How Apple Became a Trillion-Dollar Company – Tripp Mickle
How Apple Became a Trillion-Dollar Company – Tripp Mickle
As the CEO of Apple, Tim Cook brought the company’s valuation to $2 trillion. He’s a master of maximizing margins, global expansion, and forging alliances. But Apple may have lost its soul as a result. New York Times reporter Tripp Mickle sits down with host Charles Mizrahi to discuss how Steve Jobs’ death shifted the company and why it’s no longer a major innovator.
- An Introduction to Tripp Mickle (00:00:00)
- Jony Ive’s Visionary Mind (00:02:00)
- Steve Jobs’ Spiritual Partner (00:13:25)
- Revolutionary Innovation (00:21:49)
- Tim Cook’s Business Mind (00:31:22)
- After Jobs’ Death (00:39:43)
- The New Age of Apple (00:49:42)
Tripp Mickle is an author and reporter at the New York Times, where he covers Apple. Mickle previously worked at The Wall Street Journal reporting on technology, alcohol, and tobacco companies. He’s also worked as a sportswriter at Sports Business Journal and Newsday. His debut book (below) covers Apple’s transformation after Steve Jobs’ passing.
Before You Leave:
TRIPP MICKLE: And of course, he goes on to Apple and since becoming CEO, they’ve increased their value by $2 trillion which is just remarkable. You haven’t seen a CEO succession story like that anywhere else in business history.
CHARLES MIZRAHI: My guest today is Tripp Mickle. Tripp led The Wall Street Journal’s coverage of Apple and Google. And now he’s a reporter at the New York Times covering Apple. He’s the author of After Steve: How Apple Became a Trillion-Dollar Company and Lost Its Soul. It’s the inside story of the unspoken power struggle between Tim Cook and head designer Jony Ive after the death of Steve Jobs. I recently sat down with Tripp and we talked about how Jony Ive’s departure in 2019 marked the culmination in Apple’s shift from a company of innovation to one of operational excellence and how that shift cost Apple its soul.
CHARLES MIZRAHI: Tripp, thanks so much for coming on the show. I greatly appreciate it. And since we spoke last week and had a great conversation, I really enjoyed your book. Really well done.
TRIPP MICKLE: Thanks so much. Appreciate you having me.
CHARLES MIZRAHI: The name of the book, folks, is After Steve: How Apple Became a Trillion-Dollar Company and Lost Its Soul. The cover is really very cool. That’s a cool shot. I never saw that shot. It shows a picture of Tim Cook and Jony Ive, they’re staring up. Where’d you get this picture from?
TRIPP MICKLE: We found it in the archives. It was a photograph, obviously I can only surmise, taken from below the two of them as they were looking skyward. And it works out really well because you’ve got “After Steve” above them and those are really the three primary figures in the book — Tim Cook and Jony Ive. And then the third, unspoken one not on the page is Steve Jobs himself. He’s kind of a ghostly figure that is just in the background in perpetuity at Apple because he built the empire that they all inhabit now.
CHARLES MIZRAHI: Right. Okay. So I want to tell you right off the bat, I really like the book because it told a story that I didn’t know from the inside about products that I use daily, how the products came into existence, and then it gave us a look at the struggle — or as you write here — Apple’s soul, after Steve Jobs died between Tim Cook — who was the numbers man, straight, totally different than what Steve Jobs was. And then on the other hand, you have Jony Ive, the brilliant. And you have so many great stories in here what kind of brilliant designer — I think designers too limiting a word — of a visionary.
CHARLES MIZRAHI: And, you know, by the way, when I was reading your book throughout the last week or so, and I took one of the Apple products — you mention, for example, on the iPhone, the icons, and how you described how Jony Ive wanted them at a certain shape to look not boxy, but to be rounded. And then I looked at the Apple Watch and the MacBook, all of these things that you just take for granted as to what makes them so beautiful. You detail in the book how Jony Ive thought these up and was relentless in getting these materials made perfectly to an extent that is superhuman.
TRIPP MICKLE: Yeah. It’s called a Bezier curve. And he was, as he was wont to do, a natural obsessive about that. And it has more points in a Bezier curve than you would in a typical curve, which, I don’t know, might have three or four points to make a rounded curve. One of the nits that he had after designing the iPhone was that the app icons on the iPhone themselves didn’t have the same Bezier curves as the iPhone’s physical curvature had. And he constantly had to have been looking phones and looking at the icon and finding frustration and the disconnect between what those apps look like, you know, the software on the phone and what the hardware, the physical aspect, of what the curve looked like.
CHARLES MIZRAHI: It’s just absolutely amazing detail, but we’re jumping way ahead. So, first of all, why did you write this book? What made you write this book?
TRIPP MICKLE: Well, I was covering alcohol and tobacco for The Wall Street Journal in Atlanta, of all things. And before that, I was a sportswriter, so I didn’t gravitate to tech naturally. I was asked to move out to Silicon Valley from Atlanta and take over coverage of Apple for The Wall Street Journal. And after landing, and being pretty confused about the company and what I was covering, I met with a long time Silicon Valley reporter who appreciated some of my frustrations about covering Apple — it’s a very secretive company — and was kind enough to point me in the direction of a possible story.
TRIPP MICKLE: He said if I were you, I would look into Jony Ive and this place called the battery and I began to ask questions about that. And over the course of several years, I learned that Jony Ive had grown disillusioned inside the company that he’d helped build and rescue from bankruptcy. And I just thought that was interesting. I was wondering why somebody who clearly loved a company so much would fall out of love with that same company over a period of time. And that was the real genesis and kernel of what gave this idea of life.
