Inside Tim Cook's Apple

"I just want to build great products ... I think if we do that, then the other things [revenue and shareholder returns will] follow."

So said not Steve Jobs, but Tim Cook -- the man Jobs hand-picked to replace him as CEO of Apple (Nasdaq: AAPL  ) -- at this week's D10 conference, sponsored by The Wall Street Journal and AllThingsD.

While the two executives are clearly different in some ways -- Jobs famously told biographer Walter Isaacson that Cook isn't a "product person" -- there are striking similarities in the way they think about the company Jobs and Steve Wozniak co-founded more than three decades ago.

But don't take my word for it. Reporters Kara Swisher and Walt Mossberg have interviewed both executives during the "D" conference: Cook this week, and Jobs in 2010. I've compared the transcripts. Read on for a closer look at what I found.

On how Apple is run
Great products are Apple's top priority. The process by which they are created is secondary.

Jobs: "We are organized like a start-up. We are the biggest start-up on the planet. No committees. The whole meets once a week for three hours."

Cook: "Our North Star is to make the best product ... There's not a policy or commandment that says, 'Thou shalt have One' [iPhone]."

On the necessity to discard the past when inventing for the future
Unlike Microsoft (Nasdaq: MSFT  ) , which has long stressed compatibility with older software and systems, Apple has never feared forcing users to upgrade.

Jobs: "This transformation [to a post-PC world] is going to make some people uneasy ... because the PC has taken us a long ways. It's brilliant. We like to talk about the post-PC era, but when it really starts to happen, it's uncomfortable."

Cook: "In my view, the tablet and the PC are different. You can do things with the tablet if you are not encumbered by the legacy of the PC ... Products are about trade-offs, and you have to make tough decisions. You have to choose."

On leapfrogging
Rarely the first mover in it markets, Apple has profited most by leapfrogging early entrants. Think of the iPhone introducing the finger-operated touchscreen as a standard handheld interface that Google (Nasdaq: GOOG  ) has mimicked for the Android OS.

Jobs: "You want to share your content that you bought among your various devices ... You can't do that without a wire. We need to work harder on that. We need to do better. Anytime soon? We're working on it."

Apple introduced iCloud at last summer's Worldwide Developer Conference.

Cook: "We would look not just at this area [TV], but other areas, and ask, can we control the key technology? Can we make a significant contribution far beyond what others have done in this area? Can we make a product that we all want? ... Those are all the things we would ask about any new product category."

On China
Apple has taken heat for trouble with the working conditions at contract manufacturer Foxconn.

Jobs: "We're all over this. Foxconn is not a sweatshop. It's a factory, but they've got restaurants and movie theaters ... We're trying to understand right now before we try to go in with a solution."

Cook: "Some people want to work a lot. They want to move and work for a year or two, and then move back to their village and bring back as much money as they can ... We're micromanaging this [process]."

According to the AllThingsD transcript, Cook is referring to a program that monitors 700,000 manufacturing employees in China; he says Apple is now 95% compliant with regulations.

On the creative process
Walter Isaacson's biography of Jobs reveals an Apple that stresses creative collaboration where the best ideas bubble to the surface.

Jobs: "What I do all day is meet with teams of people ... We have wonderful arguments. The best ideas have to win, otherwise you don't have good people who stay."

Cook: "I spend my day working with teams on various products ... It is my oxygen, that's how strongly I feel about it."

Apple 2.0, not much different from Apple 1.0
Surprised by the similarities? That's understandable. Recent headlines here and elsewhere boast of the various ways Cook is changing the Mac maker. Fortune editor Adam Lashinsky has a feature story on this very subject. In it, he reveals a number of changes from the days when Jobs ran roughshod over a talented team in a grand quest to build the best products.

Reported differences include more MBAs, a friendlier atmosphere but more corporate feel, and a desire to settle for "good enough" rather than strive for "insanely great." In short: Lashinsky's Apple sounds more like Dell (Nasdaq: DELL  ) , with creative geniuses replaced by spreadsheet jockeys in a horror tale eerily reminiscent of the 1950's classic Invasion of The Body Snatchers.

