Artificial intelligence continues to strongly drive the US economy, which grew at a robust rate of 2% in the first quarter. AI also explains the sustained rise, despite the war, of the New York Stock Exchange, whose main indexes closed April with the best results in six years. The good figures presented by Alphabet (Google’s parent company) and machinery manufacturer Caterpillar (also driven by AI, which demands its power generation equipment) catapulted Wall Street quotes on Thursday. The Standard & Poors closed the month with a 10% climb, while the tech-heavy Nasdaq rose 15%.
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The company synonymous with innovation created by Steve Jobs falls behind in the great technological shift of AI
Where does Apple stand in this AI technological revolution that can do it all? The company created by Steve Jobs is clearly behind in the new AI technology race, a problem that has become the main challenge for the new CEO, John Ternus, who will take the reins replacing Tim Cook in September. The group has just published exceptional results that exceed Wall Street expectations: first-quarter revenues grew 17%, reaching $111.2 billion. Its forecasts point to similar growth from April to June, driven by “extraordinary demand,” in Cook’s words, for the iPhone 17, which has become the most popular model in its history. iPhone sales generated $57 billion through March, representing a 20% increase, largely thanks to China, where sales reached $20.5 billion. Still, Apple’s stock price has not taken off this year amid doubts about its AI strategy. So far, Apple has stayed on the sidelines of the costly AI race entered by the rest of the Big Tech companies and has preferred to rely on external models. In January, it closed a deal to use Google’s models and is expected to present a new AI-powered Siri in June after many delays.
After Jobs
With Tim Cook at the helm, Apple has experienced spectacular growth but has become a more conservative company, focused on making money
But we are in the era of AI, and Apple is clearly behind its competitors. Where is the company that always led technological change? Where is the soul of Apple? Steve Jobs created a company that was a space of innovation and imagination. In a decade, he changed the world by surprising it again and again with the iMac, the iPod, and the iPhone, the start of the smartphone revolution. Jobs infused Apple with a soul that fused technology and creativity, allowing him to anticipate what people wanted. That soul and Jobs’s own mystique were in all its products, so the creator’s death seemed to endanger the company’s future.
The reality has been very different: with Tim Cook at the helm, Apple has experienced spectacular growth, reaching a market value of $4 trillion. But it has become a very different company, more conservative, focused on making as much money as possible with the products Jobs helped create. This is the thesis of the book “After Steve Jobs: How Apple became a trillion dollar company and lost its soul,” by Tripp Mickle, who nevertheless values Cook’s work in rethinking the company after Jobs’s loss. Cook had to find a way to move forward without the figure around whom the entire company revolved. And he did so by creating a more democratic company, where a group of executives makes decisions, as opposed to the more autocratic organization of the Jobs era.
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The succession
Ternus could bring back a greater spirit of innovation to the company while keeping the business on the rise
Betting on China was one of Tim Cook’s great successes. In 2013, he convinced the Chinese government to allow the sale of iPhones in the country and obtained permission to incorporate the device into China Mobile’s network, the country’s largest operator with 750 million customers. Cook has navigated the treacherous waters of geopolitics very well and has successfully managed the difficult relationship between the US and China without being harmed. He has been skillful in diplomacy with Beijing while maintaining good relations with Washington, including with Donald Trump. And in 2017-18, he sought new ways to generate business as iPhone sales slowed down.
Now comes the time for John Ternus, who appears as a hybrid personality between Jobs and Cook and could bring back a greater spirit of innovation to the company while keeping the business on the rise. The transition has been carefully prepared and will coincide in September with the launch of the new foldable iPhone. Awaiting Ternus, the company’s dilemma is well summarized by Mickle: “If you ask those who worked with Jobs what Apple would be like if he were still in charge, they all say much more interesting, but by no means as rich.”
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