Apple CEO Tim Cook to Step Down After 15 Years, Despite $4.5 Trillion Market Cap, as China Dependence and AI Lag Loom

[Financial News]  

Tim Cook, CEO of Apple Inc., will hand the reins to John Ternus on the 1st local time and step away from the front lines of management. After taking office in 2011 and leading Apple for 15 years, he will retire from active management and become chairman.
Cook, who succeeded legendary founder Steve Jobs, helped put Apple on a solid footing by refining its supply chain. But he also left behind a growing dependence on China.

Gene Munster, managing director at Deepwater Asset Management, told the Financial Times on the 31st of last month that when Cook became CEO shortly after Jobs' death, he was "like a man stepping into shoes that could never be filled, but in the end he proved more than capable of filling them."
Since Cook succeeded Jobs, Apple shares have surged more than 2,000%, and the company has returned more than $1 trillion to shareholders through buybacks and dividends.
Apple's weight in the S&P 500 Index has more than doubled, rising from 3% to 7%. As Apple's influence grew, the center of gravity in the New York Stock Exchange also shifted toward smaller Big Tech names.
As of the 31st of last month, Apple's market capitalization stood at $4.57 trillion. Its direct workforce has grown from about 60,000 to 166,000, and it now operates 535 stores across 27 countries and regions.

However, when U.S. President Donald Trump announced global tariffs in April last year, Apple lost $638 billion in market value in just three days. It was the largest drop ever recorded for a U.S. company.
Although the company later recovered its market value, the episode clearly showed how deeply Apple had become dependent on China as Cook refined its supply chain.
Munster pointed to Apple's vast supply chain in China and said, "Cook has acted less like the CEO of one company and more like the CEO of a country."
Until Apple stopped publishing its supplier list in 2024, available data showed that 90% of its suppliers were based in China or Taiwan, or were linked to them.
Cook also left a blemish by yielding to political pressure from China. Apple removed international news apps from the China App Store.

According to IDC, Apple has shipped 3.1 billion iPhones since Cook took over. Laid end to end, they would stretch from Earth to the Moon.
Although Apple has pursued diversification, the iPhone still accounts for about half of the company's total revenue.
Since 2011, Apple's core lineup has still centered on the iPhone, Mac computers, and the iPad tablet, but five product categories have been added.
The iPod MP3 player disappeared, but Cook added the Apple Watch and wireless earbuds AirPods to drive popularity. The HomePod smart speaker and the mixed-reality headset Apple Vision Pro are aimed at niche markets. The Apple Car project was canceled in 2024.
Above all, Cook's legacy includes in-house chip design. Instead of relying on chips supplied by third parties such as Intel, Apple designed its own chips and boosted margins. Its margin rate has risen from about 40% in 2011 to nearly 50% now.

Cook also added services as one of Apple's key business pillars.
Using Apple hardware users as a base, he grew the services segment, including Apple Pay, iCloud, the App Store, and Apple Music. The number of users for these services now reaches 1.5 billion.
But the success of the services business led Apple to choose the safe path, and it fell behind in the artificial intelligence race. In 2024, Apple stumbled with the launch of Apple Intelligence. Since then, it has lagged in the Big Tech race to develop AI models and build data centers, both of which require massive investment. Apple is relying on OpenAI, and more recently Google, to fill its AI development gap.
Meanwhile, Cook received a total of $880 million over the past 15 years in salary, stock options, and cash bonuses. He owns just 0.02% of Apple shares.
According to Forbes, his net worth is estimated at about $3 billion.
[email protected] Song Kyung-jae Reporter