Cook struck a very different tone from the stage at D10: "You can only do so many things great, and you should cast aside everything else."

So far, he has. And I believe he will continue to. Lashinsky is a top reporter. I've no doubt he has good sources. But I also strongly doubt the story he's told is anything more than an abridged version of a single chapter in a long book that's still being written.

Cook may not be as much of a "product person" as his predecessor, but like Jobs, he appears singularly focused on creating great products. Investors will do just fine so long as that's true.

Do you agree? Disagree? Please weigh in using the comments box below. And if you're looking for more information on why some investors are betting big on Apple right now, check out our new premium research report. In it, our senior technology analyst gives the unique pros and cons that Apple faces and what they mean for investors.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Apple and Google at the time of publication. Check out Tim's web home, portfolio holdings and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

The Motley Fool owns shares of Apple and Microsoft. The Fool owns shares of Google. Motley Fool newsletter services have recommended buying shares of Google, Microsoft, and Apple. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. Motley Fool newsletter services have recommended creating a bull call spread position in Microsoft. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


Read/Post Comments (6) | Recommend This Article (27)

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 May 31, 2012, at 4:13 PM, oriorda wrote:

    Companies as large as Apple are like ocean going tankers: they're huge, with tremendous momentum. Nudges on the tiller have a minuscule effect measured over a short term, and can best be judged in hindsight, way off in the future.

    It's far too early to be able to discern the effects of a different management style as practiced by Tim Cook. The changes will be apparent over a 5 or 10 year period.

    Journalists need to grab attention through hyperbole, but we don't have to believe that what they say is divined. It's just a guess most of the time.

  • Report this Comment On May 31, 2012, at 4:44 PM, tkell31 wrote:

    I think we'll find out very soon. Cook boldly announced new outstanding products. If that turns out to be the iPhone5 and a refreshed mac than I think Apple is almost at a peak. The momentum will carry it forward for another 12-18 months, but without new innovative products it will be impossible to sustain growth as competitors take market share. However, if there really are new "outstanding" products being released then Apple should hit 700+ in short order. As a longtime shareholder I'm excited about what Cook meant, but enough of a cynic to start preparing for life without Apple (i.e. almost guaranteed outstanding returns).

  • Report this Comment On May 31, 2012, at 5:46 PM, digitalgranpa1 wrote:

    Apple is a winner. Steve Jobs helped to build the company into what it is today. But I believe It took all of the people working for it to get that job done. They are still there today. They have the "corporate knowledge" for it to remain successful. Tim Cook will contiue to lead Apple in the direction Steve Jobs pointed the company. I expect the new products they produce this year to outperform their competitors products. Their stock will follow in the same fashion and reward us shareholders with the results. I have been buying additional shares on dips. This company is a winner.

  • Report this Comment On June 01, 2012, at 3:30 AM, lowmaple wrote:

    Jobs' leagacy still carries on. But he wasn't the only person perfecting the product. One fear I have is corporate espionage which may allow others to build copies quickly. However I have no idea as I havn't been within 100 miles of H Q.

  • Report this Comment On June 01, 2012, at 8:06 PM, 1984macman wrote:

    I respect Mr. Lashinsky but after watching snippets from the interview with Mr. Cook I have to say I am not inclined to agree with Mr. Lashinsky. Mr. Cook appears to have a clear vision for Apple Inc's future.

  • Report this Comment On June 02, 2012, at 2:08 PM, MUNECA1985 wrote:

    There's no argument that Apple is head and shoulders above all others in the tech business. Having said this, Steve was Steve - and we all know what was produced at Apple while he was at the helm, and Tim is Tim - and we still don't know what he can help to produce at Apple. Right now all he's doing is keeping the ship afloat - in spectacular fashion I might add, but until the next "BIG" thing comes out of Apple with Tim at the helm, we won't know if he's capable of keeping Apple on the cutting edge of the tech industry. By the way, in my opinion Apple TV isn't the next "BIG" thing.

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