6 January 2020

Tech Nations · Apple


Part I
Leadership: Inside the politburo

By Alexi Mostrous

When John MacFarlane, the founder of Sonos, wanted to negotiate a partnership with Apple, he arranged to meet some of Steve Jobs’s key lieutenants. Greg Joswiak, one of those lieutenants and now Apple’s vice president of product marketing, was “rude and arrogant” during the 2004 meeting, MacFarlane recalled. “He was completely dismissive. But the Greg I met a few years later was a completely different guy.”

MacFarlane, who had more than 50 meetings with Apple’s senior leadership as Sonos grew into a billion-dollar smart speaker company, was reflecting on the bombshell set off when Tim Cook succeeded Steve Jobs as chief executive officer of Apple in 2011.

Not only did the men have fundamentally different outlooks, but the executives working under them changed their own personalities to match. “Greg was a different person under Steve than he was under Tim,” he told us. “As a partner, the company was very different to deal with in the Steve Jobs era than the Tim Cook era. It was night and day.”

In the eight years since Jobs stepped down as chief executive, Cook has propelled Apple to trillion-dollar status by launching popular iterations of core products such as the iPhone and investing billions in software and services such as Apple TV+.

But how does Cook’s Apple work in practice? As a leader, how does he differ from his cantankerous, perfection-obsessed predecessor? Who are the movers and shakers working underneath him? Cook still visits Jobs’s old office for inspiration and tells people: “This is Steve’s company.” But is it?


Jobs v Cook

You know you’re part of the Apple elite if you’re one of the few executives invited to a mandatory leadership meeting that traditionally takes place every Monday at 9am.

Eddy Cue, Apple’s services chief and a 30-year veteran of the company, Phil Schiller, Apple’s head of marketing, and Jeff Williams, its chief operating officer who is now in charge of design, are understood to attend, as does Deirdre O’Brien, the company’s head of human resources promoted this year to run Apple’s retail stores.

Such executives are all paid millions of dollars a year – but they spend it differently. While Cue is such a big Ferrari fan that he sits on the board of the Italian car-marker, Williams is quiet and unassuming – and drives an old Toyota Camry (Cook himself owns a BMW 5-series).

The Monday meeting, which can last for hours and was first introduced by Steve Jobs, has ruined many a weekend for already-frazzled Apple employees tasked with helping their bosses prepare.

Since Cook took over, such events have become considerably calmer. There is less shouting. Cook prefers to “wear people down through an endless barrage of questions”, according to Leander Kahney, who wrote a biography of the chief executive last year. Joswiak, Apple’s vice president of product marketing, told him that Cook would “slice you up with questions. You better know your stuff”. Often the only way to know Cook is upset is if he stops nodding.

“One style of leadership is being a magnet,” Jean Louis Gassee, a former Apple executive who is now partner at Allegis Capital, told us. “There’s another style that is technically called diamagnetic, where the iron lets the energy of the field flow through it. Tim Cook is more of the latter. He’s a facilitator of energy rather than a visionary.”

Cook apologises more than Jobs ever did, for bad hiring decisions, for poor rollouts (Apple Maps), for iPhone battery issues and for Chinese warranty policies.

He is also more aware of social issues, introducing a charitable matching programme for employees soon after taking over. Strangely for a tech executive, Cook likes to receive important messages through a human assistant, who disturbs meetings by quietly holding up a piece of paper in his line of sight. He wakes at 3.45am and reads messages sent by customers to the email address tcook@apple.com. He even responds to some.

Yet for all his differences from Jobs, Apple under Tim Cook is no party.

“Working for Apple is a pie eating contest where the winners are offered more pie,” one employee who worked there for more than a decade said. “It was non stop. Even on vacation I never felt like I could let go.”

Unlike at Facebook, where Mark Zuckerberg can make a billion dollar acquisition without telling the board, everything in Cupertino is process-orientated, according to Steven Levy, an author of several books on Apple. “Apple is a company that’s very buttoned up,” he told us. “You don’t have free radicals working there. Decisions are made very carefully. People are super-accountable. If Apple wanted to buy a company, there would be a serious methodical conversation and it would never leak.”