CHARLES MIZRAHI: Okay. So my family well, my sons really, they have been Apple fanatics. My second youngest son, Jeffrey, has been an Apple follower, gosh, I think since he was ten years old. So he followed everything. And we were one of the first people to get, in 2006 I think, my son’s waited in line to get the first iPhone. They watched the keynotes. The house goes silent. They’re watching the keynote, there’s question and answer, back and forth critique. These guys bleed apple. They love Apple. And so I’ve heard Jony Ive and his brilliance in my house since I think 2005 or even earlier. Tell our listeners who this guy is. Why is he so important? And the brilliance and genius of how he really put Apple … He took the vision that Jobs had and put them into products that are just absolutely magnificent.
TRIPP MICKLE: Right. He’s a British born industrial designer who was fortunate enough to be born into a family with a father who taught industrial design. Which is really remarkable, if you think about it. It was almost like he was put on this earth to do exactly what he went on to do. And he landed at Apple in the early nineties and became the head of Apple’s design shortly before Steve Jobs arrived to take it over.
CHARLES MIZRAHI: Let me just interrupt you a second for the back story here. This guy is a prodigy from day one, right? He’s not just a designer. Could you just share with us what he was doing in his undergraduate work or even when he was high school, the reverence that his teachers used to have for him?
TRIPP MICKLE: It was fascinating to go back and visit both his high school and his undergrad, where he went to school in Newcastle. His high school teacher told me that his work was so good and so polished that he didn’t think that Jony Ive himself was doing it. He thought his father was doing the work. And he had to go and confront his father and ask him and get clarity on the fact that Jony Ive was, in fact, doing the work. He just had a sophistication to what he was designing and an ambition that was rare as a young man. And that really took to life in college. There’s this wild scene where they — at the end of university at Newcastle Polytechnic, which is where he went to study design — they had to put up an array of three projects that they’d done, almost like a giant science project like your kid would do.
CHARLES MIZRAHI: It was trifold. I forgot those boards, what they were called, because my kids at every science project, these trifold boards, that they had to write out the whole thing with pictures and put them up in their booth.
TRIPP MICKLE: Right. And so he does his and one of the three projects which I find interesting was on money. It was it was called their Blue Sky project. You were supposed to dream up some futuristic thing that you would hope to change. And his was money. And he developed a pebble sized, polished piece of — like a medallion — that people could carry in their pocket. And the idea was you would put that on a reader when you went to check out at a store and it would immediately transact your charges, because he was frustrated that at the time plastic credit cards — which were becoming more popular — were so cheap and yet carried so much value. You could charge $1,000 on a credit card, but it was on this flimsy piece of plastic and the cashier would know what you had spent, but you wouldn’t get a notification of what you spent until a letter was dropped in the mail. So he wanted to circumvent that — this was one of his designs.
CHARLES MIZRAHI: Which becomes Apple Pay.
TRIPP MICKLE: Yeah, his teachers say to this day, they look back and they think, had he dreamed up Apple Pay in the late eighties — two decades plus before it was introduced to the world. But the person who came through to review his projects and weigh in on them turned to two of the professors at the school — his was an outside designer, a professional — and said: “Well, what’s the highest grade you can give somebody?” And they said: “Well, an 80.” And he said he was going to give Jony way higher score than that. It was the highest score anybody had ever received. So there was a real sense that he was a really gifted, talented designer.
CHARLES MIZRAHI: Tell us about the poster board, because that’s fascinating.
TRIPP MICKLE: Which poster board?
CHARLES MIZRAHI: The trifold, where everyone has all pictures and he just…
TRIPP MICKLE: Oh yeah. In contrast to his peers who had these well designed but somewhat cluttered tri-boards, his was very minimalist. And so he only had a handful of photographs and it was just very well laid out. So the take away in the eyes of the professors was he had not only thought through the projects themselves, but also how to illustrate those projects to the world. And that was just something he did throughout his life.
TRIPP MICKLE: There were years later where he did a project for Apple. He was at a design firm called Tangerine, and they wrapped up all the modeling that they had done to ship to Apple. And then he went the extra step to make sure that it was closed inside tissue paper with a tangerine logo on it. And then t shirts were placed on top of it, so that when you unboxed it, it was an experience. And of course, fast forward to today, if you unbox an iPhone, just the way it slides out of the box and how precisely those boxes are made so that there’s such tension in them. You really feel like you’re pulling out something of tremendous value. That’s really his imprint on that. And that’s something he did throughout his life. So you see flavors of his work in Apple that go all the way back to him as a young man when he was just leaving college.
CHARLES MIZRAHI: Okay. And by the way, the whole color white, you know, all of these things are thought out. I could believe the depth, but I never thought of all the subtleties of the colors and how they had meanings based on which shade of blue … You know, everything you look at with an iPhone — the color background, the color of the icons, the shape of the icons, the positioning of them. Should it be in a circle or should be it be rounded? We take all these for granted, but aesthetically, it’s so pleasing and beautiful that all of these were his design team coming up with this simplicity in terms of its function and in terms of its beauty — just unparalleled.
TRIPP MICKLE: Right. I think the turn of phrase I used was, it was no exaggeration to say that he redrew the world because his emphasis on minimalist design — which hearkens back to some other designers from the past — had such an imprint on us that we see it now everywhere. We take for granted just how sharply and limited the designs are around us in the world and how much those are influenced by Apple itself.
