Is the Post-Jobs Apple Starting to Emerge?

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The countdown is on for both the iPhone 5 and the iPad Mini. While neither has been formally announced yet, Apple (NASDAQ:AAPL) is holding a special event on Sept. 12 that’s a lock to be the iPhone 5’s unveiling, and the rumor mill is in overdrive about an October reveal of the iPad Mini. If this thing is real, you can count on Apple getting it out before the crucial holiday shopping season.

Coming up on a year after his Oct. 5, 2011 death, are we finally seeing in these devices the company Apple will be without Steve Jobs at the helm? After all, Jobs was firmly against a smaller iPad and a bigger iPhone, both of which are expected.

Not yet.

While CEO Tim Cook is beginning to make moves that will visibly change Apple from the company Jobs ran as his personal fiefdom, Apple remains in a transitional phase — especially when it comes to its products. Much of Jobs’ vision remains in the releases that we’ll see in coming weeks, but Cook’s influence is being more firmly felt, too.

An Operations Guy

To say Jobs was intimately involved in product design is an understatement. As New York Times writer Nick Bilton points out, he was obsessed with design and sweated the details like few other CEOs have ever done. Cook, on the other hand, came from an operational background and rose through Apple’s ranks based on his accomplishments in relentlessly perfecting Apple’s supply chain management.

Where Jobs was about releasing a perfect (and often unexpected) gadget, Cook’s approach is less tactile and all about efficiency. He delegates instead of micromanaging.

One area of Apple’s operations that has seen a definitive swing to Cook’s approach is in retail. When Jobs envisioned the Apple Store, his design aesthetic was a big part of the experience, and he hired Ron Johnson from Target (NYSE:TGT) to implement that vision. Apple Stores quickly gained a reputation for their appearance and user experience.

Cook’s replacement for Johnson, who left Apple shortly after Jobs’ death to become CEO of J.C. Penney (NYSE:JCP), was John Browett, then CEO of Dixons (a U.K. electronics chain). It quickly became apparent — through well publicized layoffs — that Cook’s new retail chief was focused on bringing efficiency and greater profits to Apple’s retail efforts.

Continuity and the Product Pipeline

Although Jobs was usually at the forefront and more than happy to take credit for Apple’s blockbuster products, the company had a solid design team working in the background. Jonathan Ive, Apple’s senior VP of industrial design, has been a constant who worked closely with Jobs. While Jobs is gone, Ive and other senior executives remain — the well of ideas has hardly dried up.

At the same time, Apple’s product roadmap is laid out years in advance, and the company has methodically followed a program of incremental improvements across product lines. Looking from the original iPhone to the iPhone 4S, there’s a clear evolution from generation to generation.

So, don’t expect any drastic product changes anytime soon under Cook, and expect to see the specter of Jobs’ input for a while yet. The rumored iTV, which has been expected for a year or more, may be the last time in a while an Apple product breaks into truly new territory — and Jobs had his hand in that.

What Might a Truly Post-Jobs Apple Look Like?

We’ve already seen signs of what Apple will become. The company’s new mobile operating system, iOS 6, and its latest desktop OS, Mountain Lion (OS 10.7), are showing some lapses in detail — the kind of things Jobs would catch and make Apple’s developers sweat over. In comparisons between Apple’s latest OS and Microsoft’s (NASDAQ:MSFT) Windows 8, reviewers are beginning to suggest that Apple should steal some pages from Microsoft.

Cook’s Apple will continue to be profitable, but less likely to take risks than Jobs’ Apple was. And when it does, I suspect the loss of that Ives/Jobs dynamic means less certainty that the results will be a hit. The company is likely to still knock some new products out of the ballpark, but its days of hit after hit in new product categories that it essentially invents and then dominates (iPod, iPhone, MacBook Air and iPad) will probably be over.

The post-Jobs Apple will be less obsessed with secrecy (we’re already seeing that with the large number of iPhone 5 leaks and Apple’s apparently blase attitude toward them), will continue to focus on efficiency gains, will pursue patent licensing revenue and will be less likely to venture into new markets like it did with mobile.

As a result, the truly post-Jobs Apple is destined to be a blue-chip stock, one that’s reliably profitable. In fact, worldwide growth in smartphones and tablets over the next decade is expected to be huge (as pointed out in a recent Slate article, only three in 10 phones sold today are smartphones), so expect Apple’s profits and stock price to continue to climb.

But a more conservative Apple under Cook is unlikely to sustain the sort of 50% annual growth that investors have come to expect, at least in the long run.

Brad Moon has been writing for InvestorPlace.com since 2012. He also writes about stocks for Kiplinger and has been a senior contributor focusing on consumer technology for Forbes since 2015.


Article printed from InvestorPlace Media, https://investorplace.com/2012/09/is-the-post-jobs-apple-starting-to-emerge/.

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