Financial PR (Aug2014 Intake): Assignment 2

Word Count: 1341

Apple All Out of Steve Jobs’ Juju

Tucked away in the southern portion of the San Francisco Bay Area of Northern California is Apple Inc.’s base of operations. An 850,000 square feet modernity, the company headquarters boast a throng executive wing radiating nervous energy, with handlers scurrying to anticipate the whims of the late Apple’s temperamental co-founder. It is here where devout employees are seen toiling away amid their nine-to-five in standard-issue dreary cubicles where projects commence, tight deadlines are met and solitary confinement is a self-imposed employee regular. Such was the modus operandi at Apple’s command post where the working stiff laboriously attempted to keep up with Steve Jobs' high standards of zero tolerance for mediocrity, or to put it bluntly, anything shorter than an A-game.

Known by all, feared by many; Jobs was a force to be reckoned with even among other tech counterparts all through Silicon Valley. Inasmuch as the egalitarian workplace of shared responsibility and equal contribution holds sway with a majority of tech enterprises – such as Hewlett-Packard’s informal employee-employer communication, Intel’s scorn for hierarchal privileges and Google’s unprecedented employee autonomy – Jobs, by contrast, was a notorious micromanager who kept the hierarchal faith and persistently demanded for excellence (Kahney, 2008).

Anyone and everyone from within the company would bear testimony to that, recounting numerous occasions when products, prior to its release had to earn the overbearing Steve Jobs stamp of approval albeit its miniscule detail, like the number of screws on a Mac’s bottom case and the curve of a monitor’s computer (Lappin, 2012). Naturally, most corporations have done away with the archaic prototype of the red-faced, tyrannical boss but at Apple however, Jobs was infamously known as the inveterate stick man; arrogant, dictatorial, mean-spirited and with all aspects considered, always donned in mid-blue Levis and a black turtleneck.

Even so, amidst “the mercurialness; the tantrums; the hours-long, dictator-like speeches; the famous, desperate, and transparent hogging of credit; and […] the charismatic-leader complex,” as Moisescot (2012) relates, pundits and tech journalists are hailing him as “a genius” and “the greatest CEO of his generation,” with heavy implications that Apple’s success is by and large, a derivative of Jobs' brilliance, passion and aggressiveness (Tate, 2011). And who could deny? Reporters call it “the greatest corporate comeback story of all time” and with good reason, when Jobs fortuitously reached a key milestone in restoring the company back from near bankruptcy before rebuilding it into the largest tech company in the world (Shontell, 2011 and Ong, 2011).

With Jobs at the helm, Apple had much to gloat about, especially with a string of innovative product hits and a host of other recommendable triumphs, including the company’s financial performance that details a substantial $65.2 billion in net sales, an increase of $22.3 billion (52%) as well as $14.0 billion in net profit for the fiscal year of 2010, ended September 25, 2010. A comprehensive analysis of its financial report reveals the company’s earnings for the four quarters for the year 2010: $3.38 billion, $3.07 billion, $3.25 billion and $4.31 billion, all of which have routinely exceeded Apple’s expectations quarter-after-quarter, hitting beyond its earning estimates.

It comes as no surprise then that the magnitude of Jobs’ hand at Apple’s salvation had indelibly burned a connection into the minds of many that Apple + Jobs = Good while Apple – Jobs = Bad (Rigby, 2014). A facet that would have in due time worked against Jobs’ successor, Tim Cook, who has finally emerged from the shadow of Apple’s legendary founder and earned his own stripes, after Jobs’ long battle of pancreatic cancer in 2011.

But to find oneself in the limelight would also mean to be subjected to incessant scrutiny and for the case of the newly instated Alabaman CEO, critics have certainly pulled out all the stops to hash over Cook’s management of the company, claiming that “he isn’t running the company like Steve Jobs would have run it” and that his lack of imagination or rather “bold ability to conjure up mind-blowing products” might threaten the company’s meteoric growth rate (Reed, 2014 and Kelly, 2012). The public’s concerns were aplenty, the pressure was downright intense and for many, the narrative was clear: Cook will burn his way through Jobs’ legacy and Apple was well on its way to becoming the next Nokia or Sony (Rigby, 2014).

Even so, such presumptions have inherently shown signs of discrepancies when the numbers seem to run otherwise. Apple’s annual report for the fiscal year of 2011, ended September 24, 2011 uncovers another compelling success on its own with net sales of $108.2 billion, an increase of $43.0 billion (66%) and a $25.9 billion in net profit in comparison to its former year, with its quarterly earnings of $6.00 billion, $5.99 billion, $7.31 billion and $6.62 billion, respectively. But the accomplishments do not simply end there. The years ensuing had seen Apple making headway as it acquired a market capitalization of $620 billion, the highest nominal market capitalization ever reached by a publicly traded company, surpassing the record set by Microsoft in 1999 (Satell, 2012).

Many have in turn shifted ground on the former skepticism for the new CEO and ascribed the recent success to Cook’s efforts such as that of Goldman Sachs research analyst Bill Shope who professes the unlikely remarkable condition of the company and his assertion that “by any quantitative measure, so far [Cook’s] performance is phenomenal” (Lashinsky, 2012). But there are others who remain adamant, hinting over the idea that the only rationale behind Apple’s 2011 success was that Cook was still reaping the profits that Jobs have sown, prior to his demise. Once Steve Jobs' lingering juju runs out however, the future of the company is highly questionable.