CHARLES MIZRAHI: Yeah, even the color of your headphones now — the white. And why white? You know, it’s absolutely amazing. So Jony Ive gets to work at Apple. Jobs is just amazed by this guy. And he calls him his brother. What term did he use?
TRIPP MICKLE: He called him his spiritual partner.
CHARLES MIZRAHI: Spiritual partner, yeah.
TRIPP MICKLE: Yeah. I mean, he was really a creative soulmate for Jobs. I mean, they spent a ton of time together. And they had an interesting and similar way of looking at the world. Jobs’ widow, Lorraine, recounted how they went on a walk in the garden once in the backyard, and came back and started sketching. And the next computer that they made looked like one of the flowers, in terms of the way it kind of came off a pedestal and then bent forward just like some of the flowers in the backyard. And it was totally inspired by the walk that they’d had.
CHARLES MIZRAHI: So now, when he’s in the company, he creates his own little fiefdom, if you will. Right? He creates a section of the company — about 20 guys who have security cards to this, access is granted to very, very few, into this inner sanctum. And it can be lost if you come in and say something or do something. And Jobs is in there every single day. Right?
TRIPP MICKLE: Right. It was where Jobs went to escape some of the pressures of running an ever-growing business. I mean, it was called by people on campus, “the holy of holies.” And it kind of had a different energy than other areas of the campus. Like other areas of the campus felt a little more pressured and intense. And this was a place where somewhat mellow electronic music played all the time. The designers moved around with kind of a relaxed demeanor. I mean, someone compared it to almost like a martial arts studio. There was just an intense focus, but also like a Zen-like calm to the space as well. And so Jobs enjoyed spending time there. He really did.
CHARLES MIZRAHI: Right. And I remember from the book, he basically said he was there almost on a daily basis and he had a reverence towards the products. They looked at them in awe and they would be like hallowed objects, right?
TRIPP MICKLE: Yeah. Yeah. And he had a quick eye himself. So, I mean, with Jobs, he could voice some frustration if some of the prototypes didn’t live up to his expectations or if he caught some differentiation. Once he was walking by and said something to the effect of: “What is that crap?” when he caught a glimpse of the curvature of an iPhone not living up to the design specifications that they had. And that was that was what he was able to bring to that space. I mean, he was really a great editor for Jony Ive — not quite on the scale of Maxwell Perkins and Thomas Wolfe, but the same type of thing. He was able to work with this person who had an immense amount of talent and bring product forward that bordered on artistic in terms of its sophistication.
CHARLES MIZRAHI: Right. And Jobs puts him really high up there in the company in terms of the hierarchy, because I think it was a flat structure the way he created their C-suite. Could you just talk about that?
TRIPP MICKLE: Yeah. Everything at Apple at the time Jobs was there really revolved around Jobs himself. He was — somebody compared it to a starfish, where he would just kind of crawl out from the center and do various work with people in software design or marketing and advertising — or in Jony’s case, industrial design. Industrial design, he said and told his biographer, he put Jony Ive, as he considered him, the second most powerful person inside the company after Jobs himself. And that’s largely because he said that they dreamed up most of the products that Apple made together.
CHARLES MIZRAHI: Right. So here you have with Jony Ive and Steve Jobs such a close relationship because he takes Jobs’ ideas and turns them into real products that check all the boxes of what Jobs has in mind for them. These are the best in class. They’re beautiful. They relate to the user. I remember so many times you wrote in the book how the end user had to understand what the product was. You just couldn’t pick it up. It had to be some type of relationship between the product and the person.
TRIPP MICKLE: Yeah, absolutely. There was a fixation and focus inside Apple on developing things that people would pick up and intuitively understand how to use it. They summarized it with the turn of phrase: “It just works.” And another area of emphasis for Jobs was borrowed from Polaroid. And that was the idea that the company needed to live at the intersection of technology and liberal arts. So he wanted something that technologists could use in terms of products that was sophisticated enough to satisfy their needs, but also simplistic enough that it was accessible for. a broader public. And that was most manifested in the iPhone and just the power and sophistication of that device is why it’s become such an indispensable part of our lives.
CHARLES MIZRAHI: Yeah. You know, I just want to build up, keep going on with Jony Ive for just a few more minutes because then we have to contrast it to Tim Cook. And I think the more we learn about Jony Ive, you could really understand where the tension is in this company at this point between Tim Cook and him. Because you brought up some really amazing stories, you spoke to hundreds of people. Jony’s attention to detail to the finest qualities takes on almost a supernatural type of power, a superpower. And you relate how they went to, I think, Japan? Why don’t you tell that story?
TRIPP MICKLE: Oh, yeah, that was one of my favorite stories. There’s a sense around Jony from working with somebody that he may have, like X-ray vision — this from people who worked closely with him over time. Because he could just see things that seemed to escape the average person around them. And they go to Japan on this trip in the early 2000s to check on the state of manufacturing some parts for an upcoming laptop. And they’re reviewing the casing. And Jony holds it up to the ceiling to see how the light reflects off of it. And he just looks really, really frustrated with it and disappointed. And the person with him is an operations engineer who catches the frustration in his eye and pulls out a red pen that he’d bought. And he said: “Jony, just tell me what is not right about this product and we’ll fix it this part. We’ll fix it and we’ll just show the guys. Just circle whatever you need.” And Jony looks at him and says: “I’ve got a better idea. Why don’t you give me a bucket of red paint and I’ll dip this in it and I’ll wipe off the parts that are right?”
TRIPP MICKLE: It’s that type of perfectionism that pushed Apple to have really sophisticated looking products, but then also just the eye to catch some blemishes that would escape the eyes of others was was so critical to what they did. Because nobody wanted to have him be frustrated like that, they went the extra mile to try to head off those type of blemishes in the future.
