A tale of two CEO letters: Cook in 2019, Jobs in 2002
The changing face of Apple
A lot has been written about Tim Cook’s letter to investors about the decline in expected revenues in the first quarter of the year. The letter is available here for those who wish to read it. It is a long document, spanning over a thousand words and carefully spelling out the reasons for the decline in revenue and the measures that Apple will be taking to make sure things do not spiral out of control and that this is but a blip on what promises to be a promising feature. Towards the end of the letter, Cook states:
“Apple innovates like no other company on earth, and we are not taking our foot off the gas.”
It reminded me of the last time an Apple CEO had to send out a similar letter. It was almost seventeen years ago. The year was 2002 – there was no iPhone or iPad, no App Stores, and the iPod had been around for less than a year and worked only with a Mac. Apple was still a company that was mainly about computers – the iMac, the MacBook Pro and so on. And well, it had been on the edge of complete and absolute disaster less than a decade ago. In this scenario, the company had issued the following statement:
Apple today announced that it expects to generate revenues of about $1.4 billion to $1.45 billion in the June quarter, down from previous guidance of about $1.6 billion. The lower-than-expected revenues are primarily due to soft demand in the consumer and creative markets such as advertising and publishing. Geographically, revenues in Europe and Japan have become particularly weak. The revenue shortfall is expected to be offset significantly by higher-than-expected gross margins primarily due to lower costs of some components. Accordingly, the Company has revised its earnings guidance to $.08 to $.10 per diluted share, compared to previous guidance of $.11 or slightly higher.
“Like others in our industry, we are experiencing a slowdown in sales this quarter. As a result, we’re going to miss our revenue projections by around 10%, resulting in slightly lower profits,” said Steve Jobs, Apple’s CEO. “We’ve got some amazing new products in development, so we’re excited about the year ahead. As one of the few companies currently making a profit in the PC business, we remain very optimistic about Apple’s prospects for long-term growth.”
Just two paragraphs. With no long drawn out explanations as to why the earnings had to be revised downwards. And just like Cook, Jobs too makes a telling statement about Apple’s creativity towards the end:
“We’ve got some amazing new products in development, so we’re excited about the year ahead.”
Now, a lot has been read into these two letters from two CEOs who have taken Apple to incredible heights. For, if Jobs was one of the founders and the king to returned to his kingdom to save it from imminent destruction, Cook is the man who made the same company the first Trillion Dollar company in the world. However, the broad consensus in many circles (especially senior Apple fans and followers) is that the company needed more of Jobs confidence (bordering on arrogance) than Cook’s careful analysis at this challenging time. “Jobs would have just told people to **** off and cut the crap, instead of making all these long winced explanations…,” is what many are insisting. And they also feel that this would have been a better approach. That Tim Cook’s humility and penchant for being understated was actually detracting from Apple’s overall image of being a creative company full of Mavericks who worked by their own rules rather than going by convention. That perhaps Apple should have confronted its drop in earnings with defiance rather than patience.
I have just one thing to say: take a look at that statement made by Apple in 2002. And replace Jobs’ name with that of Tim Cook. And THEN tell me if it would have sounded convincing. I have seen both men for a while now, and can tell you that Cook’s long explanation would have seemed as odd coming from Jobs as Jobs’ own brief statement would have coming from his successor.
For the simple reason, that (caps alert): TIM COOK AND STEVE JOBS ARE DIFFERENT PEOPLE.
Jobs’ statement in 2002 was seen as being typical Jobs because it reflected what the man was – someone with immense confidence in his team and vision and remarkably, someone who did not seem to be concerned about explaining why he was doing something to the public at large (Jobs was famous for distrusting consumer research, remember?). Cook, now, is cut from a very different cloth, even though it too comes from Apple. The current Apple CEO is known to be more of a people’s person and empathetic, and yes, from what I have seen, he does seem to be concerned about explaining his stance on different issues. He is more a democrat than an autocrat, and for all the criticism that people direct at him for this relatively low profile and less swagger-y approach, it is difficult to argue with the sheer weight of statistical success he has achieved with Apple. People might complain about “iterative updates” and a relative lack of “revolutionary” products, but it is very difficult to argue with someone who made an organization the first Trillion Dollar company.
The stark fact that a LOT of Apple fans seem to be forgetting is that Jobs was an aberration. He was NOT the default Apple employee. Even in Jobs’ own time at Apple, there were people who behaved very differently from how he did, from Apple’s co-founder Steve Wozniak to Andy Hertzfeld to Joanna Hoffman and even the man everyone considers to be Jobs’ closest friend and ally, Jony Ive.
All of which makes the current argument about “Jobs would have done things differently” rather irrelevant. Of course, he would have. So would have Wozniak, had he been in charge. Or Ive. So why the surprise if Cook decided to explain the downturn in revenue in detail? That is the way he is.
People are different. And react differently to different situations.
Jobs would have approved.
After all, this is the company that prides itself on Thinking Different.