Apple CEO Tim Cook showed Scott Forstall and John Browett the door, shuffled other executives around, and generally flexed his boss muscles this week. Analysts mostly cheered even though Apple's management plays like a soap opera, and Microsoft CEO Steve Ballmer practically begs Mac OS Ken's Ken Ray to break out his WTF stick.
Apple's Executive Shuffle
Two big things out of Apple this week, and a bunch of other big things shuffled about. The Cupertino company sent out a press release with the wackiest headline ever: Apple Announces Changes to Increase Collaboration Across Hardware, Software & Services.
Next line: Jony Ive, Bob Mansfield, Eddy Cue and Craig Federighi Add Responsibilities to Their Roles.
Reading between those lines: Apple Retail Chief John Browett and iOS King Scott Forstall have been fired.
Apparently they like the song that says you've got to accentuate the positive. Quoting the press release:
Apple today announced executive management changes that will encourage even more collaboration between the Company's world-class hardware, software and services teams. As part of these changes, Jony Ive, Bob Mansfield, Eddy Cue and Craig Federighi will add more responsibilities to their roles. Apple also announced that Scott Forstall will be leaving Apple next year and will serve as an advisor to CEO Tim Cook in the interim.
How nice, but why? We'll get to that in a bit.
According to the press release, "Jony Ive will provide leadership and direction for Human Interface across the company in addition to his role as the leader of Industrial Design."
Eddy "the Stuff" Cue "will take on the additional responsibility of Siri and Maps, placing all of (Apple's) online services in one group," "Craig Federighi will lead both iOS and OS X," and "Bob Mansfield will lead a new group, Technologies, which combines all of Apple's wireless teams across the company in one organization, fostering innovation in this area at an even higher level. This organization will also include the semiconductor teams, who have ambitious plans for the future."
So Apple's getting into technology, now?
"Additionally," says the press release, "John Browett is leaving Apple. A search for a new head of Retail is underway and in the interim, the Retail team will report directly to Tim Cook."
So it's not so much that he "is leaving" as he "has left."
We've heard rumors, especially over the past year, that there was trouble brewing inside Apple between Scott Forstall and other Apple execs. But I've gotta say, I never thought they'd fire him. And Apple has said nothing indicating that they did, in fact, fire him. But every report from every source accepts it as fact that Apple did, in fact, fire Scott Forstall.
This, of course, prompts the question: why?
Well, there is the internal turmoil I mentioned, and that might have been a part of it. The Wall Street Journal says Forstall may actually be a casualty of the Mapocalypse, or really, of his unwillingness to shoulder his part in it.
Quoting the first paragraph of the Journal's piece:
Apple Inc. executive Scott Forstall was asked to leave the company after he refused to sign his name to a letter apologizing for shortcomings in Apple's new mapping service, according to people familiar with the matter.
Secret people with no names, of course, and nondescript faces. The piece points to the same rumored tensions between Forstall and the rest of Apple's executive team, though the Mapocalypse was reportedly the straw that broke the camel's back.
Quoting the Journal again, "Mr. Forstall's team had been working to replace Google Maps on the iPhone for years. After Apple released its software to the public in September, users immediately complained about data inaccuracies and other bugs."
You hear that? The Wall Street Journal is blaming you. But not really. The piece continues:
In deciding how to manage the crisis, Mr. Forstall argued that the company could address the outcry without apologizing, as Apple had done when it shipped iPhones with faulty antennas a few years ago, one of (the sources) said. Mr. Cook and others disagreed, these people said. Mr. Cook signed his name to the apology instead.
It's worth remembering, Jobs brought Forstall with him when he returned to Apple from NeXT. Many have compared Forstall's fiery management style to that of a young Steve Jobs. And many have said that Jobs would never have apologized for the maps thing.
He might have told you you were using it wrong instead.
So, while there's nothing to confirm the Wall Street Journal account, there's not much to make it sound unreasonable, either.
Cult of Mac has no problem believing that Forstall was fired. They start a piece on the move, "Even though it's obvious that Scott Forstall was canned by Tim Cook, he's being kept on for a year as an advisor to the CEO."
Why is Cook keeping a guy to advise him that he saw fit to fire? This is probably corporate speak. The piece from the Cult says, "It's all about preventing Forstall from jumping ship. Noncompete agreements are not enforceable in California... Obviously, an executive of Forstall's stature would be snapped up in a second by a rival like Google or Microsoft."
You know, if you do the currency conversion, Samsung's money is green, too. And HP is making noise about wanting to get back into smartphones.
He leaves next year, though. Plenty of time for Microsoft, Google, Samsung, HP and anyone else to prepare their recruiting packages.
Jonny Ive: Design Guy
Interesting as the Forstall fight is to ponder, AllThingsD says the big news is not the iOS exec's departure, and it's certainly not "bon voyage Browett." The big news is the dawn of the Jony Ive era. "That's because on Monday," says the piece, "Ive was given a role that no executive other than co-founder Steve Jobs has ever held before — oversight of all Apple product design."
Says AllThingsD, "That means Ive will oversee the design of Apple hardware and software both and has been tapped as the new steward of Apple's user experience." Tim Cook had to choose between Steve Jobs' two anointed ones. Well, he chose between them, anyway.
Perhaps the most immediate impact: say goodbye to skeumorphic design. You know, the leather stitching on the iOS calendar app, and the shelves for iBooks and Newsstand. Steve Jobs was said to have loved such flourishes. Forstall was said to have pushed for them. Jony Ive, not so much.
And now he'll be one of the final voices, if not the final voice, on such design decisions.
So Newsstand may not look like a newsstand anymore. I'd be fine without the fake leather stitching.
