By Peter Henderson and Poornima Gupta
SAN FRANCISCO, Sept 22 Tim Cook is no Steve Jobs
when it comes to leading Apple Inc (AAPL.O). As the debut of the
new iPhone 5 just proved, that may not be a bad thing.
The taller, thinner and lighter phone prompted a rush on
Wall Street to raise price targets for Apple stock, but the
optimism was not because of a big technological advance or
design breakthrough; the "wow" factor that was the trademark of
the late Apple co-founder Jobs was decidedly absent.
Rather, it was the speed of the global launch that
astounded, validating the new CEO's much-touted wizardry at the
essential but unglamorous task of managing a supply chain.
"We are positively surprised regarding the pace of the
rollout, since we had expected a bigger impact from component
constraints," Barclays analyst Ben Reitzes said.
By next Friday, the iPhone 5 will be in 31 countries, and
will be in 100 by the end of the calendar year. That would be 30
more than the rollout of the predecessor phone, the 4S, over a
similar period, Jeffries analyst Peter Misek calculated.
That means Apple has worked out supply constraints and inked
deals now with 240 carriers. It will get enough phones out the
door in the next 10 days to have a material effect on earnings.
"His skills fit the time period and the flow of product,"
said Raymond Miles, professor emeritus at Haas School of
Business, University of California, Berkeley, adding that Apple
may be at a stage where it needs "someone with a production
The iPhone launch offers some other, subtler indications of
how Apple is changing under Cook. In public events, Jobs stood
out in his black turtleneck, an d performed carefully crafted
one-man stage shows. At the press event for the iPhone 5, Cook
blended into a pack of executives all sporting a uniform of
jeans and untucked casual dress shirt.
Indeed, one might say that practical, low-flash, but
high-impact actions are emerging as the Cook trademark. He has
introduced a dividend to pay out part of the more than $100
billion cash stockpile, raised salaries for a rabidly loyal but
low-paid workforce in the Apple stories, and sped up product
Under Cook, more Wall Street analysts have been invited to
headquarters to talk to executives, particularly Chief Financial
Officer Peter Oppenheimer and head of Internet services Eddy
Cue. Cook himself addressed investors at a Goldman Sachs
conference, a rarity for Apple executives, and initiated
investigations into allegations of labor abuse in its supply
APPLE MAPS PROBLEMS
Insiders say he is a refreshing presence after the prickly
Jobs, who was admired but feared. Cook is also known for his
ability to track vast amount of data and zero in on a critical
One person familiar with the CEO notes that under Cook, the
company has continued to rapidly increase its revenue, retain
all the senior executives, maintain its product rollout schedule
and avoid huge blunders.
On the flip side, the imbroglio over the sub-par mapping
software in the iPhone 5 suggests that Jobs' obsessive
perfectionism and attention to user experience is already being
Apple Maps, which offers soaring 'flyover' views of major
cities, has displaced Google Maps on the new iPhone software.
But the new program has no public transit directions, limited
traffic information, and flat-out mistakes, such as putting one
city in the middle of the ocean.
"Apple made this maps change despite its shortcomings
because they put their own priorities for corporate strategy
ahead of user experience," said Anil Dash, a widely followed
technology pundit, reflecting widespread annoyance and
Jobs would have put the whole company to work on the
problem, as each negative review of the widely used feature
would have irked him, said the person familiar with Apple's
inner workings. The issue facing Cook now is how fast he reacts
to the Maps problem and how quickly it gets fixed, the person
Jobs himself allowed email synchronization software MobileMe
to launch in 2008, to deadly reviews. Fortune magazine reported
Jobs telling the entire development group, "You should hate each
other for having let each other down" and immediately replaced
the group's head.
"No CEO, not even Steve Jobs, would be able to catch all the
problems in every new feature of a new complicated product, like
the iPhone 5," said Harvard Business School professor David
Yoffie. "The big question is how will Tim respond now?"
More broadly, there is also the question of whether Apple
under Cook can produce products that are revolutionary rather
than evolutionary. His products thus far - the iPhone, the new
iPod line and an expected iPad mini - represent improvements,
rather than game changers.
In the meantime, Cook is topping Jobs' sales record: IPhone
5 preorders hit 2 million in 24 hours, twice the level of the
4S, and analysts expect a smaller iPad mini in October.
Investors do not seem to need much more convincing about
Cook's ability to captain the ship: the average price target for
Apple stock is now $763, up 6 percent from a month ago, thanks
to analysts raising targets in the wake of the "wow-less" launch
(Editing by Jonathan Weber and Mary Milliken)
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Keywords: APPLE CEO/
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