Tim Cook, Steve Jobs’ Alter-Ego?


Note: I like to listen and learn from your opinions. If you like to share your view with me, then don’t hesitate to leave a comment on this and all other articles. I welcome any constructive discussions.

One of the most discussed topics last week is Steve Jobs’ resignation as Apple’s CEO. I like to put forward my thoughts on it. Many reports and TV shows covered this story. Almost everybody agreed that Tim Cook is a good alternative to Steve Jobs. When I read a little bit about Tim Cook, I could not come to the same conclusion immediately. If I was asked my response on this would be,  “we don’t have enough information to say either way”. I may sound strange by saying so, but let’s look into why I have to say that way.

First of all let me acknowledge Jobs’ achievements. I am trying to establish Jobs’ personality so that the comparison between Jobs and Cook would be easier. I don’t go into the history a lot but will briefly touch a few important milestones in Jobs’ life. As we all know Steve Jobs is a Co-founder of Apple. Who is the other co-founder(s) then? That’s Steve Wozniak. He is the design and the electronics guy behind early days of Apple. Apple’s first computer in the market was Apple-I. It was designed by Wozniak and was sold by Jobs. Then it was a good success and laid the path to its next generation computer Apple-II. Apple-II was a huge success. It redefined the computer world and over night Apple and Jobs became the hot news in Tech world. Jobs was the face of the company and he was believed to be a whiz-kid by most of the tech people.

After the success of Apple-II, company did not have a success for a long time during which it had to rely on Apple-II’s revenue for survival. Meanwhile, Jobs started working on a project called Lisa. This was supposed to be a high-end computer with much better configuration than the previous models. For some reasons Jobs was forced to leave the Lisa project which is taken over by others in the company. As a replacement Jobs was given another project (which was completely his brainchild) called Macintosh. Despite the hype it created, Mac was NOT an instant success. Eventually it did good. On the other hand, Jobs was forced to leave Apple.

After leaving Apple, Jobs started another company called NeXT which is acquired by Apple after his return to it. NeXT was not a successful venture, if not a failed one. While Jobs was with NeXT, he happened to buy Pixar Studios for $10M (some say it was only for $5 M). Jobs’ main idea behind buying PIxar was to manufacture Computers for Imaging purposes. His idea behind it was always to sell computers that can be used with Medical Systems etc. Jobs never considered Pixar to be an animation studio though he let some of its resources to be spent on animation. It was the case at least until Toy Story got released. Eventually Pixar was proved to be one of the best animation studios and was bought by Disney for $ 7.4 billion. With this deal, Jobs has become a board member and the biggest investor of Disney.

We all know what happened with Apple after Jobs’ return. He turned the company which was on the brink of bankruptcy to one of the most successful companies in American history ( I am sure Microsoft must be regretting its decision to lend a helping hand of $150M to Apple at that time). Today it’s the largest tech company in the world. By looking at Apple’s history everyone agrees that Steve Jobs is one of the best CEO’s that world ever had.

On the other hand, Tim Cook worked at some of the best computer manufactures such as IBM and Compaq. At both Compaq and Apple he was mostly responsible to the supply chain management. He doesn’t have much experience as a CEO except for a couple of months in 2004 in Jobs’ absence and then seven months in this year. That means mostly he is an operations person and yet to be proved as a CEO.

I like to recollect one of the most common questions in management world. What is the difference between a Leader and a Manager? Just think of it for a while before you continue to read on. Leader is a person who is mostly responsible to set the future course of the company. He has to motivate the employees, define the vision of the company and see how and where the company would be in the years to come. He is also responsible to make the company reach its vision in the given period of time. On the other hand, a manager is a person who takes care of the day-to-day operations. He might define the processes that would facilitate the day to day activities. He makes sure products/services/solutions are delivered on time. The same person can be a good leader as well as a manager. But there is no guarantee that a good manager makes a good leader and vice versa. That’s why most of the companies have two different designations CEO (Chief Executive Officer) and COO (Chief Operating Officer). What’s the difference between a CEO and a COO? Yes, COO reports to CEO and CEO directly reports to the Board of Directors. But that’s not what I am trying to highlight here. CEO is mainly responsible to  define the future course of the company whereas COO is responsible to make sure the operations are performed without any hiccups.

