Tim Cook Prunes Apple's Tree
Tim Cook made some clear and direct statements in his management shakeup at Apple this week, sending the message that nothing less than the highest standards will be tolerated. The ouster of the head of iOS and the retail store chief paved the way for a reorganization of departments and responsibilities aimed at improving collaboration at Apple.
10/31/12 5:00 AM PT
Apple CEO Tim Cook announced an overhaul of his executive team this week, including the departure of iOS head Scott Forstall and retail chief John Browett and additional shifting of top managers.
Forstall ran the software team responsible for creating iOS 6, the latest software for the iPhone and iPad that included the highly criticized Maps app. With the iOS 6 launch, Apple ditched Google Maps and took its mapping technology in-house for the first time, but the move wasn't a smooth one. The Maps app took a beating from users who found its data incomplete and its directions inaccurate.
Forstall will leave the company next year, but stay on as an advisor in the interim, Cook announced.
Forstall reportedly refused to take the blame for the Maps debacle, declining to sign a public apology from the company for the shortfalls. Cook signed the apology instead, urging customers to turn to other maps apps until Apple could provide a more complete product.
While it may be the reason he's out at Apple, Forstall may have been right in not taking the total blame for the maps failure, said Shaw Wu, analyst at Sterne Agee.
"We believe the less-than-stellar maps rollout may have triggered this," Wu told MacNewsWorld. "It is an ambitious effort replacing Google Maps and bringing new functionality including turn-by-turn navigation and 3G photo-realistic rendering. We find it unfortunate that Scott Forstall may be taking the fall for this. We have high confidence that the Maps app is fixable as it is software and will get better over time as more data is collected. People forget that Google Maps started out inferior to Yahoo Maps and Mapquest."
New Look for Retail
Browett, Apple's retail head, is also out at the company just ten months after taking over. The fact that he had such a short run shows Cook had to take action, said Jerry W. Sheldon, retail analyst at IHL Consulting Group.
"John Browett's premature departure from Apple is quite surprising, especially after being employed less than ten months," he told MacNewsWorld. "For Tim Cook, I think this sends a big message. It says that he is willing to admit that he made a bad hire in Browett. Additionally it says that Tim realizes the Apple Retail store is one of the crown jewels of Apple, if you will, and will not allow that to be jeopardized."
Apple's retail operation presented challenges Browett wasn't prepared to face, said Sheldon.
"With a work history at Tesco and Dixon's, Browett had a history of driving profitability by squeezing efficiency and cost out of the store. This is a model that aligns itself well with being a low-cost leader, but the problem is, that is not Apple's model. They clearly drive a unique store experience and work to achieve that with a very high degree of customer service and employee satisfaction," he pointed out.
To improve on the retail model with a new leader, Apple needs a new player who understands the company's overall vision and how it integrates with its stores, said Sheldon.
"For what Tim wants to improve on in the store, certainly profitability, but it appears with this move that he sees improved store profitability as more about increasing income than decreasing costs," Sheldon observed. "Apple will continue their aggressive international expansion, which will help improve the income piece of things. I think we probably saw a bit of that income philosophy in the new iPad mini, as it was priced at such a premium that it made Wall Street balk as well as a very large number of Apple faithful."
Focus on Restructure
Apple highlighted the shifting of duties among executives rather than the news that some team members were getting the ax. As part of the restructuring, different team members will take on new roles in a move that will increase collaboration, according to Apple.
Eddy Cue, who currently runs the iTunes division at Apple will take over Maps and Siri, the company's mobile voice assistant, which combines the company's online services into one division. Design chief Jony Ive will also have a new role as head of "human interface" in addition to his current duties.
Bob Mansfield, currently in charge of the hardware engineering team, reportedly will head a new division called "Technologies." The new group will include all of Apple's wireless and semiconductor teams in a single organization designed to better foster innovation. Mansfield had previously said he would retire this year, but will stay on for two years.
Apple will also put iOS and OS X under the same umbrella with Craig Federighi's leadership. The merging of certain core areas of business - especially its mobile and desktop operating systems -- makes sense as Apple continues to expand its product offerings across industries, said Wu.
"This makes sense with the common code base and likely longer-term blurring of the two operating systems," Wu observed.
Apple did not respond to our request for further details.