For the last few years, Tim Cook has masterfully steered Apple through a difficult transition period following the death of Steve Jobs. Apple's products continued to define their categories, sales set new records, the stock spent a short time above $700, and the company has managed to garner the majority of industry profit for smartphones and tablets.
But Cook is now facing his biggest challenge since taking over as CEO, for a number of reasons, including "What have you done for me lately." But he doesn't seem to be too worried about the competition or the slower cadence of product launches.
Samsung with its broad array of smartphones, including the new Galaxy 4, as well as a prodigious advertising campaign, is creating more serious competition in the most-desirable-phone category. The South Korean electronics giant announced that it had shipped 10 million Galaxy S4 units across 60 countries in less than a month, double the amount of its predecessor, the Galaxy S3, for the same period. Apple shipped 37.4 million iPhones in total in its most recent quarter. The last new iPhone began shipping on Sept. 21, 2012.
In addition, Google's Android operating system is soaking up a lot of the expanding mobile device market for smartphones as well as feature phones. According to IDC, Android phones accounted for 75 percent of sales in the first calendar quarter of 2013, up from 59 percent the same quarter last year. Apple was at 17.3 percent, down from 23 percent a year ago.
For Cook, however, winning is not about making the most phones or tablets. "That's never been a cornerstone of Apple. Arguably, we make the best PC, we don't make the most; we make the best music player, we wound up making the most; we make the best tablet, we're making the most there today; we make the best phone, we're not making the most phones," Cook said during an interview at the D: All Things D conference this week. "There are several things that to access the health or how you are doing, just like you would with your body, you would take more than one measurement."
Cook likes to measure customers satisfaction, which he said is "unprecedented" in a good way, and usage, citing NetMarketShare research that shows 59 percent of global Web traffic from smartphones and tablets is from iOS devices. He likes Apple's vital signs, despite eroding share and a slipping stock price.
On the tablet front, Android could overtake iOS as the top selling platform, according to ABI Research, but Apple still holds a very profitable 50 percent share versus the many Android tablet players. And, on the core apps front, Google is putting more heat on Apple with Maps, Google Now, and soon its new streaming music service on iOS.
To continue to be loved by its users and keep its profit margins high, Apple has to keep the game-on updates and game-changing hits, like the iPhone and iPad, coming. A major hardware product miss, something far bigger than the flawed Maps app, could cause the Apple brand to suffer a bout of antipathy rather than the usual unbridled exuberance.
Cook seems very confident that Apple isn't losing its way or ability to create hit products and invent new categories.
"We have some incredible plans that we have been working on for a while," Cook told All Things D's Walt Mossberg and Kara Swisher. "We have incredible ideas, the same culture, and largely the same people that brought you the iPhone, the iPad, many that brought the iPod, and some that even brought the Mac are still there. The culture is all still there, and many of the people are there. I think we have several more game-changers in us."
Well, it's been nearly 8 months since Apple introduced a new iPhone, and 7 months since the iPad Mini made its debut. In technology time, that is a long period without doing something incredible or even incrementally cool like a lower-cost iPhone, and opens the door wider for competitors. Apple did just quietly release a new, slimmer iPod Touch, eliminating the rear-facing camera. Not that cool.
With Apple's Worldwide Developer Conference starting on June 10, Cook disclosed during the interview what almost every Apple watcher knows -- his team led by Sir Jony Ive would be rolling out the future of iOS and OS X at the event. But that was it. Nothing about Apple reinventing TV, watches, glasses, or smartphones again.
"We release products when they are ready, and we believe in the element of surprise. I have no plan on changing that," he said, adding his notion of a chain reaction that leads to product greatness at Apple. "We have to focus on products, making the best products. If we do that right and make great products that enrich peoples' live, then the other things will happen."
Tim Cook has set the bar high, continuing the practice of his predecessor. At some point though, in the coming months, he will need to jump over that bar with Apple's next game-changing or super game-on product, or he will have something to worry about.