What seems to be clear for now is that Cook is certainly behaving like his own man, putting his trademark on Apple, including several measures that paint a distinct deviation from the Steve Jobs company playbook. Lashinsky (2012) expounds Apple’s newest approach in “[being] slightly more open and considerably more corporate,” a stark contrast from Jobs who intended to grow the company solely from within. Collaboration and procurement swiftly became Cook’s maxim and in no time, the company had acquired Beats Electronics, followed by plans of a partnership with IBM and a team up with other big retailers such as Whole Foods Market and Walgreens and credit-card firms, MasterCard and Visa for its new payment system (The Economist, 2014).

My two cents worth on this case in point however, is that there certainly is more to the story than a mere collaborative effort. From an analyst’s point of view, such strides could all just have been a deliberate strategy in sustaining Apple’s growth and favor among its clientele, especially when Cook lacked the one outstanding quality that Jobs possessed: the innovation mindset.

In truth, this particular openness and manner of bringing external corporations into the Apple fold, to expand the company’s expertise may show favorable prospects in the near future. But that alone is not enough for the continual growth of the company, especially when advances of corporate partnerships and acquisitions might not be the quick fix to other pressing issues such as the stiffening competition from rivals Microsoft, Google, Samsung, Amazon and Facebook; or the recurring episodes of the company’s reported flat profit of $13.1 billion for three consecutive first quarters, in the years 2012, 2013 and 2014, that undeniably had a hand in the decline of the company’s share price (BBC, 2014).

Be that as it may, Apple still is a notable corporation for what it is worth, with no shortage of valuable assets. For any leading company however, achieving a meager percentage of profit growth would require more than just mediocre products that stem from existing ideas, it demands for breakthroughs and right about now, the pipeline is looking pretty dry. One should not forget that Apple is no longer personified as the underdog that Jobs took the long journey back with to monetary restoration. The Cupertino Company happens to be the most valuable in the world by stock-market valuation and if anything, Cook has got to start channeling his inner innovative mojo, maintain the corporate status and ultimately honor one of Jobs’ dying requests: “Do what’s best for Apple” (Lashinsky, 2012).

Reference List:

1.     Apple Inc., 2010. Annual report 2010. [Online] Available at: <http://investor.apple.com/secfiling.cfm?filingid=1193125-10-238044&cik=320193> [Accessed 9 October 2014].

2.     Apple Inc., 2011. Annual report 2011. [Online] Available at: <http://files.shareholder.com/downloads/AAPL/3519626739x0x688718/D5835A0B-E2FB-427E-93A5-0A863B4EFA0B/AAPL_10K_FY11_10.26.11.pdf> [Accessed 9 October 2014].

3.     BBC. (Monday 27^th January 2014). Apple shares plunge after reporting flat earnings. BBC, [online]. Available at: <http://www.bbc.com/news/business-25922503> [Accessed 10 October 2014]. 

4.     Kahney, L., 2008. How Apple Got Everything Right By Doing Everything Wrong, Wired, [online] Available at: <http://archive.wired.com/techbiz/it/magazine/16-04/bz_apple?currentPage=all> [Accessed 7 October 2014].

5.     Kelly, H. (Thursday 4^th October 2012). How Apple has changed under Tim Cook. CNN, [online]. Available at: <http://edition.cnn.com/2012/10/04/tech/innovation/apple-tim-cook/index.html> [Accessed 9 October 2014].

6.     Lappin, J., 2012. Steve Jobs Thought Bigger, Tim Cook Thinks Smaller, Forbes, [online] Available at: <http://www.forbes.com/sites/joanlappin/2012/11/28/steve-jobs-thought-bigger-tim-cook-thinks-smaller/> [Accessed 7 October 2014].

7.     Lashinsky, A., 2012. How Tim Cook is changing Apple, Fortune, [online] Available at: <http://fortune.com/2012/05/24/how-tim-cook-is-changing-apple/> [Accessed 8 October 2014]. 

8.     Moisescot, R., 2012. Steve at Work. [online] Available at: <http://allaboutstevejobs.com/persona/steveatwork.php> [Accessed 7 October 2014].

9.     Ong, J., 2011. Apple market capitalization tops $300 billion. [online] Available at: <http://appleinsider.com/articles/11/01/03/apple_market_capitalization_tops_300_billion> [Accessed 8 October 2014].

10.  Reed, B., (2014). The single most important thing Steve Jobs told Tim Cook before he passed away. [Online] 7^th July 2014. Available from: bgr.com

http://bgr.com/2014/07/07/tim-cook-vs-steve-jobs-2/. [Accessed 9 October 2014].

11.  Rigby, R., 2014. Apple’s Tim Cook: Martyr or Visionary? [online] Available at: <http://www.managementtoday.co.uk/news/1313403/> [Accessed 9 October 2014].

12.  Satell, G., 2013. Why Apple’s Future Is Uncertain, Forbes, [online] Available at: <http://www.forbes.com/sites/gregsatell/2013/04/24/why-apples-future-is-uncertain/> [Accessed 9 October 2014].

13.  Shontell, A., 2011. The Amazing Story of How Steve Jobs Took Apple From Near Bankruptcy To Billions in 13 Years. [online] Available at: <http://www.businessinsider.com/how-steve-jobs-took-apple-from-near-bankruptcy-to-billions-in-13-years-2011-1?IR=T&op=1> [Accessed 8 October 2014].

14.  Tate, R., (2011). What Everyone Is Too Polite to Say About Steve Jobs. [Online] 7^th October 2011. Available from: gawker.com

http://gawker.com/5847344/what-everyone-is-too-polite-to-say-about-steve-jobs. [Accessed 8 October 2014].

15.  The Economist. (Saturday 13^th September 2014). Reluctant reformation. The Economist, [online]. Available at: <http://www.economist.com/news/business/21616967-apple-becoming-very-different-company-and-not-just-because-its-newly-unveiled> [Accessed 10 October 2014].