CHARLES MIZRAHI: But what I find fascinating is that being a supplier of Apple was really a very symbiotic relationship. Forget about the profit that one made. They still are extremely excellent negotiators in terms of letting you make money — and as a shareholder of Apple, you want that to be. So they want to squeeze as much as they can. But on the other hand, the more I kept reading through the book, the vendors were pretty cool with that to an extent because they were learning new ways of manufacturing product and dealing and creating material that they can go and market and continue to create for other customers.
TRIPP MICKLE: Yeah. That was a cornerstone of the operational superiority of the company. It was that they could come in and bring to a supplier a tremendous amount of volume and bring the cash to help invest in the tooling and the materials that were needed to manufacture things. And in doing so, really teach a supplier a new process that its talented engineers had come up with or dreamed up or teach them how to fulfill the design expectations of somebody like Jony Ive. He just had this very sophisticated demand that they needed to meet.
CHARLES MIZRAHI: Yeah. I think it was one of the MacBooks or one of the casings — they come up with a new way of developing the metal with less percentage of some of the material. The way it worked or bent, I don’t remember exactly, but really coming up with a totally different way of creating this material because it had to have that look.
TRIPP MICKLE: Right. They wanted to … I’ll pull out the anecdote you’re looking for. They wanted to have a curvature in the stand of an iMac in the base of it, in an aluminum stand. And if they did it with the existing aluminum that was in the world, it would crinkle almost like the surface of an orange does, and it would have this crinkly surface. And they needed to figure out a way to to get beyond that. So that meant that they had to come up with some new alloys — a new way of mixing the underlying alloys within the aluminum to avoid that so that they can bend the metal in a way that would make it pure and polished when they manufacture this and the thousands and thousands of additions that they would go on to make.
CHARLES MIZRAHI: I don’t want to get more into because, folks, get the book. It’s just phenomenal. If you have an Apple product, you get this book. I wish that you had pictures of every Apple product you’re talking about so you can see the beauty. Because I kept stopping and picking up an iPhone or a MacBook and looking at what you were talking about, because it was really amazing. There’s one part, folks, which just blew me away — when they were building Infinite Loop, which is Apple’s spaceship campus of … What is it, 100 acres or something?
TRIPP MICKLE: Yeah, it’s such an enormous structure that you can lay down the Empire State Building inside the ring and put it flat on its side, and it would fit inside this entire range.
CHARLES MIZRAHI: But anyway, I don’t want to go through with this now, because there’s just too much to talk about, of curving the glass that they wanted. And it was probably the biggest order of glass in history and how they wanted it done a certain way. But what’s so amazing is they wanted it a subtle curve in the glass, figured out back and forth, and I just want to read what you wrote here: “Architects working on the project were astounded at how the lofty demands of a tech company had forced the construction industry to innovate. In the years that followed, they would marvel as other buildings, such as the Los Angeles County Museum of Art, featured curved glass, which might have been impossible without Apple Park.”
TRIPP MICKLE: Yeah. To me, that was one of my favorite details to learn about the book. Because you think of this company as being so superior and in the industry that it dominates — the electronics industry and the smartphone industry. You don’t think of its influence beyond that. And yet here, in this one example in their decision to move into the world of architecture and construction, their combination of design demands, engineering knowhow and operational excellence led one of the largest glass makers in the world to build and construct a huge warehouse. Not to mention they have a ton of cash so they could pay for this. So they built a giant manufacturing facility to build this glass. And then that unlocks the potential for architects and construction and people in the construction industry to do similar buildings in the future, which is just kind of mind blowing.
TRIPP MICKLE: One of the reasons that I find that so interesting is there have been rumors and Apple has worked on a car for a number of years. And when you think about their ability to disrupt and change an industry like construction, it kind of tickles the imagination to think, well, what could they do with the auto industry? Right. It’s had a lot of similar thought and similar thinking and approach to its manufacturing process for on the order of 100 plus years. But if Apple came in, what kind of new thinking would they bring to that to that marketplace?
CHARLES MIZRAHI: You know, I remember back in the nineties, I don’t remember where I read it, but they were mentioning how everything was becoming more technologically advanced. This was still a time where offices had receptionists and you still had fax machines. If you took a picture of the office of the 1990s, late nineties, it’s much different than the office of 1950s. You had a place for computer and you had to have a phone. You didn’t need three assistants. You didn’t need an intercom system, it went through the phone. Whole bunch of innovations — small, subtle innovations like that.
CHARLES MIZRAHI: And I remember reading there was one innovation that really just stalled out, and that was the phone. The phone was pretty much the same phone that was in the 1930s and 40s. It was shaped a little different, but who would have ever dreamed of what the iPhone became, when you think right before it was Handspring, Palm, BlackBerry? A phone without a keyboard? Who could think of something like that?
TRIPP MICKLE: Right. And they face a lot of resistance for that initially until they got the product out in people’s hands. And then once they did, the number of phones they were selling on an annual basis exploded through the roof. Jobs died in 2011. That year, they were making about 20 million phones a year. Today they make about 200 million, make and sell about 200 million, which is just an insane jump in terms of production.
CHARLES MIZRAHI: Okay. So we’ll leave Jony Ive there because I could do a whole show just talking about the innovations. I wish I had that book Made by Apple in California. You told me it’s not even in print. I saw one thing for $1,000 or so on Amazon, but it was a Swiss version or something like that. But just to look at the beauty of the product. For whatever happened there, put that aside. But Jony Ive, no question, him and Jobs were spiritual partners. Without Jony Ive, there probably wouldn’t be an Apple the way we know it.