So far Tim Cook was more of an operations person than of a leader. No doubt he did an excellent job in removing all the chaos in Apple’s supply chain. He outsourced all the manufacturing to China and saved a lot of money to Apple while improving the quality of its products. His experience as a CEO is not known yet. Jobs as the CEO and Cook as the COO proved to be one of the best teams (just as Oracle’s Larry Ellison and Ray Lane did). Jobs always had a vision to the company. He is believed to be the world’s best consumer. He had an aesthetic touch to all of his thoughts. Aesthetics always played a crucial role in Apple’s products. If you ask any Apple customer why they like Apple products, the most frequently given answer would be “they look cool”. Apart from coolness, Apple products are simple to use. All this came into Apple’s products only because of Jobs. I am not saying Jobs himself designed all these products. But he has the taste of picking up the best of the designs/features to provide. He would never be satisfied with anything inferior. Tim Cook has declared that he would continue to give the same importance to designs and designers. However, what he also needs is the ability to pick the best one out of 10s of options provided to him. This quality cannot be acquired with experience. It has to be possessed by birth.

In the last seven months, since Steve Jobs announced his leave of absence, Tim Cook has been working as Apple’s CEO. However, in these seven months, I didn’t see any major decisions that can change the company’s path. It’s not very often you see the companies changing or redefining their strategies. So I would say we need to wait on this and see how Tim Cook will do when the time comes to define the company’s vision. With Apple’s current product line any operations person can lead the company for the next couple of years. But we need to see how Tim Cook is going to fare at his job when the time comes. It’s a skill to read the pulse of the consumers. Based on their pulse, products have to be made. It’s what Steve Jobs excelled. Even he was not correct all the time. He had some misfires too. For example, his purpose behind buying Pixar was to sell Image Computers. But how many of us know about Pixar Image Computers? His bet did not work in this scenario. However, Pixar was successful for other reasons which he too surprised about.

Generally when founders of the companies leave and the second generation leaders come in, it’s not easy to share the same vision and view as the founders did. We have at least a couple of cases in front of us to prove it. Where is Microsoft’s growth since Bill Gates gave up the reigns? What happened to Dell in the absence of Michael Dell? What went wrong with Apple between Steve Jobs’ exit and reentry into Apple? On the other hand there are successful stories too when the next generation leadership replaced the founders. Companies like HP and IBM did well even when the next generation took over.

It’s possible that Apple can stand in the same league as HP and IBM does. However, Steve Jobs cannot be replaced. There is no second Steve Jobs and there is no another Bill Gates. Every person is different with his/her own strengths and weaknesses. As Michael Porter, the famous Strategist once said, the leader’s personal values have to be taken into consideration while defining the future course of a company (in defining the feasible strategy of the company). All we need to do now is, just wait and see how Tim Cook’s strengths and weaknesses can off-set Steve Jobs absence.

PS: I hope iPhone 5 release is NOT delayed by Steve Jobs’ absence. Generally new models of iPhone release in June. This time it is NOT out yet. Hmmm…..it’s already end of August, I suppose. Are we seeing Jobs’ effect already 😉 ?

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Change is Imminent


As an avid reader of Technology news, I felt a major shift in PC market. Most of the analysts are already talking about the shift from PCs to Tablets, Smart Phones and other kinds of hand held devices. Here are my opinions about these changes. I am NOT an expert in anything that I discuss in this post. I am just an observer with some interest in both business and technology.

I feel that we are witnessing the raise of a few new leaders and the fall of a few giants. Could Apple, Samsung or Motorola can be replacements of HP
and Dell? Can Qualcomm and TI overshadow Intel and AMD? Is it possible to see Microsoft making way to Google as the largest Operating System vendor? I feel the answer is “Yes” to most of these questions. If you are interested to see my views on these, keep reading…

PC market is contracting fast. New hand held devices market is all set to fly high. We are witnessing one of the great technological changes in the history. Most of us might have seen the evolution of computers at the end of 20th century. Now it’s the turn of hand held devices. Demand for PCs is reducing at an alarming pace. PC makers are busy with redefining their strategies. We may witness disappearance of some of the today’s technology giants. At least some of them will lose their relevance eventually.

