Apple’s 11-person executive team that remained largely unchanged for five years has been reshuffled as the company put some projects on hold and reorganized engineers with a focus on services. Yes, Apple is readying for life after iPhone whose sales plateaued a few years ago.
The Cupertino firm is understood to be redirecting much of the engineering resources in its services business, into “efforts around Hollywood programming,” according to sources.
The company’s Services segment is expected to top a whopping $50 billion in sales by fiscal 2020 and contribute more than about 60 percent of its total revenue growth over five years. As a matter of fact, 85 percent of growth during the prior five years was fueled by the phenomenal iPhone business, which still contributes about two-thirds of Apple sales.
Loup Ventures analyst Gene Munster:
This is a sign that the company is trying to get the formula right for the next decade. Technology is evolving and they need to continue to tweak their structure to be sure they’re on the right curve.
Tripp Mickle, writing for The Wall Street Journal today:
The changes, which can be traced back to last year, have included high-profile hires, noteworthy departures, meaningful promotions and consequential restructurings.
They have rattled rank-and-file employees unaccustomed to frequent leadership changes and led Apple to put several projects on hold while new managers are given a chance to reassess priorities, according to people familiar with the matter.
Here of some of Apple’s recent leadership moves
- John Giannandrea: Shortly after hiring Giannandrea away from Google to run its artificial intelligence efforts, Apple in 2017 elevated him to the executive team.
- Angela Ahrendts: Hired five years ago to lead Apple Retail, Angela will be departing in April to be replaced with HR head Deirdre O’Brien in her new Retail + People role.
- Bill Stasior: Former iOS head Scott Forstall hired him from Amazon before he himself got fired in 2012. In addition to Siri, Stasior was tasked with leading the Search team. He was let go a few weeks ago. His boss Giannandrea has assumed that responsibility now and is looking to improve Siri’s accuracy and performance.
- Project Titan: The autonomous driving project recently saw its own reshuffling as 200 staffers were either trimmed or moved to other projects within the company recently.
The write-up reminds us that Tim Cook has been anticipating the maturation of the smartphone industry since as early as 2010 and planning for how to grow as phone sales slow. According to the report, the primary reasons for the shifts vary by division but the common theme seems to be finding new avenues of growth given the current iPhone situation.
From the report:
The changes, along with Apple’s recent sales woes, have become conversation fodder for current and ex-Apple employees, partly because they are among the most pronounced since Tim Cook’s early years as chief executive.
Retail chief Ron Johnson left shortly before Mr. Cook took over in 2011 and mobile software executive Scott Forstall was dismissed a year later. Their departures led to the hiring of Ms. Ahrendts, the elevation of Craig Federighi to the top software job and Mr. Cue’s assumption of responsibility for several services, creating an 11-person executive team that remained largely unchanged for five years.
I know I wouldn’t want to be standing in Tim Cook’s shoes right now.
What else could and should Apple be doing to diversify beyond the iPhone line, do you think? Don’t be shy, chime in with your thoughts and observations in the commenting section.