It was five years ago today that Tim Cook officially assumed the helm at Apple (NASDAQ:AAPL) as CEO. Steve Jobs would die a few weeks later, but he clearly hasn't moved on in the eyes of those who are now critical of Cook.
Apple investors have been served reasonably well under Cook's care. The stock's return including dividends has more than doubled over his five-year reign, up 103% in that time. That's slightly behind the tech-heavy Nasdaq's return, but it compares favorably to the S&P 500's 86% gain.
His run hasn't been a runaway success. The iPhone product line Jobs introduced nine summers ago continues to be the primary driver, here, accounting for 56% of Apple's revenue and likely even more of its operating profit. Outside of the perpetual refreshing of the iPhone, iPad, Apple TV, and Mac lines, there isn't a lot that wasn't around when Jobs himself was still around.
The one new major consumer product line -- last year's Apple Watch -- dominates its niche, but it hasn't done for the smartwatch what the iPod did for portable media players, the iPhone did for smartphones, or the iPad did for tablets. Throw in Apple sorely overpaying for its Beats acquisition and the iPad peaking in popularity two years ago, and you don't have a very flattering snapshot of Cook's reign.
But that view is wrong. It's incomplete.
It could've been worse
Cook's wooden anniversary as CEO comes at a crummy time. Apple is just coming off of a year-over-year decline in quarterly revenue for the first time in 14 years. However, with Apple generating far more revenue and earnings than it was under Jobs, it's undeniable that things could've been worse.
There's a fate far worse than merely being unspectacular, and it is -- it pains me to say -- what may have happened under Jobs if he had been calling the shots over the past five years. This isn't meant to come off as blasphemous or disrespectful to the man who made it all possible. I live surrounded by my Apple products today because of the genius that was one man. However, every CEO has a season, and these past five years likely wouldn't have been much of a harvest with Jobs and his headstrong ways.
He likely would've pushed through the high-def TV he was working on before his passing -- he had "cracked it" after all -- even as the market was falling more in line with cheap set-top devices like the Apple TV the tech giant already had. He possibly would've resisted making iPhones larger -- a move that caused a huge spike in business two years ago -- or iPads smaller, a move that may have extended its fleeting success. He once derided the iPad Mini-sized tablets put out by rivals as "tweeners" for being too big to be smartphones and too small to be tablets. Apple got a big boost by stretching the middle and going Plus with the iPhone and Mini with the iPad.
It's also easy to see the stock lacking some of the support it has today if it lacked the generous yield it now commands. Jobs never seemed to warm up to payouts. He preferred to hoard money. Apple hadn't paid a cash dividend since 1995, but that changed within months of Cook taking over.
It's certainly possible that Jobs could've dreamed up the next big thing in these past five years. There may even be a good chance of that. Obviously we will never know. However, visionaries with confidence can sometimes gamble a fortune away. Jobs was the right kind of leader to take Apple as far as he did, but the transition to a new CEO came at the right time, when Apple needed something else.
Here's a tip of the hat to Cook for being the kind of dutiful steward that makes sure the baton isn't dropped or carelessly squandered -- and an even bigger tip to Jobs for getting the baton that far.