Inside Apple

by Adam Lashinsky

  There are things Apple can do to carry on, but this would require the company that revolutionized the computer, the smartphone, and the MP3 player to be willing to revolutionize itself. Change will not come easily to one of the world’s most valuable companies. If Apple’s presumably incredible pipeline of products is the company’s tailwind, “If it ain’t broke, don’t fix it” will be a headwind that could turn treacherous in the years ahead.

  Its executives must learn not to ask the question “What would Steve do?” and instead just do what they think is best. In fact, Tim Cook said at an employee celebration of Jobs’s life that Jobs’s parting advice to Cook was “to never ask what he would do; just do what’s right.” If Cook doesn’t intend to be the final word on matters of taste or software architecture, then he’ll have to designate who will be. Otherwise Apple will devolve into the fractious company that Steve Jobs never allowed it to be. If Apple can truly continue to behave like a start-up, then it will need to become less arrogant and bullying and more paranoid and respectful. Otherwise, it will inevitably become more like Microsoft, which too often resembles the snow leopard Jobs rejected for the packaging of Apple’s software: fat and lazy.

  Apple held multiple tributes for Steve Jobs in the weeks after his death. Apple.com featured the iconic Albert Watson photo of Jobs, originally shot for a 2006 spread in Fortune, as the sole image on its home page. His penetrating gaze stared into the camera as he gently tugged at his graying beard. Just four Apple employees attended his funeral at Alta Mesa Memorial Park in Palo Alto on October 7, 2011: Tim Cook, Jony Ive, Eddy Cue, and Katie Cotton. Pixar’s Ed Catmull, Disney’s Bob Iger, longtime friends Larry Brilliant and Bill Campbell, and former Intel CEO Andy Grove also attended. Jobs’s family held a private event for him at Stanford University on October 16, attended by luminaries from Bono to Al Gore to Bill Clinton as well as top Apple executives and alumni. On October 19, Apple hosted an employee celebration at 1 Infinite Loop. Coldplay and Norah Jones sang—gratis. The company beamed a telecast to employees of its US retail stores.

  When Tim Cook opened Apple’s quarterly earnings call with investors on October 18, less than two weeks after Jobs’s death, he began with a statement. “The world has lost a visionary, a creative genius and an amazing human being,” Cook said. “Steve was a great leader and mentor and inspired everyone at Apple to do extraordinary things. His spirit will forever be the foundation of Apple, and we are dedicated to continuing the amazing work that he loved so much.” Cook thanked everyone who offered their condolences, and then got down to the nitty-gritty business of Apple’s financial results.

  It was in his response to the most mundane of questions that Cook symbolically revealed what kind of steward he might be for the company Steve Jobs first created and then saved. On every financial call with Apple in recent years, investors have asked if Apple will consider returning some of its cash to shareholders, potentially in the form of a dividend. It was like a bad running joke: Investors seriously wanted a dividend, but it wasn’t as if they were going to sell the stock if they didn’t get one. On this call, the dividend question came right on cue, and this time, Cook had a different answer. “I’m not religious about holding cash or not holding it,” he said. “I’m religious about a lot of things but not that one. And so we will continually ask ourselves what’s in Apple’s best interest and always do what we believe is in Apple’s best interest.” Cook didn’t elaborate on the subjects on which he remains religious. But Apple isn’t a religion. It’s just a fine company with an unrivaled track record, a strong set of values, and a culture of excellence.

  I wrote earlier in this chapter that common sense suggests Apple ultimately can’t cope with the loss of Steve Jobs. That’s true. Apple very likely will stop being an “insanely great” company. This will happen gradually, perhaps imperceptibly. A product will fail to delight. A member of the senior management team will depart, and then another. It will confront a host of problems, not the least of which will be the scrutiny of a world that obsessively watches its efforts to continue its string of success. Apple once was able to distract the public with arresting advertising and well-timed product releases, while behind the scenes it worked its magic. Now the curtain has been pulled back a little, and we see that real men and women are working furiously to keep things in motion. Customers so thoroughly anticipate new Apple offerings that despite Apple’s ability to keep the details of its releases secret the anticipation puts little dents in sales anyway.

