Tim Cook picked up the mantle from Steve Jobs as CEO of Apple over a decade ago and grew it into a multi-trillion dollar company. Now, as Cook nears traditional retirement age, speculation abounds about who will succeed him.
Bloomberg's Mark Gurman joins host David Gura to discuss the challenges of replacing Cook, his potential successors and how that decision will impact one of the best-known brands in the world.
Here is a lightly edited transcript of the conversation:
David Gura: Every year, the top executives at Apple - of course, one of the largest and most influential companies in the world - are whisked away to an idyllic retreat usually in Carmel Valley.
That's about 90 miles south of the company's headquarters, in Cupertino, California. So, many of these execs travel by bus.
Mark Gurman: They can't bring their family, they can't bring their assistants. These are the 100 most important people at Apple.
Gura: Bloomberg's Mark Gurman has covered Apple for almost 15 years, and he says this annual meeting is one of the most important dates on the company's calendar.
It's something Steve Jobs started.
Gurman: They sit in auditoriums, different rooms of this beautiful resort in Northern California. They are taught and shown all of the goodness that's to come from Apple in the years to come.
Gura: It was at this retreat that Apple's so-called "Top 100" got a first look at the original iPad, Mark says.
They saw the MacBook Air and the Apple Watch. And got updates on the Apple Car project, which the company just scrapped.
Gurman: This is where you go to learn about Apple's future.
Gura: And while most of the focus is on product presentations - and prototypes, Apple's senior leaders are also taking note of who among them has been picked to make these presentations.
Gurman: I think the people at that event are probably always naturally trying to figure out who's next in line. Who's in charge?
Gura: That is ... who will eventually replace Tim Cook.
Jobs' hand-picked successor has been the CEO of Apple for nearly thirteen years. He was Jobs' deputy before that.
Gura: At Apple, succession planning is the elephant in the room, and even though Cook hasn't indicated he plans to leave the company anytime soon, Mark says there is growing speculation about when that'll happen who will be its next chief executive - and whether that person is in this group of Apple's most important people.
Gurman: We're nearing sort of the end of Cook's tenure at Apple, probably, right? He's going to turn 65 next year. He's older than most CEOs in the S&P 500. He's been at Apple for 25 years and Apple's at a precarious position because the executive team where they likely would choose their next CEO from most of the people on that executive team are all about 60 years old, or would probably be in their mid to late sixties by the time Tim Cook retires, leaving the company with very few reasonable options.
Gura: Today on the show:
The challenges of finding someone who could do one of the most demanding jobs in business.
Who's in the running, and how that decision will impact a $2.8 trillion company, and one of the best-known brands in the world.
I'm David Gura, and this is The Big Take, from Bloomberg News.
Gura: Tim Cook has been the CEO of Apple for more than a decade.
And part of his job involves planning for who will succeed him. Bloomberg's Mark Gurman says it's not the easiest job to fill.
Gura: Is that job description really well fleshed out? In other words, what does an Apple CEO need to be able to do?
Gurman: An Apple CEO needs to either be the visionary to bring new products to market. Or needs to be able to find who the visionary is and partner with that visionary to bring those new products to market.
Gura: It's a challenge that wasn't lost on Steve Jobs when he tapped Cook for the job.
Gurman: You know, the thing about Cook is that it is all consuming, and I think one of the reasons that Jobs made him the CEO, other than the fact that he was the most qualified, probably by a long shot, amongst the executive team at the time, is that Jobs knew how all consuming the next era of Apple would be, right?
And Tim's entire life for the most part, based on everyone who knows him and everyone you speak to about him is Apple.
Gura: Cook became Apple's CEO in 2011, under intense scrutiny.
He took over for Jobs, the company's founder, who was battling pancreatic cancer.
And in October of that year, Cook stepped into the spotlight, to unveil a new version of the iPhone:
Tim Cook: Good morning. This is my first product launch since being named CEO. I'm sure you didn't know that.
Gura: You can hear him cracking a joke to acknowledge what a big moment this was. He was under immense pressure - following in Jobs' footsteps.
Cook: I Love Apple. And I consider it the privilege of a lifetime to have worked here for almost 14 years.
Gura: As Apple's chief operating officer, Cook worked side-by-side with Jobs, during a period when Apple grew at breakneck speed. When it became much more than a computer company.
Cook: Just ten years ago, we launched the original iPod here, and it went on to revolutionize the way we listen to music.
Gura: Mark, you covered that transition in 2011. What can you tell us about the relationship between Steve Jobs and Tim Cook?
Gurman: They were close. I wouldn't say that they were best friends. Uh, I would say in many ways they were, uh, partners. Steve Jobs was the design mind. He was the person dreaming up these new products, and Tim Cook was the execution guy. He was the person for all intents and purposes, who was able to bring these products to market, get them manufactured, get them into retail stores, and so forth. And then when Steve Jobs stepped down and then ultimately passed away, what Apple lost was sort of that visionary to dream up new types of product categories, new designs, new user experiences
Gura: Jobs died on October 5th, 2011 - one day after Cook unveiled that new iPhone.
And in the years that followed, Cook made sure Apple continued to build on the runaway success of that device.
Gurman: The Apple watch for all intents and purposes is an accessory or an extension of the iPhone. Airpods are an extension to the iPhone, an accessory to the iPhone. What Tim Cook has done, he's taken the product lines that Steve Jobs created and envisioned, and supercharged them. When Steve Jobs passed, there was only one iPad model, the iPad 2.
Today, there are five, or even more iPad models available right now. The iPhone went from one or two different models to several different models. So what Tim Cook has been able to do is squeeze so much juice out of the lemons that are those original Apple form factors.
Gura: Under his leadership, Apple added products and services, along with new accessories.
The company branched into movies and TV.
It introduced an Apple credit card.
Gurman: At its core, I think Apple is still very much a technology company, but they like to position themselves as well as a lifestyle company.
Gura: Now, more than a decade into his tenure, do you see this company as Tim Cook's Apple, or is it still Steve Jobs' Apple that, that Tim Cook is the steward of?
Gurman: I think it's actually a mix of both. At its very core, Steve Jobs left Apple with something, you know, more than pretty good in the iPhone. And Tim Cook, I would say, has probably made the most of what he was left with. I don't think anyone could have done a better job following in the footsteps as legendary as someone like Steve Jobs.
Gura: People worried Steve Jobs would be irreplaceable, but now, there's a sense Tim Cook's shoes will be hard to fill.
Gurman: So The question is Apple moving forward, who was that new person to lead Apple into a new era with a new vision, with new types of products. And that's really what Apple needs to come up with to create its next 15 years.
Gura: There are a handful of names that come up in conversations about CEO succession at Apple.
But over the years, as Mark has reported on this, there's been a clear frontrunner.
Gurman: He can own the stage. He can talk the talk with government officials from China to Europe to the US. If something happened unexpectedly to Cook, I don't think Apple would miss a beat.
Gura: So, who is Apple's heir apparent? And who else is waiting in the wings, vying for the top job? That's after the break.
Gura: Before Tim Cook became Apple's CEO, he was the chief operating officer under Steve Jobs.
And when it comes to who will replace Cook, his current COO could easily be next in line:
Cook: And to tell us about some progress in this area, I'd like to invite up Jeff Williams. Jeff?
Gura: That's Cook introducing Jeff Williams at a product launch in 2016:
Williams: Last year, we introduced Research Kit. And our goal was to use technology to solve some of the biggest problems
Gura: Williams has been C-O-O for almost a decade now. He joined the company in 1998.
Gurman: Right now, he runs Apple's entire operations. He's in charge of the Apple supply chain.
He's in charge of Apple's health care efforts. He's in charge of Apple watch hardware and software engineering. He was in charge of the Apple car. He's involved with the Apple vision pro headset, and he's in charge of Apple's hardware and software design organization. So he has so much in his portfolio already, and he would be able to be a shoo-in pretty easily for Cook if something were to happen.
A lot of people have called him Tim Cook's Tim Cook.
Gura: And like Cook, Williams grew up in the South, he got an MBA from Duke, and had a stint at IBM before joining Apple.
But there's something else these two have in common. They're both in their early sixties.
Gurman: He's only two years younger than Cook.
Gura: And that could make William's path to succeeding Cook complicated.
Gurman: If Cook retires in three to five years, you can't name a 66 year old Jeff Williams as CEO of Apple. Right? The Street, the market, the employees, the board, probably wouldn't be terribly fond of that idea. You can't set up someone for a two to five year tenure as a new CEO of a company as big and as important as Apple.
Gura: This is not just an issue with Williams, though.
When you go down the list of other potential candidates among Apple's top management, a trend emerges.
Mark says many members of the company's leadership team are also hovering around retirement age.
And turnover at the executive level is pretty rare.
Gurman: When you're a Senior Vice President at Apple, you're essentially the CEO of a major division, right? You're at one of the most successful companies in the world. You're also getting paid $25 million per year as an Apple Senior Vice President. So from a financial standpoint, it's very worthwhile to stay around. But I think the people in Apple's executive team, they're motivated by more than money. I think there's a sense that a lot of these folks are very much motivated by the power that comes with being in that role. And so power is sometimes hard to give up.
Gura: Mark says, if it's not Williams, there are a few other candidates who are likely in the running.
They're all currently on the Apple payroll. Tim Cook himself has said he hopes the board taps someone from within the company. And they have their own trade-offs.
Finding a single person who can do everything that an Apple CEO needs to do is a real challenge.
One potential candidate is on his second stint at Apple:
Gurman: Craig Federighi, who's in charge of software engineering.
Gura: But, Mark says?
Gurman: Federighi probably doesn't have the business acumen to run the whole company.
Gura: There's also Deirdre O'Brien, who oversees Apple's sprawling retail operation worldwide.
Gurman: And before that, Uh, she was one of the company's top executives on operations and sales.
Gura: But according to Mark? ...
Gurman: Apple probably wants to try something new for a new era and not go with another operations or an HR person.
Gura: But Mark has identified another candidate. Who, with his age and experience, is a strong contender.
Gurman: Everything that I have learned while reporting the story points to a guy named John Ternus.
He is not even 50 years old. He's Apple's senior vice president of Hardware Engineering.
He joined Apple's executive team in 2021. He has quickly risen through the ranks. He used to be a VP in charge of Mac computer engineering. He eventually added the iPad, added AirPods. More recently, he added the iPhone and the Apple watch. And now he's in charge of basically all of the money making hardware for Apple.
And he's become an increasingly important face at the company. He's been increasingly promoted in their marketing. He's dealing with regulators in terms of right to repair laws. So he's becoming a bigger part of the Apple story.
Gura: Mark says Ternus had a marquee role this year, at that annual executive conference in Northern California.
And just this week, Apple unveiled some new tech, and Cook called on Ternus at that event to introduce those new products to the public.
Tim Cook: So here's John to tell you more. ...
John Ternus: Let's kick things off with iPad Air.
Gura: Mark says Ternus' prospects of becoming Apple's next CEO get better the longer Cook sticks around.
And there is no indication he plans to retire anytime soon.
Executives are not under the same pressure they used to be, to retire in their mid-Sixties.
Gura: Mark, I wonder if you could situate this conversation in kind of a broader cultural sea change we're seeing. Bob Iger back at Disney in his 70s. That must in some way sort of liberate Tim Cook to look perhaps at a longer tenure at Apple.
Gurman: Yeah, that's a very good point. Certainly the next U. S. president is going to be in their 80s during their tenure. You have Pat Gelsinger, who's the CEO of Intel. He was named to that role three years ago when he was about 60. So certainly you do have some older statesmen there with Tim Cook, you know, one of the, the, the older ones and Apple appreciates, as some people tell me, the people with gray hair there, that means they have experience and wisdom, and they've been around the block a few times. There is nothing that Tim Cook hasn't seen, and wisdom goes a long way for being an Apple executive.
Gura: For his part, Cook has a lot of unfinished business he's attending to right now:
Apple's seen a slowdown in sales, the company is taking hits from regulators - in the US and the European Union, and after Apple's adventure in automobile manufacturing came to a screeching halt, it's under pressure to deliver something new.
All of that, and more, is on Cook's plate, and Mark says no one is pushing him to step aside.
Gurman: There's no mandatory retirement age. And I would say that even if there was, uh, they'd rip that up or shred it or light it on fire to let Cook stay around as long as he wants to. Because he's been effective, Wall Street loves him. The stock price has surely been positively reflected by Cook's tenure.
And so I think Tim Cook is going to be the CEO of Apple as long as he wants to be the CEO of Apple and he won't step down a day before that.
Gura: This is The Big Take, from Bloomberg News. I'm David Gura.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
