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Former Apple CEO John Sculley said on Monday that Tim Cook has done an excellent job steering Apple (AAPL), but when it comes to leading the pack with breakthrough technology, the Cupertino, California-based tech giant falls short.
“Tim Cook has done a terrific job building shareholder value, but I wouldn’t say he’s put the highest priority on technology innovation,” Sculley explained to Yahoo Finance anchor Alexis Christoforous on Monday. “I think he’s done a great job of positioning Apple as a luxury brand that stands out in the iPhone business particularly, [given] that Apple has about 15% share market but makes about 90% of the profits of all smartphones worldwide.”
Some avid Apple fans will surely disagree with the sentiment, but Sculley, who went on to co-found Zeta Global, points to Apple’s ongoing rivalry with Samsung for proof. On that front, the former Apple chief executive contends Apple employs a fast follower approach, releasing many technologies about 12-18 months behind Samsung.
“All of us know that the first iteration of a technology has to absorb the R&D investments that have been made to bring it to market,” Sculley adds. “We also know that it’s hard to scale the first innovation of a new technology. It takes a while to get to a point where it can get repeatable in large numbers. So, it’s a smart strategy for Apple to lag in innovator technology like Samsung. On the other hand, Apple is able to build its brand, keep its loyalty, and it’s done a great job, for example with the iPhone X, which I think is an incredibly successful product.”
What lies beyond the iPhone for Apple?
Less clear for Apple is what lies beyond the iPhone. Cook has repeatedly said he believes augmented reality (AR) — a technology that overlays digital images and information atop images and video of the real world — is poised to “change the way we use technology forever.” Meanwhile, longtime Apple pundit and Loup Ventures Managing Partner Gene Munster predicts AR devices, the kinds which don’t require touchscreens to access information, will eventually supplant today’s phones. But while Apple has released some AR software tools, it hasn’t revealed what its AR hardware devices will look like.
“Eventually, we’ll see successors to the iPhone,” Sculley argues. “The question is, how is Apple going to do that? Is it already working on these types of potential successors to the iPhone? It may not be needed for 5 years, but 3, 4 or 5 years to create something that is going to be a real candidate to be a successor to the iPhone. So I don’t know how Apple is going about this. … How exactly Apple is going to go about what comes after the iPhone, even if it’s 5 or 6 years from now is still unknown to me and I’m sure is still unknown to most others.”
Whether Apple is up to the challenge of recreating the success it found with the first iPhone in 2007, of course, remains to be seen.
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