TRIPP MICKLE: No, certainly not. His fingerprints on the series of products that define their success — that in the eyes of many people who worked there in the 200s, gave rise to this period of Camelot in Cupertino — was everywhere. He designed the iMac, the candy colored computers that did so well. He was instrumental in pushing for white earbuds with the iPod that became the centerpiece of the advertising campaign that was so popular, the silhouette campaign. He designed the exterior of the iPhone and then was instrumental in the development of the iPad. And his imprint is everywhere.
CHARLES MIZRAHI: And the smartwatch.
TRIPP MICKLE: Yeah. And then after Jobs death, of course, the company’s under a tremendous amount of pressure to come up with some new revolutionary product. And it’s Ive himself who steps to the forefront and pushes through the development of the Apple Watch that became — that’s gradually become more popular to the point now you go into an average restaurant in most cities around the country, and you’re going to see at least a third of people in the restaurant wearing the exact same watch on their arm.
CHARLES MIZRAHI: I’m looking at you now wearing one as well.
TRIPP MICKLE: Yeah, I’ve got one.
CHARLES MIZRAHI: And you know, after reading the book and reading about the development of the watch and they pick the right — the crown had to be designed a certain way … I told my kids maybe that could be a Father’s Day present. Because I’ve held off from ordering. I didn’t want something that I had to charge every night. I like a simple Seiko, you know, for $100 I don’t enough to worry about it. But just the beauty that goes into this watch and now the biggest screen. Amazing.
CHARLES MIZRAHI: Okay, so you have Jony Ive. That’s one track and Steve Jobs is that relationship there. Then you have another guy who is totally different. This guy grows up in the South, takes a different track. This guy is brilliant in organization, logistics and everything. And that’s Tim Cook. And he grows up in, I guess the Deep South, right? Alabama?
TRIPP MICKLE: Right. Yeah. Robertsdale, Alabama, which is about an hour’s drive from Mobile.
CHARLES MIZRAHI: Yeah, yeah. He grows up in the Deep South and he takes a different career path and his brain is wired totally different than a Jony Ive. Why don’t we get into that? Because then we’re going to come to a crossing point — really a focal point — where your book basically says where they lost their soul, when Apple became a different company under Tim Cook than it was from the Steve Jobs and Jony Ive relationship.
TRIPP MICKLE: Right. Cook grew up in this small town. In contrast to Jony Ive, he didn’t grow up with a father who nurtured his interests, per se, in what he would go on to do. His father hadn’t gone to college. Neither had his mother. So in many ways, from his earliest days, Tim was kind of marked as a bit of an overachiever within his own family. He really wanted to go to Auburn University. Growing up in Alabama, you kind of you pick one of two colleges largely to go to — either Alabama itself or Auburn. He picked the latter. And when he got to Auburn, he studied industrial engineering. And it’s a fascinating segment of the engineering world, where you’re focused on really human systems. You’re looking for ways to make improvements to how people are operating machines or assembly lines or logistics — just about anything to make small improvements so that everything becomes more efficient. One of the central tenets and questions that he was taught to ask is: Why is it done this way? And when somebody gives a stock answer, the follow up question is still why? And it’s about thinking through new ideas for doing things that have become customary inside companies.
TRIPP MICKLE: And he goes on to become a really distinguished talent quite early in his career, first at IBM, where he would put in the hard work over Christmas break to run assembly lines in Raleigh, North Carolina, where they were manufacturing computers and allow his bosses to stay home. He was identified as a ” hi po” which is a high potential worker. And that gave him a change.
CHARLES MIZRAHI: He’s only 23 or so, right?
TRIPP MICKLE: Yeah, he’s in his twenties. That gave him a chance in his twenties to go to Duke and get an executive MBA and have it paid for. And it sharpens his business mind a fair amount. I think the biggest testament, or like the biggest indication of what he was capable of was when he left IBM and joined a company called Intelligent Electronics. That was kind of a middleman in the PC era. They would take orders from customers who wanted computers. Then they would assemble those computers to spec. And when he arrived, they had parts spread across five warehouses. And one of the first things he did was say: “Well, we’re wasting a ton of time shuttling parts from these four warehouses to this one warehouse to assemble things and ship it off. What if we put all this stuff in one warehouse? We’ll cut our time more than half. And we’ll be able to ship things quickly.” And then to make shipping even faster, he was like: “Well, why don’t we put that warehouse in Memphis right by the FedEx distribution center so we can get things out?” And in many ways, that helped begin to turn this company around.
TRIPP MICKLE: And he went on to Compaq from there. And he was doing much of the same thing. He’d only been at Compaq about eight months when Steve Jobs called him and did an interview. And he went in to tell his boss at Compaq that he was going to lead for Apple. And his boss pulls him aside and says: “I’m planning to retire soon. I’ll retire early. I’ll give you my job if you’ll just stay.” And I just thought that was wild. I asked his boss why he did that and he said: “Well, I was a shareholder, and I knew this guy was so good that he was going to increase the share price so much for Compaq that there was more value in me leaving my job and holding onto my shares than there was in me keeping my job and losing Tim Cook.” And of course, he goes on to Apple and since becoming CEO, they’ve increased their value by $2 trillion, which is just remarkable. You haven’t seen a CEO succession story like that anywhere else in business history.
CHARLES MIZRAHI: What need does Steve Jobs have at the time that he’s searching for a Tim Cook type figure?
