Iconic Tour

How Apple's Tim Cook followed the toughest act in tech

Tim Mullaney, special to CNBC.com
Apple CEO Tim Cook delivers the keynote address at Apple's annual Worldwide Developers Conference at the Bill Graham Civic Auditorium in San Francisco, California, onJune 13, 2016.
Gabrielle Lurie | AFP | Getty Images

When Steve Jobs died in 2011, Tim Cook had a tough act to follow: one of the toughest bosses in the history of tech. Cook has hit some bumps along the way. But Apple's chief executive, now 56, has overseen a rise in Apple's share price of more than 175 percent since being named CEO in August 2011. That's better than the S&P 500, Nasdaq and Dow over the same time period.

Cook's personal style is much more low-key than Jobs' — almost anyone's would be. But his substance and his style have emphasized continuity with the company's founder, while making some adjustments reflecting, among other things, the fact that Apple is now the most valuable company in the world, with a market capitalization over $750 billion.

Apple shares have reached a new all-time high this week.

Here are some of the ways Cook has embraced the best of Jobs' genius, while also coding his his own management ideas into Cupertino's program for continued success as the company, and the world, continue to change rapidly.

(Still) thinking different

Employees celebrate opening of an Apple store in Rio de Janiero, Brazil
Getty Images

"You should rarely follow the rules," Cook told an audience at Duke University's Fuqua School of Business. "What Fuqua teaches you so well is how to learn and how to collaborate. Write your own rules."

That's a direct descendant of Jobs' emphasis on promoting managers who were creative people themselves, rather than the "bozos" he said Apple had hired when it opted for professional managers late in his first stint at the company.

Cook once told an interviewer that his ideal worker is someone who has an idea late at night and calls him to talk about it, because the worker can't wait, and also because that worker should understand they'll need help to develop the idea into a polished product.

Doing a few things well

Apple iPhone 7 and AirPods, headphones
Mark Neuling | CNBC

Under Jobs, Apple's penchant for streamlined design extended to its product line, which was notable for having relatively few products — the iPhone, which contributes more than half of Apple's sales in a typical quarter; the iPad; the Macintosh computer line and the iPod. Plus, a services business that is mostly tied to supporting the others.

Cook has added to that list, most notably with the $3.2 billion deal to buy headphone-maker Beats and the Apple Watch, but has moved slowly in areas like Apple TV, music, virtual reality and autonomous cars. It has spent money in these areas without major breakthrough products or, in the case of cars and car components, any at all.

So far, the health of the iPhone business has kept Apple shares rising, but at some point the company will need another big hit to keep growing rapidly. Apple announced its latest tweaks to the iPhone on Tuesday.

Engaging a bigger world

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Cook has been much more willing to discuss social issues than Jobs was. Many tech CEOs are privacy defenders, but Cook was willing to take on the federal government over the San Bernardino mass shooter's iPhone encryption. He has been active in getting Apple and its employees involved in philanthropy, instituting an employee gift-matching program. He has made a point of environmental awareness, hiring former EPA administrator Lisa Jackson in 2013 to oversee efforts to cut Apple's carbon footprint: By 2020 the company plans to build 200 megawatts of solar power in China to offset the electricity its manufacturing partners use. This is part of a broader effort to build 4 gigawatts of clean power worldwide — about four times the amount of wind and solar power in use in the United States as recently as 2015. Cook also has been outspoken about gay rights, having come out himself in 2014.

Minding the money

Tim Cook

Jobs exemplified Silicon Valley's belief that engineering always, and everywhere, trumps financial engineering, but Cook has pursued a more balanced approach. He instituted Apple's first dividend since 1995 in 2012, and the stock now yields about 1.7 percent annually. He has also bought back more than $200 billion of shares, pleasing even uber-financier Carl Icahn, who urged the company to get more aggressive in handling its giant cash reserves.

Boosting the R&D budget

The Apple Campus 2 is seen under construction in Cupertino, California in this aerial photo taken January 13, 2017.
Noah Berger | Reuters

Oddly, considering Jobs' reputation as a risk-taking product visionary, Cook is spending more on research and development, even as a percentage of sales, than Jobs in his later years. The company had its first $10 billion budget for R&D in fiscal 2016, led by building R&D centers in Japan and China to supplement work done in the United States. Not much is known about what products will come out of all this, but some form of technology to help guide next-generation vehicles is believed to be in the pipeline.

Just this week Bloomberg reported that Apple is spending big to develop augmented reality glasses and iPhone features.