“Tim is almost a puritan,” MacFarlane added. “He doesn’t splurge. He doesn’t drive fancy cars. He’s all business.” With some exceptions, Apple executives under Cook are “super smart,” he added. “These people thought years ahead.”

 


Products v services

“Steve’s real interest was in product and design,” David Yoffie, a professor at Harvard Business School who has studied Apple for decades, told us. “He had little interest in anything else. Tim, from everything I know, spends his time much more broadly distributed across a much broader range of corporate activities.”

Some in the company fear, however, that Cook has no product vision: only a corporate one. One person who had a meeting with Cook was surprised that he spent an hour talking about the company’s foreign exchange issues (Apple’s revenue growth has been hit in recent years by a strong US dollar relative to other currencies).

While Apple remains heavily reliant on the iPhone to drive revenue growth, it has poured resources into software-based products such as Apple TV+ and Apple Music.

“Apple is a great devices company moving to services, whereas Google is a great services company trying to do devices,” John MacFarlane, the Sonos boss, told us. “They had a learning curve to catch up.”

As MacFarlane negotiated with Apple’s leadership over how his Sonos speaker interacted with the iPhone and Apple Music, his impression was that they did not see music subscriptions as a priority. “There wasn’t much money to be made, so it didn’t get their best and brightest,” he said. This view – that talent is not evenly distributed across Apple’s various services divisions – was backed up by two former Apple staffers who worked in those areas.

Even with these caveats, the top executive in charge of services is now one of the most important people at Apple, experts said.

“I would start with Eddy at the top,” said Harvard’s Professor Yoffie. “He’s been the point person for Steve and is now the point person for Tim on almost all new projects.”

A 55-year-old Cuban-American, Eddy Cue oversees all of Apple’s content stores including iTunes, iBooks, Apple Music, Apple Pay, Maps and iCloud.

Paid $22 million in 2016, the last year when his salary was publicly disclosed, Cue helped Jobs transform digital music with iTunes as well as spearheading the company’s $3 billion deal in 2014 for Beats, the headphone maker founded by the rapper Dr Dre. A huge fan of the Golden State Warriors basketball team, he was once accused of yelling at the popstar Rihanna to sit down during an NBA finals game (Cue denies this).

Some fear that Cue has too much on his plate. In a 2018 profile, the Information website alleged that he fell asleep in at least two meetings. In his own interactions with Cue, MacFarlane described him as polite and empathetic. “During our work with Apple music, my wife had breast cancer,” he said. “I don’t know how Eddy found out, but he found out and his own wife had gone through that. He was super nice about it.”

One former employee who worked with Cue said: “Eddy became more and more overloaded. His portfolio has grown so large that the biggest services like Apple Music get the most amount of attention and resources, but it tends to not work so well at the smaller ones.”

 


Hirings and firings

In the first 16 years of the new millennium, just two members of Apple’s famous design studio left the company: and one of them departed due to ill health.

The low churn rate was testament to the camaraderie within the two-dozen strong unit led by Sir Jony Ive and to the regard with which it was held by Apple’s product-orientated founder, Steve Jobs.

Times have changed. While Jobs would visit Ive’s studio three or four times a week, his successor is a more occasional presence. Amid rumours that Ive was “dispirited” by Tim Cook’s more operational focus, at least five senior members of the “ID” [industrial design] group have left in the last three years alone, including Ive himself.

“It was inevitable,” David Yoffie told us. “These people have all become rich, made a spectacular amount of money, but the CEO is not spending 40 per cent of his time with them anymore. It’s not as exciting as it once was.”

Ive’s unit operated like a separate fiefdom, sources told us. One person with knowledge of the team described how they were given special status within Apple, with privileges including security cards that could access all areas. Nevertheless, some designers are understood to have become frustrated after spending years on futuristic products that were never likely to come to market.

Ive reportedly clashed with Cook and Jeff Williams, the chief operating officer, over whether to pitch the Apple Watch as a luxury product. “My understanding was that Jeff and Tim were more interested in viewing it as a health and fitness device,” the executive said.