"When did Scott Forstall know he was in trouble at Apple?" asks BusinessInsider. Their guess, maybe as early as last April. That's because last April, Forstall sold 95 percent of his Apple shares, perhaps sewing himself a $38 million parachute, after taxes.
The question the site has now, will Tim Cook let Scott Forstall advise him through the end of June? Forstall was granted 150,000 shares of Apple restricted stock, half of which are set to vest on June 21, 2013. That's contingent, of course, on Forstall still being employed by Apple. Which he technically still is.
If he's able and allowed to hang in there, and if Apple's share price goes no lower than it is this week, Forstall will kick off the summer with $45 million worth of Apple shares.
There's also rumor and speculation around the exit of Scott Forstall and the full-time return of Technologies chief Bob Mansfield. AllThingsD says people familiar with Apple think Mansfield was serious about retiring earlier this year, and that he was serious about returning to the company only as an advisor. But, when Apple announced earlier this week that Forstall would be taking the long walk, it also announced that Mansfield was back to work full-time for two more years.
Quoting one source, "The timing of Bob's return is not coincidental."
Another source said,
It wasn't a him-or-me situation. But, put it this way, I think Bob was much more willing to commit to two more years once he knew Scott was on his way out.
So they may have gotten Mansfield back in the fold for a while. What they lost, according to a separate piece from BusinessInsider, was "the most prolific inventor at the company, as measured by recent patent filings."
According to Erin-Michael Gill, Managing Director of patent analysis firm MDB Capital, Forstall's name is on 166 pending patent applications right now, more than anybody else at Apple. Says Gill of Forstall, "He's one of (the), if not the most prolific inventor at Apple... If this guy is who the data seems to imply he is, letting him leave is a huge deal."
By contrast, the names Craig Federighi and Jony Ive -- the two men taking over Forstall's duties -- appear on a total of 67 pending patents.
Not necessarily a huge deal, but an interesting point none the less.
Analysts: Assemble
A downtick in Apple shares comes despite financial analysts -- the ones who advise investors -- telling investors that Apple's reorganization is pretty much a good thing. Barrons runs down a few, starting with RBC Capital's Amit Daryanani:
"While there will be concerns around future execution given Mr. Forstall's departure, we note that Apple has navigated through past turnovers impeccably (Jon Rubentein, Tony Faddell, etc.)."
JP Morgan's Mark Moskowitz: "There is likely to be a spirited debate in coming days over the potential fall-out" of the Mapgate "debacle," "but we are encouraged to see CEO Tim Cook making swift decisions and holding decision-makers accountable."
Barclays Capital's Ben Reitzes: "We believe that this move really puts in place "Tim Cook's team" versus one he inherited. We are particularly pleased to see increased responsibilities for Jony Ive, arguably the best designer in the world. We continue to believe Apple has a deep bench of talent that can continue to execute in a manner consistent with investor expectations."
Wells Fargo's Maynard Um: "While we are not keen on management reshuffling and departures in general, we believe general trends of tighter integration between hardware and software as well as OS X and iOS (or, generally, PC OS's and mobile OS's) make the management changes manageable, particularly in the hands of existing management who have respective strong track records."
There was one big negative note, from Enderle Award winner Trip Chowdry. He says the loss of Forstall is "a major blow to Apple." Chowdry likes the "skeuomorphic" design style for which many say Forstall was responsible.
He then goes on to write in his note about the many and sudden failings of Apple, of how Microsoft "has almost dislodged Apple by being the most innovative computing company that handsomely marries Touch with Stencil on High-resolution screens." He says "Microsoft and Sony Retail Stores are much better looking than Apple Stores," and he complains that "the new Palo Alto Apple store has no restrooms for customers any more."
I think I referred to him as a real Chowdry-head a few years ago. I may have to start doing that again.
Ballmer. Just... Ballmer
And finally this week, did you hear the goofy thing Microsoft CEO Steve Ballmer said? Less than a week after Apple announces 100 million iPads sold, Ballmer tells CNBC, "I don't think anybody has done a product that is the product that I see customers wanting."
It should be remembered, Ballmer was out pimping the Microsoft Surface. Still his assertion seems a bit silly in the face of 100 million iPads sold. And yes, he was talking about the iPad and every other tablet out there. AllThingsD has Ballmer telling CNBC:
I don't think anybody has done a product that is the product that I see customers wanting ... You can go through the products from all those guys, and none of them has a product that you can really use. Not Apple. Not Google. Not Amazon. Nobody has a product that lets you work and play that can be your tablet and your PC. Not at any price point.
Guess who does.
Talking of the Surface, Ballmer says, "This is a first-class tablet that people can enjoy and appreciate. It's a PC; it's a tablet. It's for play; it's for work. It's a got a great price. That product doesn't exist today."
So if the tablet is not something I want to use, why do I want a tablet/PC hybrid? I'll be curious to see how Surface sales go.
It may actually be that Ballmer can't help being dumb when it comes to Apple. BusinessInsider highlights an interview between Ballmer and The Wall Street Journal, wherein Ballmer called Apple a "low-volume" player. Asked if he'd rather have Apple's business model of controlling hardware and software than the one he has at Microsoft, Ballmer said:
We like our model, as we are evolving it. In every category Apple competes, it's the low-volume player, except in tablets. In the PC market, obviously the advantage of diversity has mattered since 90-something percent of PCs that get sold are Windows PCs. We'll see what winds up mattering in tablets.
Sorry, are they not kind of evolving that model to one like Apple's? Making the software and, at least in the case of the Surface, the hardware, too?
Additionally, as BusinessInsider points out, Ballmer is choosing to forget or ignore smartphones and MP3 players, in which Apple has been very much a high-volume player.
Plus, Apple makes money like Microsoft used to.
But, like I say, maybe Ballmer can't help it when it comes to Apple.