They say Steve Jobs used to fire staff in the elevator. So this was the nightmare scenario for you if you worked at Apple. You step into the lift and just as the doors close, a hand reaches in, the door slides back open and there stands the familiar figure of Steve Jobs. At this point you have limited options. You can pray that Jonathan Ive steps in too, and then you will probably be ignored. You can try to hide in the shadows and hope Jobs doesn’t spot you. Or you can tough it out, look the potential death of your career in the face, and smile. Regardless, what often happened was a series of quick fire questions, about you, your role in Apple and what you thought about this, that and the other. When the lift journey came to an end, you may well have found you were out of a job.
Today, Apple’s CEO is Tim Cook, and the axe has been wielded, although on this occasion no elevator seems to have been involved.
Out goes a Brit. John Browett is a former CEO of Dixons, and a high flyer at Tesco. He was charged with leading Apple’s retail strategy.
Out goes Scott Forstall, the man who headed iOS software.
Browett was the first appointee of Tim Cook. Forstall had been with the company since 1997. He joined Apple along with Steve Jobs himself, and before that was with the special one at NeXT. In other words, Forstall was a Jobs man through and through, working with the Apple founder during his wilderness years post and pre Apple. He was considered by some to be the Apple CEO in waiting.
It is not hard to see why Forstall has gone – actually he is leaving in a few months’ time, if you want to be precise. The Apple maps on the latest iPhones were a disaster (darling).
Up goes Jonathan Ive. He is now responsible for the look and feel of software. He already held a similar role for hardware.
Ive has now taken on the kind of role once held by Jobs himself.
If Apple is all about design, design and design, then Jony, Jony, Jony is the man.
But how long can it last?
Regression to the mean is a term all mathematicians know about. These days economists understand it too. In the long run it is not possible to continuously do better than your rivals, unless you have some innate advantage.
Microsoft was in danger of suffering regression to the mean when DOS was coming to an end. It avoided a downfall by playing to its size, and experimenting; trying lots of different ideas, Windows being one of them. It seems to have forgotten that lesson, although the new Surface product does seem pretty exciting.
Companies such as GlaxoSmithKline may enjoy long term success by building upon their huge distribution network and financial clout, to market products developed by third parties.
In a funny way, even Facebook has an asset that may provide long term value; after all its network of users provides an inherent asset that is not going to disappear in a hurry
Apple just has to go on being brilliant.
And Jonathan Ive may just be brilliant enough to ensure the success continues. And, by the way, the company’s valuation is surprisingly modest compared to profits, bearing in mind its recent growth trajectory.
But nothing lasts forever, sooner or later regression to the mean occurs. Are the recent departures at the top a sign of this, or merely indicative of a company ensuring it stays at the top?
©2012 Investment and Business News.
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© Investment & Business News 2013