10 years at Apple in the charts

Apple CEO Tim Cook attends the opening of the new Apple Tower Theater retail store at Apple Tower Theater on June 24, 2021 in Los Angeles, California.

JC Olivera | Getty Images

Ten years ago, Tim Cook was appointed CEO of Apple.

He had a difficult task. His predecessor Steve Jobs founded the company and returned from exile to bring Apple back from the brink of death and launch the products that have defined Apple as a modern computing juggernaut: the iMac, the iPod, the iPhone and the ‘iPad.

But Cook says Jobs told him to be his own boss and never ask “what would Steve do?” He took that advice, building a rigorous operational juggernaut and making Apple the most valuable publicly traded company in the world.

Under Cook, Apple consolidated the iPhone business and bolstered it with a constellation of new products that attract new customers and drive current customers to Apple’s world. Since 2011, the company has launched several new products, including the Apple Watch and AirPods.

Cook’s Apple is significantly bigger than it was when he took office, and he’s also facing new challenges, from navigating politics around the world to the eternal question of what is his next big product.

At the end of the day, Apple’s board is happy with Cook and his performance. In September, Apple’s board of directors granted Cook shares and performance-based awards that could earn it more than one million Apple shares through 2026, its first share award since taking over. function.

This is Cook’s 10-year newsletter.

Returned

Cook had been interim CEO before he officially took office, but the difference between the quarter before Cook took office and today’s sales underscores how much Apple has grown.

In the fiscal third quarter of 2011, Apple reported revenue of $ 28.57 billion. This year, in the same quarter and the most recent quarter for which numbers are available, Apple reported revenue of $ 81.4 billion, almost three times the amount.

Apple’s iPhone alone was worth nearly $ 39.6 billion last quarter, which is more than the company’s total sales when Cook took over.

Price and market capitalization

Investors would be happy if they bought Apple on Cook’s Day 1. A $ 1,000 investment in Apple shares on August 24, 2011 would be worth more than $ 16,866 on Monday, an annual rate of return of over 32% if they reinvested all dividends. The S&P 500 only returned just over 16% per year over the same period.

Apple has made efforts to reduce its number of shares through share buybacks. Apple CFO Luca Maestri said in July that the company has spent more than $ 450 billion on buybacks and dividends since launching its capital return program in 2012.

In 2011, Apple had 929,409,000 shares outstanding. In October, it had 17,001,802,000 shares outstanding, but that was after a 4-1 share split in 2020 and a 7-1 share split in 2014. In October, Apple had the equivalent of 607 207,214 shares outstanding in 2011, a decrease of 35% since Cook took over.

Apple is the most valuable publicly traded company, with a value of more than 2.4 trillion dollars, ahead of other giants such as Microsoft and Amazon.

One thing that is propelling Apple’s market capitalization is the company’s new focus on its service business. The catch-all category includes software subscriptions like iCloud and Apple Music, downloads from the App Store and some of the transactions that users make in the apps they download, AppleCare guarantees, Google money to make its search engine the default search engine on iPhone, and cuts to its Apple Pay payment service. Apple started drawing attention to the previously dormant category in 2015 as iPhone growth slowed.

Apple has started launching new products to bolster its recurring billed services, including Apple News +, a collection of digital magazines, and Apple TV +, a competitor to Netflix. It also bundles its services into a subscription called Apple One. More recently, it started adding privacy features to paid iCloud accounts.

The growth of Apple’s service business from $ 2.95 billion in fiscal 2011 to $ 53.77 billion in fiscal 2020 has given investors confidence that it can find new sources of income even though iPhone sales are slowing.

New products

Steve Jobs, CEO of Apple Inc., unveils the iPhone 4 during his keynote address at the Apple Worldwide Developers Conference (WWDC) in San Francisco, California, United States

David Paul Morris | Bloomberg | Getty Images

Jobs was known as a product-focused CEO who was involved in the development of new devices from their conception until they hit store shelves.

Cook is not as product-oriented as its predecessor, but its Apple has managed to launch several successful new products.

In 2015, Apple released Apple Watch, an iPhone companion that tracked heart rate, displayed notifications, and worked with a variety of compatible watch bands from fashion brands like Hermes.

While Apple has never released unit sales figures or even direct revenue for the watch, an estimate from Counterpoint Research indicates that Apple shipped 33.9 million watches in 2020, far surpassing Huawei, the second largest. company, which only shipped 11 million smartwatches.

Apple also released AirPods in 2016. Likewise, Apple never announced financial results for AirPods, but the company’s wireless headphones made up just under half of wireless headphone sales in 2020, according to Strategy Analytics.

In 2011, Apple’s “other” category, at the time called “peripherals and other hardware”, had sales of $ 2.3 billion. In 2020, after being bolstered by the release of Apple Watch and AirPods, it had over $ 30.6 billion in revenue and the nickname Wearables, Home and Accessories.

Apple’s flagship product remains the iPhone, which accounted for 47% of the company’s sales in the last quarter. But under Cook’s watch, the iPhone has improved on a rigorous annual release schedule. When Cook took over, the most advanced iPhone was the iPhone 4, with a 5-megapixel camera and a 3.5-inch display. Modern iPhone 12 devices can come with up to three cameras, 6.7-inch screens, and an Apple-designed processor that rivals the fastest computer chips.

Prices have also gone up – the iPhone 4 cost $ 599 for an entry-level model ($ 199 with an operator contract). Today, Pro models start at $ 999.

Challenges

Steve Proehl | Corbis Unpublished | Getty Images

A month after Cook took over, Apple had 60,400 full-time employees. Today, it has 147,000 full-time employees in countries around the world, according to a file filed last fall.

Apple’s global operations will create new challenges for the company. Cook personally maintained a relationship with former President Donald Trump as the United States imposed tariffs on parts and products imported by Apple. He also faces pressure from China and other governments regarding the apps he has in his store and how he operates his cloud services.

In the United States, Apple has been lumped together with other dominant tech companies as having too much power. In Apple’s case, regulators and critics have focused on the App Store, the only way for consumers to install software on an iPhone. Critics claim it has arbitrary rules and denounce Apple’s 30% reduction in most purchases, which they say is too much.

Later this year, a judge in Oakland, Calif., Will rule on whether Apple broke rust laws, following a lawsuit from the maker of Fortnite Epic Games. Cook testified in court for the first time as CEO during this trial. Apple also faces legislation currently being debated in Congress that would require the company to change the way it administers its software stores. Apple has denied having a monopoly on its app store.

Apple is also receiving questions about what its next big product might be. It’s investing heavily in finding self-driving electric cars, but the release date is probably years away. It works in the healthcare world to allow users to store medical records and communicate with their doctors, but Apple hasn’t released any healthcare hardware except its Apple Watch. Apple is also working on virtual reality and augmented reality headsets, but these would represent an important new category that has yet to win over consumers.

Whatever the next step for Apple, Cook remains a firm hand at the helm.

About Catherine Sturm

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