Apple makes history as the first American company to reach a $ 2 trillion market cap.
BERKELEY, Calif. (AP) – Apple co-founder Steve Jobs, who died in 2011, was a tough action to follow. But Tim Cook seems to be doing so well that his eventual successor may also have big shoes to fill.
Initially seen as a bright caretaker for the iconic franchise that Jobs built before his death in 2011, Cook has forged his own distinctive legacy. He will mark his ninth anniversary as Apple’s CEO on Monday – the same day that the company split its stock for the second time during his tenure.
Grooming Cook as heir was “one of Steve Jobs’ biggest achievements that is highly underappreciated,” said longtime Apple analyst Gene Munster, who is now a partner of Loup Ventures.
The upcoming stock-for-one stock split, a move that has no impact on stock prices but is often encouraging for investors, is one measure of Apple’s success under Cook. The company was worth just under $ 400 billion when Cook was at the helm; it’s worth five times as much today as that, and has just become the first US company to have a market value of $ 2 trillion. The stock performance has easily obscured the S&P 500 benchmark, which has roughly depreciated in value over the past nine years.
| Ticker | Security | Last | Change | Change% |
|---|---|---|---|---|
| AAPL | APPLE INC. | 497.48 | +24.38 | + 5.15% |
But it has not always been easy. Among the challenges Cook has faced: a drop in iPhone sales when smartphones ripen, a showdown with the FBI over user privacy, a US trade war with China threatening to force iPhone prices and now a pandemic that has shut down many of Apple’s retail stores and plunged the economy into a deep recession.
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Cook, 59, has also been dropped off in new territory. Apple is now paying a quarterly dividend, a move that Jobs has shifted in part because it associated shareholder payments with smart companies that were over. Cook also used his powerful perch to become an outspoken advocate for civil rights and sustainable energy, and emerged on a personal level as the first openly gay CEO of a Fortune 500 company in 2014.
Tim Cook, chief executive officer of Apple Inc., speaks at a keynote at the 2019 DreamForce conference in San Francisco, November 19, 2019. (Photographer: David Paul Morris / Bloomberg via Getty Images)
Apple refused to make Cook available for an interview. But it did point to 2009 remarks Cook made to financial analysts when he ran the business while Jobs was battling pancreatic cancer.
Asked how the company could look under its management, Cook said Apple “should own and master the primary technologies behind the products we make.” It has doubled that commitment, and is becoming a major chip maker to supply both iPhones and Macs. He added that Apple would resist exploring most projects “so we can really focus on the few that are really important and meaningful to us.”
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That laser focus has served Apple well. At the same time, however, Apple, under Cook’s stewardship, has largely failed to come up with breakthrough successors to the iPhone. The smartwatch and wireless earbuds have emerged as market leaders, but not game changers.
Cook and other executives have taken hints that Apple wants to make a big splash in the field of augmented reality, using phone screens as high-tech glasses to paint digital images in the real world. Apple has yet to deliver, though neither do other companies that hyped the technology.
Apple also remains a laggard in artificial intelligence, particularly in the increasingly important market for voice-activated digital assistants. Although Apple’s Siri is widely used on Apple devices, Amazon’s Alexa and Google’s digital assistant have created great introductions to help people manage their lives, especially in homes and offices.
Apple has also crashed a few times under Cook’s leadership.
In 2017, it alienated customers by deliberately but quietly slowing down the performance of older iPhones through a software update, apparently to save the life of depleted batteries. However, many consumers saw it as a ploy to increase sales of newer and more expensive iPhones. Amid the furor, Apple offered to replace rechargeable batteries at a steep discount; later paid it $ 500 million to settle a class-action lawsuit.
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Apple is also facing investigations from governments into its aggressive efforts to minimize its corporate taxes and complaints that it has abused control of its app store to levy disproportionate fees and distort competition to its own digital services. On the tax front, a court ruled in July that Apple did nothing wrong.
Cook has turned the app store into the cornerstone of a services division he decided four years ago to expand. At the time, it was growing clear that sales of the iPhone – Apple’s biggest money maker – were destined to slow down as innovations grew sparsely and consumers kept their old devices longer.
To offset that trend, Cook began relying on recurring revenue from app commissions, warranty programs and streaming subscriptions to music, video, games and news sold for the more than 1.5 billion devices already running on the company’s software.
Apple’s services department now generates $ 50 billion in annual revenue, more than all but 65 companies in the Fortune 500. Ives estimates that Apple’s services department alone is worth about $ 750 billion – about the same as Facebook at present. his heel is.
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That division could be even more valuable now that Cook had done something that many analysts believe Apple should have done at least five years ago by dumping in a huge amount of cash that at one point exceeded $ 260 billion to buy Netflix as a major movie studio to his video to fuel streaming ambitions.
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Buying Netflix seemed like five years ago in terms of opportunity when the video streaming service was valued at about $ 40 billion. Now that Netflix is worth more than $ 200 billion today, that idea seems off the table, even for a company with large Apple resources.
