Tim Cook reported a devastating first quarter 2016 . Iphone sales, profit margins and revenue (9% YoY drop compared to 28% growth one year ago) dropped for the first time in 13 years, pulling shares down more than 10%. This lead star investor iCahn to throw the towel on Apple
Tim Cook responded with conventional out of the box thinking, announcing an increase in share buyback program. This is a measure that any CFO in the world might be doing. A CEO of the worlds once largest company is expected to respond differently. It is getting more and more clear that Apple needs a visionary leader.
What have we seen in the past years ? Tim Cook took over the most innovative company in the world, turning it into a hardware producer, which is loosing out on every single market. The key innovations of the past 3 years were limited to different screen sizes, and an iPhone SE with a 5 year old design. Apple was once famous for it’s design, now Samsung is setting pace with its gorgeous Samsung Edge.
Samsungs design vs. Apple
I am wondering what the Apples designers are feeling about Tim Cooks decision not to move into the future and instead sticking to the old. This is the way to discourage innovation. Let us emagine car manufacturers releasing new models with the old chassis, or fashion designer the same look just with different materials. Just unthinkable.
Innovation management is social, and not hierarchical. Innovation proposals have to be collected in public threads, so they are documented and can’t be cannibalized by your managers above the hierarchy chain. We all know how our own managers sell our success as their success, and how they neglect, discourage or misunderstand our proposals for innovation. Innovation needs a climate to grow, and clearly Tim Cook is not creating this climate.
By the way: Salesforce has the right collaboration tools to collect and encourage innovation processes. Chatter, Chatter Groups, Ideas, and Customer Portals
Tim Cook was given a chance to lay out his vision in Jim Cramers Mad Money on CNBC.
I haven’t seen a less visionary CEO of a world leading company in years. Instead of fueling future markets and innovation, Tim Cooks hope is based on India upgrading from 3G to 4G networks, which may lead to some more iPhone Sales. However, China is in the middle of a 3G to 4G upgrade cycle too, yet Apple’s numbers have dropped in China.
Tim Cooks can obviously not think beyond the iPhone, and he has no glue how to put the 200+ billion USD to work in innvation markets.
Let us have a look at some key service markets of the future:
– Streaming: Streaming doesn’t end with music. Streaming started with music, next was video and next will be public TV streaming. While Apple still linving in the music streaming era, Netflix has built an market share in video streaming. With Youtube planning full tv streaming from 2017 and Amazon announcing its video streaming service as a standalone service, both Netflix and Apple are getting more and more under pressure. Even more, Facebook is positioning Snapchat as another competitor in this field. Apple has take over Netflix and invest further money into TV streaming to compete in this market
– Payment: ApplePay is a Joke. While many US citizens still believe ApplePay is a viable service and can grow in the future, ApplePay is widely rejected outside the US due to a insane fee structure that will work in no market in the world. Im many, even most countries Apple Pay is not even availabe. For example, no Apple pay in the European Union. Apple is trying to cut a good piece out of the payment providers cake, which lies under the ease of paying with your thumb imprint using Apple Touch. The Apple fee structure would lead payment providers to leaving more than 50% of their cake to Apple. Touch Id isn’t value enough to justify that. Apple could take over PayPal to become a payment provider on it’s own, getting worldwide access in an instant. Even more, Apple could fully rely on the PayPal fee structure and provide ApplePay for free on top. This would also mean growing ApplePay into a system available on Android devices with the same ease.
– Car communication and car of the future: First of all, Apple does not have the capacity, the resources, the management capabilities to build a car on it’s own. Apple would be well adviced to restrict itself to car communication and grow a car product suite that extends their eco system. As a second step we have to realize that self driving cars and car electronics will be more important in the car of the future. This requires massive computing resources too, and might be a field of cooperation with Amazon. The best way to play cars for Apple is to take over a good share of Tesla and to deliver Teslas car communication systems of the future.
– The first to publicly propose to replace Tim Cook with Elon Musk was Vivek Wadhwa from Standford University in this great CNBC discussion:
It is time to retire Tim Cook.