Apple is the world's largest company by market value and
remains one of the most influential. Its $53 billion in net income
last year was greater than the combined earnings of technology
behemoths Facebook Inc., Google's parent Alphabet Inc., Amazon.com
Inc. and Microsoft Corp. Apple recently sold its billionth
iPhone.
At the same time, though, Apple's growth is slowing, its stock
is stagnating and it is facing more concerns than ever about its
future. Underscoring all of this is one key question that Mr. Cook
will likely never escape: Are Apple's best days behind it?
Apple's product lineup has expanded under Mr. Cook, but each
category faces its own set of concerns. The iPhone, launched under
Mr. Jobs, is even bigger in dollar terms now and contributes
roughly two-thirds of the company's overall revenue.
And yet its outrageous success is coming back to haunt Apple.
With iPhone sales slowing, Apple has reported two consecutive
quarterly drops in revenue, snapping a streak of 13 consecutive
years of growth. The iPad has slumped for the past few years and
the Apple Watch hasn't turned into a blockbuster product.
On Wall Street, Apple has also made the improbable transition
from a growth to a value stock thanks to the billions of dollars in
dividends and share buybacks that it has showered on shareholders
under Mr. Cook's leadership.
Apple's stock has more than doubled over the past five years,
outperforming the S&P 500 but slightly trailing the tech-heavy
Nasdaq Composite.
Its valuation is cheap, but it has been cheap for years. The
worry that Apple doesn't have another truly revolutionary product
up its sleeve is what weighs on the stock.
In his first email to employees as CEO in August 2011, Mr. Cook
said: "I want you to be confident that Apple is not going to
change."
But change is inevitable, even if Apple's shareholders are slow
to accept it.
(END) Dow Jones Newswires
August 21, 2016 14:57 ET (18:57 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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