To shore up shareholder faith, Mr. Cook split the stock, increased the dividend and engineered a $90 billion buyback — steps that helped shares rebound almost entirely. He has taken other steps to strengthen the company, like pushing Apple products into China, a potentially huge market, and acquiring talent, most recently spending $3 billion to buy Beats, a music company that brings Apple two major music-industry shakers and deal makers, Dr. Dre and Jimmy Iovine. Mr. Cook has also looked outside of Apple for experienced talent. He has hired executives from multiple industries, including Angela Ahrendts, the former head of Burberry, to oversee the physical and online stores, and Paul Deneve, the former Yves Saint Laurent chief executive, to take on special projects. He also hired Kevin Lynch, the former chief technology officer of Adobe, and Michael O’Reilly, former medical officer of the Masimo Corporation, which makes health monitoring devices. Not to mention the music men of Beats. What makes Apple’s challenge particularly daunting is the law of large numbers. Its sales are so big that even another new strong product — unless it’s a gigantic hit on the order of the iPhone — won’t lead to the kind of growth to which some investors have grown accustomed, noted Toni Sacconaghi, a financial analyst who covers Apple for Bernstein Research. He put it this way: If Apple makes an iWatch and sells 10 million units in the first year, it would add a mere 50 cents to its earnings per share, barely a single percentage point. He often quotes Martin Luther King, Jr. and Robert F. Kennedy but doesn’t much talk about the origin of his political views. The speech he gave last December, in which Mr. Cook mentioned the cross-burning, started to give some hints. “Since these early days,” he said, “I have seen, and I have experienced, many other types of discrimination.” All of those, he continued, “were rooted in a fear of people that were different than the majority.” Apple declined to say what he meant by the reference to discrimination he experienced, but it did confirm the details of the cross-burning story. He rose to become executive vice president for worldwide sales and operations in 2002. In the period after he became C.E.O. in 2011, the working conditions in Chinese factories used by major tech companies, including Apple, came under increasing scrutiny. By April 2012, after suicides and accidents among Chinese factory workers, a quarter of a million people had signed a petition on Change.org urging Apple to improve working conditions in the factories. Apple since 2006 had already commissioned public reports on troubling practices inside many factories. In 2012, it also began publishing an annual list of its major suppliers, their locations, and what is made at the major ones, as well as reporting the working hours for more than a million factory employees. That’s a view shared by some investors. At a shareholder meeting on Apple’s campus in February, one shareholder — who later described himself as having free-market values — asked Mr. Cook whether Apple should avoid embracing environmental causes that lacked a clear profit motive. Mr. Cook did not respond by saying, as many executives would, that environmentalism is pragmatic and good for the bottom line. His reasoning was moral. “We do things because they’re just and right,” he said. He has a slight Alabama drawl and a cool delivery, but there was underlying pique in his voice when he rejected the idea that everything must be measured by return on investment. He concluded by telling shareholders, “If you want me to make decisions that have a clear R.O.I., then you should get out of the stock, just to be plain and simple.” He received rousing applause from the crowd, which included Al Gore, a member of Apple’s board. But the shareholder who asked the question, Justin Danhof, mourned that “I’ve never had a C.E.O. react that way.” In the following days, some stock analysts echoed the dismay, with one columnist, Robert Weinstein of The Street, wondering whether Mr. Cook “is shifting Apple’s focus from an aggressive luxury tech innovator into more of an increasingly philanthropic-focused company.”
Posted on: Thu, 19 Jun 2014 11:35:14 +0000
Trending Topics
Recently Viewed Topics
© 2015