With the introduction of iPhone, Apple has created a new wave of technological change. iPhone introduction erased the boundaries between powerful PCs and
not-so-powerful hand held devices. As most of the PC users use them for accessing Internet, Apple wanted to lock them in a whole new market. Apple, in fact, created this new market. iPhone let the users access Internet at their finger taps. Users don’t have to be at home or to carry a big ~7lb laptop/netbook. Users don’t have to be technically sound. Even a lay man can easily use it. Apple’s focus on user interaction made things much easier to the end user. As the trend setter, Apple has established its brand very well in the hand held device market. Thanks to iPod, that laid the foundation to Apple in consumer market.

Apple is able to manage a much impact by its later releases of iPhone too. However, this new market attracted new players as well as its future has become very
attractive. Google entered the hand held device OS market with its Android Operating System. It’s already out numbered Apple in the number of pieces sold. Its open software strategy worked well to promote Android in less time. As a result, most of the smart phone vendors readily grabbed a well developed, well designed and free-to-use Operating System. Motorola, Samsung, HTC are the first to release smart phones with Android on them. As of now, Google didn’t
declare their strategy on Android, to make money out of it. However, they are keen to compete Apple in smart phone software market. Android is all set to become the Windows of hand held devices.

Tablets are the devices which might make PCs look awkward. People are preferring to use a light weighted , easy to use and easy to carry tablets to PCs. PCs gave way to laptop which in turn made the way to netbooks. However, Netbooks didn’t enjoy the supremacy for a long time. They had to give up the market to tablets. Again Apple is the one to ignite the craze. Though iPod and iPad are not the first devices of their kind, they made their categories popular. There were iPod-like devices and iPad-like devices before they entered the market. However, Apple was the one to nurture the consumer interest in those markets.

After observing the developments in PC market, I strongly feel some companies are going to get affected negatively and some positively. Here are a few players to start with.

HP

Being the world’s largest PC maker, Hewlett-Packard is going to get hurt with the diminishing PC market. They acquired Palm some time back to have a jump start in hand held devices market. Though HP had their presence in smart phone market in the form of iPAQ, I don’t think they commanded any significant share in that market. With the acquisition of Palm, HP got their hands on Palm’s positively-reviewed OS, WebOS. This new move changed its plans for its table PC, the release which was deferred as a result. Back when HP Slate was introduced in CES 2010 (Consumer Electronics Show), it was running Windows OS on it. Rumors are, HP might release it with WebOS on it.

Pros:

 

  • As HP has expertise in PC manufacturing and marketing, it won’t be hard to them to turn a corner. They can easily jump into the tablet PC market.

  • They can leverage Palm’s expertise to fare well in smart phone market too.  WebOS has already received kudos from critics.

Cons:

  • Obviously HP is not the forerunner in this market. It has to compete in this market as a follower, at least initially.

  • Palm’s WebOS doesn’t enjoy the existence of plethora of Apps that iPhone’s OS and Google’s Android do. In fact, lack of Apps could even rule out WebOS or any other smart phone OS of the market.

Microsoft

Yesterday’s software leader, Microsoft could be another loser. As per one of the reports, Microsoft’s Windows phone OS could fall below 4% of the market share
by 2014. Already phone makers like Samsung and HTC joined the Android bandwagon by ditching Microsoft. Microsoft itself released a couple of mobiles with their Windows OS on them. However, many people are unaware of their existence too. Kin one and Kin two, the two Social Networking based mobiles, hardly made their mark which were eventually abandoned with in a couple of months of their inception.

Pros:

  • As we all know, Microsoft Windows is the most widely used Operating System and it would be so for some more time. With their expertise in OS, they can come back again with a well revamped Windows Phone OS (Windows Mobile was recently renamed to Windows Phone).

  • Considering their deep pockets, they can go for shopping. Dell could be a choice of interest. Dell can give Microsoft a quick jump into hardware market. (It is still a mystery to me why Microsoft is not in to hardware market yet). Otherwise, not many companies are left in this domain to grab.

Cons:

  • It seems like Microsoft is losing their ground in their PC OS market too. Vista was one of the worst reviewed operating systems that Microsoft has ever produced. It was so bad that most of the Vista users were allowed to upgrade their OS to Windows 7 for $0 (zero dollars).

  • iOS and Android are ahead in the race of hand held device OS market. It might be too late for Microsoft to regain its lost market share.