TRIPP MICKLE: The quickest way to explain the state of affairs at Apple when Steve Jobs returned in 1997 was it was a hot mess. And the messiest part of all of that was the supply chain. At the time, they were still manufacturing a lot of their own computers here in the US and then in Ireland. Tim Cook came in, assessed what they were doing and pretty quickly began pushing the company to reduce its inventory, which he has a turn of phrase around that he calls inventory evil. And says that basically when you have a computer sitting around, it spoils like vegetables because you’re constantly making improvements to the technology inside a computer. If you don’t sell it pretty quickly, it will become outdated relatively soon. So he streamlined their inventory so that they were better calculating the number of computers they needed to sell, how much demand there would be, and what they would need to supply. And then he was able to further improve their operations over the next few years by striking up this partnership with Foxconn, which becomes a key manufacturer and the primary partner for assembling their products over the next decade.
CHARLES MIZRAHI: What people don’t realize — let me just say, I didn’t realize — is Tim Cook is taking a big risk by going to Apple. You have a company that’s teetering on bankruptcy, really, as you said, a hot mess. And at the time, Compaq was a powerhouse. So he’s jumping from an established company. The check will clear. He had a good pay package. I think he had stock options…
TRIPP MICKLE: Yeah, it was like about $1 million in stock options. And I love that story because when you hear Tim Cook talk about his decision to leave Compaq to go to Apple, he talks in this romantic fashion about it. He said something to the effect of: “My heart just pulled me that way. It just said, go west.” And then I talked to the recruiter and he was like: “No, he definitely planned to take the job. But he told Jobs that if he was going to hire him, he needed a guarantee to pay out the same stock award that he would have gotten at Compaq.” So that to me is like the other side of Tim Cook. He presents publicly quite well and he’s very polished. And he can make the company, Apple itself, seem to live to a higher calling. Right. It’s about doing good in the world in some ways. But then behind the scenes, he’s also incredibly practical and shrewd when it comes to business matters. And this was an example of that early in his career when he left to go there.
CHARLES MIZRAHI: So now we get to the point where we have Tim Cook in the company. You have Jony Ive in the company. Apple is just doing amazingly well. And then Steve Jobs gets really sick in 2011, where the last two years of his life he doesn’t even come into the office. And as we get closer, I think it was October of 2011, after the presentation. What were they unveiling at the time?
TRIPP MICKLE: They were at town hall unveiling the iPhone 4s, which given Steve was sick, had become known inside campus as the “for Steve iPhone. 4s — for Steve.
CHARLES MIZRAHI: So they finished this and Lorraine sends out a text or something out, calls them, get over. They’re thinking, oh my gosh, maybe we screwed up with the product. But it’s really to say goodbye.
TRIPP MICKLE: Yeah. He brought in his closest lieutenants. Apple is a very centralized and hierarchical company with about, at that time and still to this day, about 10 to 12 people who make the bulk of decisions that determine what the company does week in and week out. And these lieutenants come in and they have to say goodbye to him. And one of the first things that the company had done to prepare for his death was get the board to approve a large stock grant to to these top lieutenants, because they wanted the world to know that even though Steve Jobs was not there, the people who were most loyal to him and understood how the company operated, would remain and continue to lead it forward.
CHARLES MIZRAHI: And so the last person that Steve Jobs speaks with is Tim Cook. Right. Jony Ive walks out right before, he’s shaken, totally shaken — his world is collapsing here. And you describe how he goes into some type of state of depression or just lethargic. It’s like life was sucked out of him. And Tim Cook’s the last guy to speak with him and which is really amazing testament to Apple, Jobs and their board — that the day Jobs died, I think the stock didn’t go down much. I think it was maybe half a point, it was some little amount. And I remember reading at the time, they were saying that’s hopefully what Berkshire Hathaway will happen after Warren Buffett dies because of the way the succession plan was put in. Because Cook’s running the company for a while now, right? It’s about two years or so?
TRIPP MICKLE: Right. He’d been leading the company while Jobs was sick. And Jobs pulled him aside when he was tacked Tim Cook to become CEO, which was summer of 2011, and told him: “Look, you’re going to be leading the company. I’m still going to be there. I’m going to be a chairman, I’ll be an advisor to you. But it’s important, no matter what, that when you do things, you don’t sit there and ask, what would Steve do? It’s important to me that you just you do what’s right.” And this became a key piece of guidance for Cook because it freed someone who felt uncomfortable about his lack of expertise in some ways — in designing and conceptualizing product, in the product arena that was core to Apple’s business/. It freed him from feeling obligated to spend a tremendous amount of time on that and allowed him to define the CEO he wanted to be for himself as opposed to trying to just ape what Jobs had been for all those years.
CHARLES MIZRAHI: I found it really fascinating that Jobs studied Polaroid, he studied Disney and he didn’t want Apple to end up like, what would Walt do? After Walt Disney died, where the company just basically stops in its tracks and is trying to live through the founder and their vision, which nobody even knows anymore. It’s really a guesswork. And here he was so bold to say: “Find your own path and do the right thing.”
TRIPP MICKLE: Yeah. That was a key piece of guidance for Cook. It allowed him to focus on trying to maintain the team that Jobs put together. And then try to take this expertise he had from those days at Auburn studying human systems and figure out, okay, this whole system was built around this one man. How do we function and continue without him? Jobs, for all intents and purposes, was the chief technology officer, the chief design officer, in many ways, the chief marketing officer. You know, he was intimately involved in all those aspects of the business. And Cook, in his place, sets up a system where the emphasis is on collaboration and leadership by committee rather than the autocracy that had really existed for a long time.