One person close to Ive said he would be performing very similar functions for Apple at his independent consulting firm, LoveFrom Jony. Ive left Apple primarily because the project that he and Jobs dreamt up – a world where consumer need could be met within the closed ecosystem of iOs – had effectively been completed, the person said.

“He completed what he was there to do, although he did it with poor humour for the last eight years because he was fucked off that his friend had died,” the person said, referring to Jobs.

Ive’s departure is not the only executive shake up at Apple to have caused controversy.

In 2012, Cook removed Scott Forstall, then in charge of Apple’s operating system and its much-derided Maps application. Forstall, who was known as mini-Steve for his abrasive nature, had clashed with Ive and caused aggravation amongst other senior staff.

“Cook is willing to inflict pain when it needs to be,” Gassee, the former Apple executive, said. “He’s no softie. No-one questions his authority.”

John Browett, previously the head of electronics retailer Dixons, was appointed in 2012 to run Apple’s retail stores but forced out after six months. Less obviously, Cook’s big hire to replace him as head of retail – Angela Ahrendts, the former Burberry CEO – left in April to pursue “new personal and professional pursuits”.

One executive who has risen sharply under Cook is Jeff Williams, 56, who took over management of software and hardware design after Ive left, fuelling speculation that he is Cook’s heir apparent. It is the first time that a staid supply-chain executive has been put in charge of core product creation.

 


What next for Ive? 

Ive is departing Apple to set up a consultancy whose very name, LoveFrom, seems like a hippyish rebuttal to what he’s leaving behind.

In July 2019, Ive filed a wide-ranging trademark for the term “LoveFrom Jony”. In October the US application was refused, however, on a number of grounds.

Firstly, the name was considered too close to an energy drink called ‘Johnny Love Energy’, which was a problem because Ive had identified “energy drinks” as among the products LoveFrom was considering developing.

But there was another reason for the rejection – a more controversial one. The US patent office said that Ive’s business could risk a “per se violation of federal law”. Why? Because Ive’s application mentioned that he wanted to use “unworked or semi-worked bone, horn, ivory, whalebone or mother-of-pearl”. The patent office noted that this could be in breach of the African Elephant Conservation Act and the Marine Mammal Protection Act.

Ive’s application was also rejected because one of the patent classes LoveFrom applied for was “growth preparations for hair”, which the office felt was too general. “Applicant must provide greater specificity as to the goods provided,” it noted.

A person close to Ive said the ivory wording was standard in EU trademark applications and had been mistakenly included in the US application. The errors in Ive’s trademark application may be no more than inadvertent cock-ups, but they sit uneasily with the designer’s reputation as a perfectionist. Steve Jobs would not have approved.

 


The future

Bob Mansfield, who left Apple’s executive team in 2013 to work on special projects such as the Apple Watch, was formally rehired by Cook in 2016 to run Project Titan, Apple’s secretive autonomous electric vehicle programme.

Despite Apple cutting 200 employees from a team of 1,000 working on the project last January, Project Titan is “absolutely not dead”, one analyst said last year.

It may have evolved, however, from a hardware project to a software play, where Apple develops autonomous car technology to feed into the next-generation cars of partner companies. We’ve dug up Apple patents for technology that will allow customers to summon cars with a wave of their hands, for instance, or to order the vehicle to drive to the nearest garden centre.

We also found a 2018 patent from Apple which signals how closely the company sees cars integrating with other controversial forms of technology.

The patent was for a sensor system which could identify any pedestrian about to step in front of the car using “facial recognition data”. After that, the car would blare out a verbal warning “which addresses the dynamic element by name.”

In other words, a person called Dave walking across the road could soon hear the words “Watch out Dave” shouted at them from an Apple-designed front bumper.

Apple may not have completely ruled out developing an entire autonomous vehicle or, alternatively, the sensor hardware which could integrate into third-party cars, however. It has hired senior Tesla executives specialising in hardware, including Doug Field, Tesla’s former chief engineer, and Steve MacManus, who served as Tesla’s vice president of engineering from 2015 until 2019. The appointments have been taken as a signal that Apple may not be out of the autonomous car hardware race after all.

thinkin

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