  • Microsoft has been fighting Open Source community for a while now. Even if it manages to get some share from iOS, Android would be a hard nut to crack. It might not be easy for Microsoft to grab share from Android, given Windows’ not-so-open platform.

  • Unlike Apple, Microsoft doesn’t have any hardware unit to back its operating system. It has to depend on hardware vendors like HP, Dell etc.

Research In Motion

Another sufferer by the change in smart phone market would be Research In Motion. Its smart phone brand, Black Berry is already seeing decreasing growth levels while losing share to its rivals. We still have to wait and see how RIM can perform in days to come. At least as of now, it doesn’t seem to be in a good shape.

Intel

Another big giant that could get affected by this trend shift is Intel. They have recently lowered their outlook on revenues of next quarter, sighting, the decrease in PC demand as the reason. Lately, they announced their purchase of Infineon’s unit that manufactures processors for smart phones. I see this as a desperate move to get into hand held devices market. Intel processors are impeccable for PCs. However, their hand held device counterparts are always complained as power thirsty. High power consumption is an intolerable aspect to the mobile vendors. Either Intel has to make their processors more power efficient or inves some money to invent better battery technology. The latter would not be a real solution to the problem. However if the research pays off, the invention could patch the problem temporarily. Currently Hand held devices’ processor market is dominated by the companies like Qualcomm, Texas Instruments etc. Intel-bought Infineon unit has a meager 5% market share approximately.

Nokia

Nokia is the largest mobile phone maker in the world. It has been enjoying this place for more than a decade now. Today, it sells one mobile out of every three
mobiles sold world wide. Though Nokia has one third of the mobile phone market share, company’s future doesn’t seem to be bright. During last few years it has been losing market share to other companies. They have to impress the consumers with a real smart phone yet. Their prestigious N-series is far from competing iPhone-like smart phones. As the mobile phone world was changing very rapidly, Nokia doesn’t seem to be responding to any of those changes.  Their yet-to-be-released N8 is coming with a new and revamped version of their Symbian OS (Symbian 3). However, it looks like, Symbian couldn’t be an answer to iOS or Android. Unless Nokia embraces Android OS, it might be hard to them to retain their position. Nokia is also betting on a Linux based OS called MeeGo. MeeGo is also open sourced and it uses the same Linux kernel as Android does. Nokia is developing this in collaboration with Intel. However, it could be too late by the time Nokia releases a mobile with MeeGo.

Dell

Dell could be the biggest sufferer of this shift. Historically Dell did well as a reason of their procurement process efficiency.  They made the purchase, a pleasant experience to the customers. As the practice paid back, Dell has become the largest PC seller in the world before it lost the position to HP. Dell is a living example (living at least as of now) to the fact – Operational Excellence can’t be a strategy. Dell has believed and overly relied on operational excellence which was easily recreated by their competitors, like HP. Now Dell is at number 3 after HP and Acer.

Dell has foreseen the technological shift coming in the PC market. It recently came to the market with their new hand held device – Streak. Dell Streak falls
somewhere between a smart phone and a tablet. However, response from consumers doesn’t seem to be overwhelming if not, disappointing. Unless they come up with a very impressive device with good quality hardware, the state of the art technology and best design, days are numbered to them. An acquisition could give Dell some oxygen. Could that be Microsoft or Google? Could be.

AMD

AMD is another company that would be hit very badly. It is the only major alternative to Intel in PC world. However, this market itself is losing the demand.
Hence chances of growth at AMD are minimal.

While struggling to cope up with the dynamics of the market, the current leaders are making the way to smaller/newer players like Samsung, Qualcomm, TI, ARM Holdings etc. This month, Samsung launched their tablet with Android OS on it. All four major carriers, AT&T, Verizon, Sprint-Nextel and T-Mobile are going to sell this tablet. Samsung might emerge as one of the leaders in this field. Its new Android based smart phone Galaxy S already hit the market and reaping fruits to the company.

Qualcomm and TI are the current leaders in hand held device processor market. They could become the Intel-like companies in this arena.

Bottom line:

Change is imminent. It’s always been in the air. Those who foresee it and respond to it, can reap the benefits. While others who fail to respond will face loses,
may even disappear. Corporations could be big. But they can’t afford being so big that their own progress is impeded by their size. That’s what, I feel, has been happening with Microsoft and other few big companies.

Pisupat Venkata Krishna