And he also noted: “Revenue & earnings quality matter.”
He’s wrong on that last point — at this moment, nothing matters, so it might be a good idea to sit very quietly and think hard about the growth-at-any-cost mantra that has illuminated tech for the past 13 years. No less than the chief executive of the size-obsessed Uber, which Gurley financed, was out this week preaching restraint. “We have to make sure our unit economics work before we go big,” said Dara Khosrowshahi in a note to his employees. “We will be even more hard-core about costs across the board.”
As it turns out, there is always a cost.
Tripp Mickle recently joined The New York Times to cover Apple, after nearly eight years at The Wall Street Journal. He has a book out this month, “After Steve: How Apple Became a Trillion-Dollar Company and Lost Its Soul.” I’ve edited his answers.
When Steve Jobs died in the fall of 2011, many thought Apple wouldn’t be able to thrive without him. Of course, the opposite has come true as Apple has become one of the most valuable companies on the planet. To what do you attribute that?
Tim Cook and the rest of the Apple leadership team deserve a great deal of credit for proving the skeptics wrong. Early on, Cook did an admirable job of keeping together the team Jobs assembled and encouraging it to find a new way of working. He empowered Jony Ive, Apple’s design chief, to lead the development of the Apple Watch. The project gave birth to AirPods — and a nearly $40 billion annual business. It also alleviated, for a time, questions from customers and Wall Street about whether Apple could create another new product category.
Perhaps more important, Cook increased Apple’s financial discipline, controlled costs and found a way to squeeze more sales out of the iPhone through apps and subscription services. The profitability of that business increased Apple’s value in the eyes of Wall Street. Essentially, Cook recognized that the iPhone had made Apple more powerful than any cable or wireless company in history because its signature product, as Oprah said, was in one billion pockets.
Apple has turned in consistently spectacular financial results. Who deserves the credit: Tim Cook or the iPhone itself?
The two are inseparable. When Tim Cook stepped in as chief executive in 2011, Apple was shipping 20 million iPhones a year. Today, it ships 200 million. It has done so without a major slip-up — and even benefited from a calamity at rival Samsung, which was challenging Apple until exploding Galaxy phones caused its business to founder.