CHARLES MIZRAHI: Got it. So now we get to the point where Jobs dies. And the company is really at a crucial period of time. Does it follow the school of Tim Cook and become a regular number crunching company which looks at shareholder value and looks at nickels and dimes? Which they never did. Cost was never a consideration when doing anything. It was to make the best product in the world. Tim Cook’s way or Jony Ives way. And that’s where you have that conflict, right?
TRIPP MICKLE: Right. It’s kind of an unspoken power struggle that plays out over the course of the next decade. Initially, Jony Ive kind of gets through this period of mourning and grief and becomes galvanized by the Apple Watch project, which they embarked on around 2012, and brought forward and introduced the world in 2014. And Tim Cook increasingly becomes focused on bringing some financial discipline to some of the work that they’re doing. And you see that namely in the Apple Park project that we talked about. Jony Ive was involved on the design side. But Tim Cook brings in some of his best negotiators to make sure that Apple pays as little as possible for the glass. And that becomes kind of a telling moment for the company going forward, because that would increasingly become the type of thing that would happen over the next few years. You’d have what people might classify as right brained thinkers rotate off Apple’s board, and in their place they were replaced by left brain thinkers and people Jony Ive dismissed as “accountants.” They had backgrounds either in operations or in the world of finance.
CHARLES MIZRAHI: And Jony Ive leaves when?
TRIPP MICKLE: He grows disillusioned with some of the changes. He really was tired and weary after working on the watch and tries to move into a part time role around 2015. He does shift into that role. He’s focused primarily on new products and their efforts in that arena. And then ultimately walks away in 2019. In his exit, one of the things I hope people think about or at least feel somewhat sympathetic to or even repulsed by, I don’t know. It depends on where you may come down as a reader. But I hope you can appreciate that there’s no easy way to leave a company that you’ve been up for a long time. I think Jony Ive’s story and his exit are food for thought for anybody who’s contemplating leaving a place that they’ve worked.
CHARLES MIZRAHI: Why is that?
TRIPP MICKLE: This idea that he went to a part time role, it put his longtime colleagues in a difficult spot. The way the design studio had been set up to run was structured so that he was regularly weighing in on the various iterations of a product before it was introduced to the world. And when I say regularly weighing in on, it’s like three times a week. And then he goes to part time and he’s coming in like once a month to review products. And at that point, they might have decided that they were going in a certain direction. He’d come in and say: “No, I’d prefer this.” Then they have to go back to the drawing board, meet his specifications. It just created some tumult and wrinkle in a system that had been pretty well ironed out up to that point. And that’s why I think it’s interesting. When you love working at a place, it’s hard to know when the right time is to leave and how the right way is to leave. And you can see him in his experience fumbling his way through that.
CHARLES MIZRAHI: Right. And the brilliance … I think Warren Buffett said that Tim Cook is one of the most amazing CEOs of this generation. He takes over after Jobs, let’s call 2012 his first year. Sales are $156 billion and they’re making around $68 billion in profit. Now, trailing 12 months, $385 billion. More than doubled revenue and profit went from $68 billion to $167 billion. Astounding. These are astounding numbers. In the short time we have left, you titled the book How Apple Became a Trillion-Dollar Company and Lost Its Soul. What do you exactly mean by lost its soul?
TRIPP MICKLE: I want to emphasize both parts of that, because there are two central figures in this book, Tim Cook and Jony Ive. And the first has been key through the numbers you were just citing, in turning Apple into a multi-trillion dollar company. The latter, Jony Ive, was a creative soulmate of Steve Jobs — creative partner and creative soulmate of Steve Jobs, who literally saw the company in the eyes of its founder. And he walked out the door in 2019. And the reason he did so was that he grew increasingly disillusioned with this company that had long been a place where art led to commerce, where he had the purview to be ambitious and not have cost questioned with some of his designs, to a place where commerce increasingly dictated art. Because the company became so enormous and the expectations of Wall Street were so tremendous, it had to bend to Wall Street’s will.
CHARLES MIZRAHI: But eventually, at some point in this timeline, it would have had to regardless. Right? Could a company continue on like Jony Ive’s vision without being grounded in finance?
TRIPP MICKLE: No, absolutely not. I think it’s less the idea that could it not be grounded in finance. It’s more of the opportunity cost when you become a certain size company. When you’re putting up $300 plus billion dollars in revenue, you can’t say: “Let’s make a new line of speakers that we’re going to we’re going to make $500 million off of.” That’s not a worthwhile endeavor.
CHARLES MIZRAHI: It’s not going to move the needle.
TRIPP MICKLE: Exactly. Yeah. It’s not going to add enough sales to your top line to justify the work that you’re going to have to do for it. And so as you become that big, you increasingly have to make decisions that a more nimble version of Apple wouldn’t have had to make. And there are sacrifices there.
CHARLES MIZRAHI: Right. So in the short time we have left in closing, you now have a front row seat. You’ve had a front row seat to Apple for a long time. Right. You’ve had access to, I don’t know, 200 to 300 people that you interviewed for this book? Insiders, people who worked at Apple, who couldn’t say because it’s pretty much like the mafia, right? You know, you’re not allowed to share anything. What goes on at Apple stays at Apple. All those anonymous sources you had. You’re in San Francisco now, right? So you’re around that crowd. You have a lot of contacts. You have a front row seat to what’s going on there. I know you’re not going to be 100% accurate because no one really can predict the future. Where do you see Apple in five years? What kind of company is it?
