It seems impossible that Tim Cook’s legacy as Apple’s spectacularly successful CEO could be in jeopardy. But in recent months, and especially in recent days, the impossible has become at least conceivable.
The latest tremors came when Apple announced chief operating officer Jeff Williams would retire by yearend after 27 years. Just a day before, the company’s top AI executive, Ruoming Pang, had left to join Meta, and weeks earlier, another high-level AI researcher, Tom Gunter, had also left. The image of a leadership exodus was forming.
More broadly, Apple stock is down 7.2% over the past year, while the S&P is up 6.5% and the Nasdaq is up 12.9%.
Those events brought some of Apple’s most worrisome weaknesses into the forefront. Above all: an apparent serious lag behind competitors incorporating AI into products and services. Last year, with Hollywood fanfare, the company introduced Apple Intelligence, a version of AI that only Apple, creator of the world’s most user-friendly products and services, could possibly create. But it isn’t working out that way. Playing down Apple Intelligence so far, the company has a partnership with OpenAI for some chores performed by Apple’s virtual assistant, Siri, and it has reportedly considered a partnership with Anthropic and partnering with or buying Perplexity AI.
For a company of Apple’s scale and stature, lagging behind its major competitors on AI is like lagging behind the competition on the internet in 2000. AI is a general-purpose technology, and those things don’t come along very often. The internet was one. So were digital computing and electricity. They change the world, and they revolutionize the business landscape for every company.
With that in mind, it becomes clear how Tim Cook could be one of the all-time greatest CEOs from 2011 to now yet might not be optimal for the AI era.
As background, remember just how staggeringly successful Apple has been under Cook. When Steve Jobs made him CEO, the company was worth about $300 billion. Now it’s worth $3.2 trillion—a remarkable compound annual growth rate of 18.4% over 14 years. Few people realize that Cook has created far more shareholder wealth than Jobs did.
But now look closer. Craig Moffett, a founder of the MoffettNathanson research firm, is one of the extremely few Wall Street analysts who have a Sell recommendation on Apple stock. He is also a Cook admirer. “By any normal metrics he has had a wildly, wildly successful tenure,” Moffett says. But then he examines how that success has been achieved. “They haven’t produced a major new product outside of possibly the earbuds in a decade,” he says. “Apple has done far more to innovate process than it has product over Tim Cook’s tenure.”
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