Tim Cook charm resolves Twitter spat yet China crisis rumbles on
Tim Cook was already battling one of the biggest disruptions to Apple’s crucial supply chain operations in China since the onset of the global pandemic when the tweet tirade began.
In a flurry of more than a dozen tweets on Monday, Elon Musk launched a broadside against the world’s most valuable tech company, questioning the Apple chief’s commitment to free speech. Musk, who bought Twitter for $44bn in October, rallied his 120mn followers to support a “revolution against online censorship in America”.
Cook was able to placate the erratic billionaire within two days. Soon Musk was tweeting again, calling the whole thing a “misunderstanding” and thanking Cook for a personal tour of Apple’s headquarters, known as Apple Park.
A former Apple veteran of more than 10 years was not surprised by Cook’s diplomatic nous.
“I’m sure Tim charmed him,” the person said. “He wanted to hear [Musk] out. And I’m sure Tim gave his perspective. That’s what Tim does: he rolls up his sleeves and fixes problems. He’s not into big public disputes, whether it’s a PR dispute or something more contentious. That’s not his MO. He’s not like Elon.”
Cook’s low-key, behind-the-scenes manoeuvring since taking over from Steve Jobs in 2011 has been instrumental in solidifying Apple’s position as the world’s largest company.
His role as Big Tech’s calm elder statesman has been put to the test over the past month amid huge disruption at the world’s largest iPhone factory in Zhengzhou, China, which has been hit by violent protests over stringent Covid policies.
The chaos at the Foxconn-owned plant, known as “iPhone City”, forced a rare warning from Apple in November that high-end iPhone shipments would be “significantly reduced” just ahead of the holiday period.
It is, perhaps, Cook’s greatest test yet. The iPhone might capture less than a fifth of global smartphone sales, but it takes 80 per cent of the profits. Under Cook, Apple has grown by about $2tn.
“The first trillion dollars came from Jobs and [Jony] Ive, the next trillion came from what Tim Cook has done,” said John Sculley, Apple’s CEO before Jobs returned in the late 90s. “He does it in a quiet way and doesn’t draw attention to himself, but he does a remarkable job.”
In the past five years, Alabama-born Cook’s pragmatism has enabled Apple to avoid damaging tariffs under President Trump; his consumer privacy arguments earned him allies in Brussels amid widespread anti-tech sentiment; and Apple’s investments in China allowed production to keep largely humming during the pandemic.
A week into Joe Biden’s tenure, Cook penned a letter praising the President’s actions to protect immigrants brought to the US as children. It is the type of move that earned him an invitation to Thursday’s White House dinner honouring French president Emmanuel Macron.
“His best skill is just understanding the need to take care of everyone — being multidisciplinary and not having a favourite,” said Steve Wozniak, Apple’s co-founder.
Cook’s role as a diplomat represents something of a third act. His first triumph was drawing up Apple’s manufacturing operations in China after Jobs lured him to Cupertino, from PC-maker Compaq, in 1998. Cook has also built a $74bn business in the country — far more lucrative than any of its Big Tech rivals.
Inside Apple, Cook’s contributions are recognised as just as important to the success of the iPod, iPhone and iPad as that achieved by its famed designer Ive.
“When you hold an iPhone in your hand, the names that come to mind immediately are Steve Jobs and Jony Ive, but the contributions Tim Cook has made are just as relevant,” said Sculley.
His second major achievement has been solidifying the iPhone as the world’s aspirational brand of choice. Cook has extended Apple’s reach into new media and services, and laid the foundation for expanding its footprint into the finance, automotive and healthcare industries.
Cook’s steady hand, handsome dividend policy and massive buyback scheme has earned the trust of Warren Buffett, who refers to Cook as “Apple’s brilliant CEO” in his letter to shareholders.
Never an investor under Jobs, Buffett is now Apple’s largest single shareholder with a stake worth some $140bn, representing more than 40 per cent of Berkshire Hathaway’s investments.
None of this success was predicted. The first major book on Cook’s early tenure, Haunted Empire, published in 2014, described him as “painfully out of touch” and Apple as “more limited in what it could do than ever before.”
The idea that Apple would be outpaced by the likes of Samsung became such a trope that satirical news site The Onion once envisioned a heavily perspiring Cook on stage in Cupertino under the headline: “Apple unveils panicked man with no ideas”.
While Cook’s success has been clear, part of his legacy is currently at risk as the wisdom of concentrating Apple’s assembly operations in China comes under close scrutiny following the Covid revolt at Zhengzhou.
Apple’s smooth manufacturing operations have underpinned its growth for the past two decades, but with China accounting for 95 per cent of iPhone production, investors are now questioning what his Plan B is.
The optics of Apple’s diplomacy with Beijing have also come under focus as wider protests have rocked the country in recent weeks.
When Apple recently imposed limits in China on the use of AirDrop — an iPhone feature being used to share information by protesters — Florida governor Ron DeSantis accused Apple of siding with Chinese leader Xi Jinping’s crackdown, while Missouri Senator Josh Hawley wrote directly to Cook: “Under your leadership, Apple has time and again assisted the Chinese Communist party in surveilling and suppressing the basic human rights of the Chinese people.”
Cook had a chance to clarify on Thursday when a journalist confronted him in Washington, asking whether he supports Chinese citizens’ right to protest. His response suggested his diplomatic skills were reaching a limit: he ignored her.