  Yet forecasting Apple’s fall from otherworldly status is beside the point. Apple failed plenty of times before, including during the second reign of Steve Jobs. If Apple TV was just a “hobby,” as Jobs called it, then why was Apple, the great focuser of corporate energy, working on it in the first place? Did MobileMe or a faulty antenna on the iPhone 4 represent an Apple in decline? Not really. Was it a failure when Apple lost stars like Tony Fadell, Avie Tevanian, and Ron Johnson? Sure, but the business of the company continued. Companies, like people, aren’t perfect. Apple in the last fourteen years of Steve Jobs’s life was far better than most, but it wasn’t perfect. Jobs was just particularly good at getting us to focus on the good and ignore the bad.

  An Apple that is merely great, rather than insanely great, will be a disappointment, but only to the loyalists who demanded more from Apple all along. For the rest of us, our expectations of Apple were always lower. We’ll keep buying merely great products for a long time.

  It has been said of Apple that it is so different in the way it goes about the business of doing business that it’s like a bumble bee: It shouldn’t fly, but it does. Going forward, Apple will continue to fly. The explanation of how it does so, however, already is becoming just a little less mysterious.

  ACKNOWLEDGMENTS

  I am privileged to work at Fortune magazine, with some of the best, most intelligent, most dedicated, and kindest business journalists on the planet. Time Inc. editor in chief John Huey, a rabid Apple fan and a journalist who loves to tell—and hear—a good tale, blessed this book and encouraged me to write it. Andy Serwer, Fortune’s editor (aka my boss), dreamed up and assigned me to write the original article that grew into this book. He also graciously granted me a leave to write it. Among his many other fine attributes, Andy is an insightful editor and an inspiring and thoughtful leader. I am proud to write for a magazine he edits. Stephanie Mehta edited my original article with a cool hand and a careful eye. Like an Apple executive described in this book, she is unflappable, and I am grateful for her guidance and friendship. I wouldn’t be where I am today as a journalist without the support and guidance of many other current and former Fortune colleagues, including, but not limited to, Rik Kirkland, Rick Tetzeli, Eric Pooley, Hank Gilman, Jim Aley, Nick Varchaver, Brian O’Keefe, Daniel Roth, Jeffrey O’Brien, Miguel Helft, Jessi Hempel, Leigh Gallagher, Jennifer Rein-gold, Mia Diehl, and Armin Harris.

  Doris Burke is one of the finest research sleuths in the land. I couldn’t have written this book—or virtually anything else I’ve published over the past five years—without her cheerful, meticulous, and keen assistance. Richard Nieva joined this project near its completion and quickly provided enthusiastic and critical research.

  At Apple, Katie Cotton and Steve Dowling treated me cordially and consistently, and over the course of 2011 answered as many of my questions as they could. I appreciate and respect their professionalism.

  A handful of books were especially helpful to me in understanding either Apple’s history or the nature of Apple’s leadership. These include Michael Maccoby’s Narcissistic Leaders: Who Succeeds and Who Fails; Return to the Little Kingdom: How Apple and Steve Jobs Changed the World by Michael Moritz; David Price’s The Pixar Touch: The Making of a Company; and Alan Deutschman’s The Second Coming of Steve Jobs.

  Every author should be blessed to have an agent like Esmond Harmsworth and an editor like John Brodie. Esmond first introduced himself to me after I published a cover story on Google in 2006. He wonder
ed if I’d like to write a book about Google. I never got around to writing that book, but I was inspired by his infectious enthusiasm, and I often said that one day I’d write a book, if for no other reason than to please Esmond. His sage counsel on this project has been invaluable.

  John Brodie was my colleague at Fortune for too few years. He single-handedly creates a witty, literate, and exuberant force field around him, making him a joy to work with. He is everything an editor should be: He cracked the whip yet lavished praise. He offered suggestions but left the decisions up to me. He encouraged and cheered me on at every turn. I am fully mindful of his immense contributions to this book, for which I am grateful. John’s contributions notwithstanding, I take full responsibility for every last word that appears on these pages.

