By Chand Bellur
August 11, 2020 at 6:44 p.m. PT
- Tim Cook took over as CEO of Apple nine years ago, following the untimely death of Steve Jobs.
- Although Tim Cook only has a 0.02% stake in the company, his net worth is now approaching $2 billion.
- Cook managed to grow Apple’s profitability; however, he has yet to create a new, flagship product to replace the iPhone.
Tim Cook Joins the Billionaire Club
In a world where most people are in debt, even being a millionaire is a dream for most. Few can fathom what it would be like to become a billionaire. Fortunately, for Tim Cook, his day has arrived.
Following a degree from Auburn in industrial engineering, Cook went on to earn his MBA at Duke. After college, he embarked on a long career in technology, working at IBM and Compaq, before Steve Jobs wooed him away to Apple.
Tim’s first task at Apple, as SVP of worldwide operations, was to improve the supply chain. Cook shut down factories and warehouses, instead relying on contracted manufacturers for Apple’s parts. The strategy was so successful that Apple could deny competitors like HP the best mobile components. With the highest number of orders in the industry, Apple can get the best parts, while competitors have to either wait or find alternatives.
Cook’s success with Apple’s supply chain earned him a promotion to operations lead. From there, he became Apple’s acting CEO when Steve Jobs was on medical leave. After Jobs’ death, Tim Cook officially became CEO of Apple. During his tenure, he managed to double Apple’s revenue and increase its market value by more than fivefold.
The recent rally in Apple stock propelled Cook well beyond the billionaire barrier. Based on the number of shares he owns and their value, Cook’s net worth is close to $2 billion.
Cook Not as Wealthy as Other Tech Billionaires
The Silicon Valley is home to a formidable cadre of billionaires. Some worked harder than others to attain their fortune. For some, like Zuckerberg and Dorsey, their low hanging fruit and superficial charm emerged at the right time. It was more luck and random opportunity than skill. Nonetheless, these are some of the world’s wealthiest techies, even though they’re not actually talented coders. The best musicians in the world don’t make the most money either.
Tim Cook’s marginal billionaire status came from hard work. He wasn’t an Apple founder, and doesn’t earn the equity of one. That said, his accomplishments make billionaires like Mark Zuckerberg and Jack Dorsey seem lazy.
Tim Cook is one of the most educated, experienced, and hard-working leaders in the Valley. None of these qualities ensure obscene amounts of wealth. With only a 0.02% share in the company, it will be difficult for Cook to measure up to billionaires who founded their own enterprises.
Tim Cook Needs a New Breakthrough Product
iPhone sales are in decline. Apple’s strategy to offset these losses with wearables and services seems to work; however, the company can repatriate overseas profits to construct favorable quarterly reports.
Bloomberg recently cast doubt on Apple’s services strategy, revealing that outside of the App Store and its exclusive deal with Google, it makes very little from services. This casts some doubt on Apple’s latest quarterly reports showing that services have more than replaced declining iPhone revenues.
The creative accounting strategy can keep Apple stock aloft for years, but the Cupertino company needs a new, breakthrough product to stay on top.
Rumors suggest Apple may launch an augmented or virtual reality headset in the coming years. Others have attempted to sell high tech eyeglasses; however, the reception has been weak.
Perhaps Apple may have similar success with AR glasses as they do with other wearables. Both AirPods and the Apple Watch are remarkably successful, beating competitors by massive margins. Perhaps instead of replacing the iPhone with one flagship product, Apple can create a whole collection of popular, must-have devices. In conjunction with revenues from subscription services, this could keep Apple on top for years to come.