What to expect from Apple's Tim Cook

With Steve Jobs on medical leave, all eyes are on his No. 2.

By TheStreet Staff Jan 20, 2011 12:54PM

Credit: Apple Chief Operating Officer Tim Cook ((C) Chris Hondros/Getty Images)By James Rogers, TheStreet

 

Investors listening to Apple's (AAPL)first-quarter conference call Tuesday hoping for some Steve Jobs-style showboating and fiery rhetoric were surely disappointed. A soft-spoken, somewhat reserved Southerner is now center stage at the world's biggest technology company.

 

With Jobs on medical leave, all eyes are now focused on his No. 2, COO Tim Cook. Whereas his flamboyant boss spiced up press events and analyst calls with the occasional dig at fellow Silicon Valley companies like Adobe (ADBE), Cook's conference call comments (save for one swipe at rival tablet makers) were much more restrained. The Alabama native instead made vague references to the "magic of Apple" while giving little away about the company's broader strategy and its succession plan.

 

Cook, of course, is familiar with this role. He has already taken the company's reins on two prior occasions: for two months in 2004 when Jobs was receiving treatment for pancreatic cancer, and again for six months in 2009.

 

Widely regarded as a safe pair of hands with an intimate knowledge of Apple, the COO's status as a capable lieutenant is unquestioned. A graduate of Auburn University with an MBA from Duke, Cook held stints at Compaq and IBM (IBM) before joining Apple as senior vice president of operations in 1998. Cook's success in that role and his subsequent job as executive vice president of worldwide sales and operations led to his promotion to COO in 2005.

"We believe investors would embrace Tim Cook in any potential succession plan," Goldman Sachs analyst Bill Shope said in a recent note. "Many investors became comfortable with Tim Cook as the permanent CEO during Jobs' 2009 medical leave."

 

Shope also believes that the "revolutionary" phase of Apple's mobile computing strategy, marked by technology launches such as the iPad and iPhone, is now complete. "Tim Cook appears more than qualified to shepherd this platform approach into the future," he said.

 

While new versions of the iPad and iPhone are expected to appear later this year, it is unclear if Apple has future game-changing devices up its sleeve. Instead, there is growing speculation that Apple will push into cloud-based services this year.

 

As an IT operations maven, Cook could provide the expertise needed to build out this cloud strategy, which is said to center on a massive new data center in Maiden, North Carolina. During his 12 years at IBM, Cook was in charge of manufacturing and distribution for the company's PC business in North America and Latin America, and he was also responsible for procuring and managing product inventory while at Compaq.

 

More recently, Cook has been credited with overhauling Apple's manufacturing and streamlining its operations.

 

Post continues after video:

 

Against this backdrop, at least one analyst thinks, Cook is likely to become a permanent fixture in the Apple hot seat.

 

"Obviously, Jobs is irreplaceable as the industry's innovator, but he has more pressing matters today than being CEO of Apple," said Brian Marshall, an analyst at Gleacher & Company. "Running a $100 billion annual revenue company while being forced to take periodic medical leaves is not fair to anyone."

 

Marshall adds that Cook's "flawless" performance while previously deputizing for Jobs make him an obvious, and maybe imminent, successor. "We expect he will become the full-time CEO of Apple this year with Jobs hopefully serving as a senior advisor," he added.

 

There are, however, hurdles in Cook's path, not least of which is the glaring absence of Steve Jobs. The Apple CEO has earned a fearsome reputation for turning ideas into reality, and his sheer force of personality, will and ability to get things done will be sorely missed, although he has vowed to stay involved with major strategic decisions at the company.

Other potential challenges for Cook could include phone pricing pressure with carriers, and, despite his conference call comments, increased competition in the tablet market.

 

Related Articles

0Comments

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

108
108 rated 1
257
257 rated 2
439
439 rated 3
626
626 rated 4
499
499 rated 5
530
530 rated 6
713
713 rated 7
522
522 rated 8
339
339 rated 9
136
136 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
UPLULTRA PETROLEUM Corp10
EOGEOG RESOURCES Inc10
SWNSOUTHWESTERN ENERGY COMPANY10
TAT&T Inc9
COPCONOCOPHILLIPS9
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.