  Friends and family members of authors aren’t sure which is worse: the lack of attention they get from writers immersed in a book project or the dirty looks they receive in response to well-meaning queries about one’s progress. I’m thankful to so many friends who nurtured, encouraged, and amused me before and during the writing of this book. These include Chuck Coustan, Jamie Dubey, Michael Newman, David Richter, Dave Kansas, Daniel Gross, Scott Thurm, Bill Campbell, Quincy Smith, Jennifer Newton, John Needham, Drew and Stephanie Hess, Pam Baker and Doug Friedman, and Oliver Fringer and Krista Donaldson.

  My sisters, Paula and Amy Lashinsky, provided just the right balance of inquisitiveness, pride in their baby brother, and respect for the shortness of my time. My father, Bernard Lashinsky, has always been my most careful reader, my most ardent supporter, and my role model in life. He taught me at a young age that there is no higher compliment you can pay than to call someone a mensch. Dad, you are an über-mensch, and I love you.

  This book is dedicated to three generations of females in my life. My mother, Marcia Morris Lashinsky, imbued in me her love of words, her reverence for books, and her unconditional love. She would have lusted after an iPad, and I would have cherished her feedback on this book. Instead, I cherish and honor her memory. My wife, Ruth Kirschner, is my partner and sounding board. We lovingly juggle two careers—making me even more appreciative of her understanding the time I needed to squirrel away in order to finish this book—while finding time to have a ton of fun. Lastly, because she is the newest addition to my family, is my five-year-old daughter, Leah Lashinsky, to whom I have been reading books practically since she was born. She reminds me every day what is most important in life.

  AUTHOR’S NOTE

  Because Apple operates differently from every other company, revealing its secrets is a tricky affair. Secrecy is a central facet of life there. Apple declined to make any of its executives or other employees available for interviews. Many former employees at Apple, from all levels of the company, as well as various people who work with Apple, did agree to speak to me for this book. None, as far as I know, received permission from the company to do so. Many spoke on the record, and their names appear here. Others agreed to help me but chose to remain unnamed. The overwhelming majority of the ex–Apple employees I interviewed professed affection for the company and a desire to see it portrayed well, knowing full well that Apple prefers that it not be portrayed at all. In an industry where everyone holds out hope of someday working with or for Apple, retribution is a legitimate concern. Strangely, at least for someone who is not as steeped in Apple-ania as I am, some ex-employees as well as current and former partners were as reluctant to be quoted speaking positively about Apple as they were to be identified criticizing Apple.

  Wherever possible, I have attempted to attribute quotations or to otherwise describe in some way the characteristics or bona fides of everyone I quote. In the instances where I have quoted Steve Jobs and Tim Cook directly, without further explanation, I have first- or secondhand knowledge of their comments. Though I communicated with both Jobs and Cook during the reporting for this book, neither granted me a formal interview, either for the book or for the original article that appeared in Fortune.

  ABOUT THE AUTHOR

  Adam Lashinsky covers Silicon Valley and Wall Street for Fortune magazine, where he has been on staff since 2001. Based in San Francisco, he has written cover stories for the magazine on Apple, Hewlett-Packard, and Google, as well as in-depth articles on Wells Fargo, Intel, Oracle, eBay, Twitter, and the venture-capital industry.

  In addition to working as Fortune’s senior editor at large, he is a weekly panelist on the Fox News Channel’s Cavuto on Business program on Saturday mornings. He also co-chairs Fortune’s annual technology conference, Fortune Brainstorm Tech, and is a seasoned speaker and panel moderator.

  Prior to joining Fortune, Lashinsky was a columnist for the San Jose Mercury News and TheStreet.com. A native of Chicago, Lashinsky earned a degree in history and political science from the University of Illinois in 1989. He lives in San Francisco with his wife and daughter. Inside Apple: The Secrets Behind the Past and Future Success of Steve Jobs’s Iconic Brand is his first book.

  You can follow Lashinsky on Twitter at @adamlashinsky.