Does Tim Cook's Apple Think Different?

It's been just over two months since the late Steve Jobs handed over the reins of Apple (Nasdaq: AAPL  ) to longtime right-hand man Tim Cook. He's run the show numerous times before, but now that his name is officially etched on the CEO plaque, has anything changed?

The Wall Street Journal recently reported on some of the internal changes that have been happening lately with Cook in charge. Jobs never cared for bureaucratic tasks, while Cook doesn't seem to mind tackling them. He also tends to be more open with employees, sending out emails addressed to the "Team."

Jobs had long been criticized for never reinstating Apple's philanthropic programs for charitable giving, after scrapping them in 1997 upon his return to the company. Back then, the rationale was to help get the struggling Mac maker back in the black -- a rationale that stopped holding up long ago, as Apple's fiscal 2011 booked a $25.9 billion net profit. One of Cook's first changes, which took place in early September, was to reinstate the program and match employee donations of up to $10,000 per year made to non-profits, thus ending Jobs' 14-year embargo.

While you can still expect the same characteristic secrecy from the company, Cook is expected to be more open with shareholders and customers. The real test will be whether he continues Jobs' unique practice of personally responding to customer emails.

Many of Apple's supply-chain and operational successes are attributed to Cook. The company is allegedly set to revamp its retail-store operations by heavily leveraging its iOS Apple Online Store app. A new addition will be the ability to order products for in-store pickup and have them ready within 12 minutes. The change is expected to help alleviate foot traffic and reduce shipping costs. In addition, customers may be able to use the app for self checkout using the iPhone's camera. In all likelihood, these changes may also be tied back to Cook.

The WSJ report also mentions that Cook is more open to alternatives with Apple's $81.6 billion pile of cash, notably share buybacks or a (gasp) dividend! Apple dividend talk has always been a hot topic, but I'll take capital appreciation of roughly 4,200% over the past 10 years over a 3% to 5% possible yield any day of the week.

Beyond the dollars, dividends also carry important informational content. Specifically, the initiation of a dividend signals that the growth days are over, which would certainly be bad news for Apple investors. The same thing happened when Microsoft (Nasdaq: MSFT  ) started paying its dividend as it matured, and we all know how that stock has done over the past 10 years.

While Cook has started to make his marks on Cupertino, Apple will always be Apple.

Fool contributor Evan Niu owns shares of Apple, but he holds no other position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Apple and Microsoft. Motley Fool newsletter services have recommended buying shares of, and creating bull call spread positions in, Apple and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (3) | Recommend This Article (7)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 04, 2011, at 8:59 PM, Oldfool103 wrote:

    I would much rather sell one of my $165 shares for $500 than have it yield $10 a year, or so.

  • Report this Comment On November 04, 2011, at 11:22 PM, adamj980 wrote:

    I don't think it has to mean growth is over, just that they have to do something with $90 billion and if not going to invest it give to who it belongs.

    Earnings can still grow with more carrier signups and developing countries really adopting. They aren't using this cash anyway.

    I say buy some companies, buy back stock or give a big one time dividend. They have to do it sometime, won't shareholder eventually say jeez isn't $100 billion enough? or what $150 billion. The amount of cash the company generates is staggering.

    any who, just some thoughts.

  • Report this Comment On November 05, 2011, at 9:10 AM, hemhog wrote:

    Apple's growth will continue to be staggering.

    Apple knows how to use its money to create enormous wealth, more jobs, more valuable products and a better life for millions of people.

    This creation of wealth lifts all boats and has a multiplier effect. Hundreds of billions of dollars worth of better lives, more money and more jobs will go to millions of people. Just giving away, say, $70 billion is not likely to help many people very much. Need is infinite. All Apple has is around $90 billion. While Apple was giving that way, they would be increasingly resented. If they money ran out, the company would be hated both by those who stopped getting money and by those who never got any.

    It would be immoral for Apple to do so little good with money that could produce so dramatically much wealth for the world as a whole.

Add your comment.

DocumentId: 1584561, ~/Articles/ArticleHandler.aspx, 7/25/2014 7:53:00 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement