Today's Reading


Each time a man stands up for an ideal, or acts to improve the lot of others, or strikes out against injustice, he sends forth a tiny ripple of hope, and crossing each other from a million different centers of energy and daring, those ripples build a current that can sweep down the mightiest walls of oppression and resistance.

Robert F. Kennedy

When Tim Cook took over as CEO of Apple in 2011, he had big shoes to fill. One of the largest, most innovative companies in the world had just lost its visionary founder. Steve Jobs and the company he cofounded were beyond iconic, and with him gone, pundits predicted disaster. With rising competition from Android, and uncertainty about future products, Cook had everything to lose by stepping into the driver's seat.

But the critics were wrong. Fast forward eight years, and under Cook's leadership, Apple has been absolutely killing it. Since Jobs died, Apple reached the ultimate milestone, becoming the world's first trillion-dollar company, making it the most valuable corporation in the world. Its stock has nearly tripled. Its cash reserves have more than quadrupled since 2010, to a record $267.2 billion—despite its spending nearly $220 billion in stock buybacks and dividends. For perspective, the U.S. government only has $271 billion cash on hand.

To get an idea of just how enormous Apple is during Tim Cook's CEO tenure, consider that the company made $88.3 billion in revenue and $20 billion in profits in Q1 of 2018, as I'm writing this book. By comparison, Facebook, with more than 2.2 billion active users, made just $40.6 billion over all of 2017. Not to mention that in just those three months, Apple made almost as much as its rival Microsoft—once the biggest company in tech—during the entire year of 2017, at $90 billion.

Cook's Apple is crushing the competition in almost every way:

* The iPhone is the single most successful product of all time. It's a juggernaut. Apple has sold more than 1.2 billion iPhones in the ten years since it was introduced—four of those years thanks to Jobs's leadership, then the rest under Cook. Cumulative sales are approaching $1 trillion in revenue alone. While Android may ship more handsets, Apple is by far the revenue leader and taking 80 percent of all the profit in the mobile industry. While Apple sells premium handsets with 30-40 percent profit margins, the rest of the mobile industry fights for the low end of the market, where margins are razor thin. And with the iPhone X and its offspring, Apple's market share continues to grow. The rest of the industry is left to fight over smaller and smaller scraps of profit.

* Apple is also succeeding in computers. Although computers play second fiddle to the iPhone, Apple has recently been growing its PC market share for the first time in decades—and is the only company doing so. PC sales are down 26 percent overall from their peak in 2011. Thanks to tablets and smartphones, the PC market seemed unlikely ever to recover. But since Cook took over, Apple has been steadily growing its slice of the market, from 5 percent in 2011 to about 7 percent today. That may seem like modest gains, but like with the iPhone, Apple is only competing at the high end of the market.

* Apple blew open a whole new industry with wearables. Launched in April 2015, the Apple Watch is the first major product of the Tim Cook era that had no input from Steve Jobs. It is a sleeper hit, with more than forty million Apple Watch wearers and sales up 50 percent quarter over quarter. Apple's watch business is already bigger than Rolex. Apple's AirPods are another hit; the company is expected to sell fifty million-plus AirPods and Beats headphones in 2018. With the new HomePod speaker, Apple's smart audio business could exceed $10 billion annually.

* Apple's service business is also growing astronomically. Responsible for $9.1 billion in Q2 2018, it is Apple's second biggest segment by revenue and is almost as big as the satellite TV company Dish Networks. If it were to stand alone, services would be a Fortune 500 company. Some pundits see its services business, built on sales of music, apps, and digital subscriptions, growing to $50 billion by 2020, which could make it bigger than Mac and iPad combined—and bigger than even Disney or Microsoft.

And perhaps the best is yet to come. Behind the scenes, Apple is rumored to be building a robot car, which, if successful, threatens to disrupt the $2 trillion global automotive industry the same way Apple crushed the mobile phone industry. GM and Ford may end up like Nokia and Motorola.

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