TRIPP MICKLE: I think the company’s ability to maintain its perch as the world’s largest company is going to have more to do with geopolitical issues than whether or not it makes another revolutionary product. In a weird way, it’s moved past some of the benchmarks that it was once judged by, which is, when is Apple going to come out with the next revolutionary product? That’s less important right now for this company than how are they going to navigate a world where the tensions between the U.S. and China — these two economic powerhouses that Apple straddles — how are they going to navigate a world where the fault lines are becoming ever increasingly shakier between those two places?
CHARLES MIZRAHI: Just recently in the quarterly earnings call, Tim Cook said, you know, the China situation with the lockdowns, with COVID in Shanghai and all are going to cost them close to $8 billion revenue. So to your point, a lot of the factors are way out of making a beautiful white box that makes you feel like you drew it out. They are going to be factors that Apple’s going to have to face and challenges, I should say, obstacles. But you know what? I just find that the culture from what I know from the outside — you know much better than I, of course — and the brilliance of Tim Cook, that like the glass, they’ll figure a way around it. I don’t know. I don’t think it’s wishful thinking. I am an Apple shareholder and have been for a long while, but it seems to be a type of company that obstacles are really opportunities.
TRIPP MICKLE: Right. It’s the type of company that if you decided to bet against them in 2011 after Steve Jobs death, you would really regret that. I can’t tell you how many employees left over the years and did the right thing financially and diversified their shares, but are also kicking themselves because they’ve watched Apple’s share valuation just accelerate since their departure.
CHARLES MIZRAHI: Yeah. If you had to guess, how do you see them overcoming some of these challenges that they’re going to be facing — or they’re facing now. Do they seem stuck to manufacture a product in the United States? I know the service business is expanding greatly, which includes the App Store and iTunes and all those kinds of things — I remember when they came out with the App Store. That’s when I started investing in the company, I think it was 2012. I said, that’s going to be the business. Because it had my credit card on file, I think at the time it had 400 million credit cards on file, and I saw my son buying apps every day — how easy it was to spend $0.99. It was seamless. They made it easy. And I’m saying, my gosh, you know, you have $400 billion credit cards on file and people just buying and they’re getting a piece of that for doing nothing — well, building the infrastructure. It’s just absolutely amazing. I think the service is up to $40 or $50 billion.
TRIPP MICKLE: Yeah. One of the more brilliant maneuvers Tim Cook instrumented over the past years has been developing that “services business” — more software and apps across the iPhone than they had previously. And that’ll provide them with a bit of cushion especially if we get into a period near term where people hold onto their iPhones slightly longer because we go through some kind of an economic recession.
CHARLES MIZRAHI: Or supply chain issue.
TRIPP MICKLE: Right, or there’s ongoing supply chain issues like they’ve had with Shanghai and shutting down some of the factories there. The most pressing issue is trying to get some manufacturing set up and spun up outside of China itself. They’ve had mixed luck with that so far. And the results have been quite uneven. You know, in India, they actually had to shut down some of the factories that they’ve set up there because of the working conditions became problematic. But that’s really going to be, you know, top of mind for them going forward.
CHARLES MIZRAHI: Yeah, outstanding. Folks, the name of the book is After Steve: How Apple Became a Trillion-Dollar Company and Lost Its Soul by Tripp Mickle. Is this your first book?
TRIPP MICKLE: Yeah, first book.
CHARLES MIZRAHI: Wow, you got talent, guy. Really good stuff. I’m telling you, folks, this reads like a novel. You keep the reader engaged. You kept me engaged and just when the story got a little too long in the tooth, you switch to something else. You went back and forth with Jony Ive and Tim Cook, then back to Apple. Really well done. It just keeps you reading. It really keeps you reading. Well done.
TRIPP MICKLE: I’m thrilled you enjoyed it and appreciate you having me on.
CHARLES MIZRAHI: Oh, my pleasure. And I hope you sell a zillion books. Really great. And I hope the stock keeps going up and Apple keeps producing great products. Because our house is a total Apple … I remember 2006 when I got an iMac and I remember how the next couple of nights I went to sleep uneasy because I was so unfamiliar and I said: “How am I going to learn this? It’s a whole new operating system.” After using the Windows operating system and using a PC, this was alien, but it was just beautiful. We had a huge, huge screen. I forgot it was 30 inches or something. Everything built into the computer. Just such a beautiful, elegant machine. And it looked beautiful on the desk and it took time. But I have to say, I haven’t touched a PC since 2006.
TRIPP MICKLE: You’re not alone in that category. And I think they’ve done a good job of bringing on board new Mac owners of late, too, because they’ve got these new custom chips that are outperforming a lot of the competition in the PC market.
CHARLES MIZRAHI: And once you get into that ecosystem, it kind of sucks you in. Everything works together, you know, which is just really amazing. All right, Tripp, lots of continued success to you man. Outstanding work. Once again, folks, After Steve: How Apple Became a Trillion-Dollar Company and Lost Its Soul by Tripp Mickle. We have to have you on again and some time from now, just to see how many things change in the world and how Apple deals with that.
TRIPP MICKLE: Happy to come back any time and it’s a good incentive to go write another book as well.
CHARLES MIZRAHI: Great man. Thanks so much.
CHARLES MIZRAHI: Thanks for listening to this episode of The Charles Mizrahi Show. If you’re a new listener, welcome! If you’ve been listening for a while, we’re glad to have you back. Either way, we’d love to know what you think of the show. Please leave a review if you listen on Apple Podcasts. Reviews make it easier for others to find the show. You can also see the video of the interview on The Charles Mizrahi Show channel on YouTube.
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