There were concerns when Tim Cook took over the helm of electronics company Apple from the critically ill founder Steve Jobs on August 24, 2011. But ten years later, he can present impressive letters of nobility. Did you know that 1 in 7 people on the planet now has an iPhone? And that Cook made Apple the most profitable company in the world? An overview.
“Possibly the most successful succession in the tech world,” British business magazine The Economist unequivocally describes Cook’s career. Moreover, purely financially, he did even better than his predecessor.
When he succeeded Steve Jobs, Apple had a market value of $349 billion. Today the company is worth 2.5 trillion or $2,500 billion, more than any other publicly-traded company ever. Annual sales rose from $108 billion in 2011 to $274 billion last year, and net profits more than doubled. It now stands at $57 billion, making Apple the most profitable company in the world.
The magic recipe? Well, that consisted of several ingredients. For example, Cook realized that the smartphone drove the digitization of life. He, therefore, continuously pushed to improve the iPhone. Today, the device is a true supercomputer, of which more than a billion are used around the world. There is one for every seven people on Earth.
Cook also saw the potential of China for the production of its devices and as a market. And he understood the importance of the App Store in making his business even bigger. Its developers attracted users and vice versa, making it now the leading digital marketplace by revenue. There are now almost two million apps on it.
The environment is not forgotten either: by 2030, the company wants to be CO2 neutral. This will require relatively little effort and is very good for many users today.
The question is whether he will be able to maintain his success in the coming decade. In any case, it seems to be getting a lot harder, as many of the global trends that propelled Apple to mythical heights have since been reversed, according to The Economist.
The first challenge is figuring out how the company can grow quickly. Because the bigger you get, the harder it is. The iPhone is relatively stable for the time being, with sales of 200 million units last year. But that is already slightly lower than the 231 million of 2015.
The Apple Store and Apple Music brought in $65 billion in the last four quarters, a lot more than in 2011 (8 billion). At some point, however, Apple will have to have another major innovation of the caliber of the iPhone. And it doesn’t look like the iGlasses or iCar will be.
One of the trump cards of recent years could also turn into a nuisance: China. This is where most Apple products are produced, and many are sold. Cook made a lot of concessions to the Chinese government to keep it that way – for example, he moved Chinese users’ data centers to China so the government could control them – but tensions between China and the West are mounting. China is also increasingly targeting the major tech companies in the country. And Apple could be next.
Competition is also lurking. Until now, companies such as Apple, Amazon, Facebook, and Microsoft have not been much in the way. What’s more, they seemed to join forces and avoid competition with each other in their respective fields. That could well change.
In their quest for growth, companies could cross each other’s territory. And regulators could also make the market more competitive. An example of this is the Digital Markets Act, which is currently pending in the European Union. As a result, Apple would no longer be able to curb competition in the App Store. And the commission the company charges — up to 30 per cent of an app’s purchase price — should come down.