Apple CEO Tim Cook became the head of Apple, succeeding Steve Jobs on August 24, 2011. Due to Jobs’ reputation as an ‘icon of innovation,’ there were some uneasy views of him at the beginning of his inauguration, but now, 12 years later, Cook’s role has been evaluated as successful.
Apple’s sales for the fourth quarter of 2023 (the first quarter of the fiscal year) announced on the 1st were $119.58 billion. That’s more than four times the $26.74 billion in the fourth quarter of 2010, before he took office. Apple’s market capitalization has soared nine times since Cook took office. At the time of Cook’s inauguration, Apple’s market cap was $349 billion, but it is now close to $3 trillion.
It is said that Cook’s leadership was responsible for the iPhone’s reign as the world’s best smartphone for ten years and the success of a new product called the Apple Watch. He strengthened the service business sector, including Apple Pay, and established the ‘Apple Dynasty’ with the ‘Apple Ecosystem’ strategy that connects hardware, developers, and customers.
Cook, who developed Apple into the world’s most expensive company, is often evaluated as having emerged from Jobs’ long shadow and surpassed him. However, Apple is once again facing strong challenges and is faltering. Apple lost its leading position in the global stock market, which it had held for over two years, to Microsoft (MS) last month. This may be a preview of what’s to come for Apple.
Apple’s sales growth rate in the fourth quarter of last year was 2% compared to the previous year, ending four quarters of negative growth (decrease in sales) starting in the fourth quarter of 2022. However, the performance is shabby compared to the double-digit increase in sales of competitors during the same period. Microsoft and Amazon recorded sales growth of 17% and 14%, respectively, while Google parent company Alphabet also surged 13% and Facebook parent company Meta soared 25%.
The status of the iPhone, which accounts for half of Apple’s sales, is shaking. In China, one of Apple’s largest markets, iPhone sales fell 13% from a year ago. The AI phones first released by Samsung Electronics, along with the ‘Mate 60’ released by China’s Huawei in August last year, are gaining popularity and are threatening the iPhone.
Taiwan’s TF Securities analyst Ming-Chi Kuo, who specializes in Apple, observed, “Apple could see the biggest decline among major global mobile phone brands this year.” The reality is that the popularity of the Apple Watch, launched in 2015, has waned, and the popularity of laptops, Macs, and tablet PCs, such as the iPad, is not what it used to be.
In addition, the ‘closed ecosystem’ of the App Store, which drives the growth of the service sector, is starting to crack. Apple has been allowing apps to be downloaded only through its App Store and has been charging a commission of up to 30% when users pay. However, starting in March, the European Union (EU) will implement the Digital Markets Act (DMA), which will open these closed platforms of large companies. In response, Apple recently decided to allow apps to be downloaded from other app stores and lowered payment fees to up to 17%. Epic Games, the maker of the popular game Fortnite, filed a lawsuit in 2020, claiming that Apple’s App Store payment system violates antitrust laws and is anti-competitive.
“There may be cracks in the ‘walled garden’ where Apple controls app distribution on the iPhone,” the analysis said. Apple is also falling behind in the AI competition, which is gaining popularity around the world. Microsoft, Google, etc. are already generating new profits by installing AI functions in their products, but Apple has not yet released a significant AI product.
Although CEO Cook predicted that “AI products could be announced by the end of this year,” two years have already passed since ChatGPT was introduced to the world. It is difficult to guarantee the success of the Vision Pro, a mixed reality (MR) headset released on the 2nd, as sales this year are expected to be only around 500,000 units. In addition, as it is reported that the launch of the self-driving electric vehicle ‘Apple Car’, which has been ambitiously prepared, will be delayed again to 2028, the outlook for the future industry is not bright.
Cook, who was in his early 50s when he took office, is now well over 60. Cook’s leadership will be tested to see how he can overcome the challenges facing Apple and regain its position as the world’s most expensive company.