Apple in 2017

Posted by kdow on Nov 8, 2017 3:54:24 PM

Photo by Oliver Pecker on  Unsplash

We get it. In 2017, Tim Cook’s performance as CEO could be rated as exceptional as he steers Apple towards being the first trillion-dollar business in history.

As CEO, he’s been bullish on privacy, product innovation and business stability. But as much of his public façade apes a finely tuned moral compass, the recent Paradise Papers brought Apple’s tax affairs back into the limelight.

I’ve been using Macs my entire adult life. I struggle to troubleshoot basic Windows issues because I’ve not used Windows that much. I’m not as much an Apple fanboy (and I am) as I am a lifelong practitioner of the Macintosh lifestyle. In all likelihood, that won’t change.

Tim Cook is a phenomenal CEO. His, and Apple’s, performance shows that. But so was Balmer at Microsoft. The comparison has been criticised but it is fair. Balmer steered Microsoft through some of it’s most profitable times, shipping products that millions used. But there was no product vision or scope for growth beyond install-base upgrades.

Apple’s potentially on the turn to a similar(ish) road. They’re not attracting enough net new customers, but instead they’re relying on their existing install base and placing some (very smart) bets on emerging markets where possible (India, China). But give that enough time and it’ll stall.

Apple needs some visionary product leader to step in to do more than just attach touch screens to stuff. Not necessarily as CEO. Cook is steering the financial ship with incredible aptitude. But they need a bullish visionary who can see 5, 10, 20 years into the future to design & work on the things we don’t even know we need yet.

But let’s say they do hire/promote/reveal their product vision guru who decides that everyone needs some particular product that we hadn’t considered before. And the product roadmap excels, sells well and keeps the good ship Apple profitable. They’ll still need to address their morality.

Apple is reportedly storing billions in offshore accounts to avoid paying tax. And it’s all legal. It’s merely moral dignity that they’re bending. Which goes against the public image of Cook. And Cook, as CEO, is keeping his businesses best interests to heart by storing billions in accounts in tax havens. Because that’s the best way to serve his bosses, the shareholders, who will likely soon value the company at more than any company in the history of the stock exchange. Again, as CEO, that performance is unfathomably good.

However, you can’t maintain that moral high ground for long when the tax being held offshore, legally, isn’t being used to educate a new workforce, keep them healthy and allow them to commute to work on trains/buses subsidised through taxation.

The strain on a society being bled dry by tax evading companies is huge. But one element that’s particularly annoying is that the smaller guys, the potential disruptors to the Apple’s of this world, cannot save money by skirting tax laws. They contribute fairly because they don’t have the resources to skip the tax codes in various juristictions. And that hurts their ability to attempt to compete because the big guys are able to skirt their societal responsibilities while benefiting from said society.

Of course, appealing to a moral high ground holding human is all well and good. And Tim Cook, by all accounts, seems like a principled & morally well-adjusted citizen of the world. But in his work capacity he is an officer of a public company, who’s responsibility is to it’s shareholders’ wishes.

My point is that Apple can still remain as exciting as it was years ago, but the excitement is waning and almost entirely reliant on a new iPhone feature. The companies’ financial performance is outstanding. But it’s products need to excite & inspire a new generation of consumers. And as a company, they need to find their moral compass; one that aligns nicely to their perceived public image.

Note: Since I originally drafted this (7th November, 2017), the editor of Süddeutsche Zeitung wrote an open letter directly to Tim Cook addressing this issue.