With last week’s financial results posted by Apple showing a $1.3 billion decrease in year-over-year profits, is it possible we are about to witness one of the greatest rise and fall from corporate stardom? What’s going on at Apple? What are the employees thinking? Better yet what is Tim Cook thinking?
Sure Apple returned a nearly $19 billion to shareholders via dividends and share repurchases, but their operating numbers raise some eyebrows. While revenue was nearly flat at $35 billion this quarter, over the same period last year, what is more concerning is the drop in profit. This year’s quarterly profit was $6.9 billion compared to a $8.8 billion profit a year ago. And to make matters worse, sales of iPads dropped by more than 2.5 million units along with a 200,000 unit-sale decrease in Macs.
So what’s happening at Apple? Have they lost their swagger. Perhaps. But why? Is the answer fear?
Apple has been one of the most, if not the most coveted brand for the last decade. People rush to buy their products, attend their conferences, and hope to work for a company whose founder is no doubt the greatest visionary of this generation. Apple’s goals and desires rose above Wall Street’s performance expectations. They operated with this notion that they could really change people’s lives…and they did. And, as a result of changing millions of lives they in fact changed the world and how we consume information, use it, access it, and show it off. Apple products carry a certain cachet with them. All these accomplishments are the result of many things but perhaps the single biggest driving force behind their success was Steve Jobs. A bold visionary who bucked the pressures of Wall Street and critics and moved in directions others wouldn’t dare.
Today Tim Cook is at the helm with some big shoes to fill. It’s hard to expect a mere man, while a good man, to become superhuman like Jobs. Cook may be a good operator but he’s no Jobs. He may have walked into the worst CEO seat in the universe. After all, following in the footsteps of someone like Steve Jobs would be difficult even for many of the greatest CEOs of all time.
Signs are already showing that Apple is becoming a “me-too” company. After the strange introduction of the iPad mini, I began to wonder what was next. Perhaps a gaming system like Xbox, or getting into selling flat screen TVs like Samsung? Apple seems to be flailing about trying to find their way. They’ve shifted their strategy in their retail stores from a laid-back, informative, fun experience to the typical “gotta sell them something” model used by all other retailers. Unfortunately this shift has been noticed by consumers and they have voted with their feet as sales slipped to $4 billion, down slightly from a year earlier.
While the fear of failure affects people and companies differently, with Apple it may not have a positive result. Companies throughout history have turned to visionaries when facing troubled times. Chrysler turned to Lee Iacocca, GM turned to Bob Lutz, JP Morgan turned to Jamie Dimon, and Xerox turned to Anne Mulcahy. Leaders that have clarity of vision along with a strong sense of conviction. These leaders took bold actions, dismissed Wall Street, and focused their attention on the priority of turning their respective companies around.
Apple needs to find its hunger for innovation and market disruption once again if it expects to stay on top. The out-of-the-box thinking driven by Jobs, along with his obsession with elegant, yet simple-to-use designs, created a Disney-like company where dreams are made of. Let’s hope the dream is not over.