KREMLINOLOGISTS looking for a new job might want to start studying the goings-on at Apple’s headquarters in Cupertino. A rejig of the firm’s top management team involving the surprising departure of Scott Forstall, a highly regarded executive who ran the firm’s mobile software operations, has sparked speculation in Silicon Valley about tensions behind the scenes at the secretive technology giant.
The defenestrations, which also involved the ousting of John Browett, the boss of Apple’s chain of retail stores, comes as the company's share price has fallen sharply since hitting a high of just over $700 earlier this year. Apple said it had made the changes to boost collaboration between its hardware, software and services teams, but the fact that there clearly has been tension between them spooked shareholders: on October 31st, the first day of trading after the news emerged, Apple’s share price dipped to just over $595.
The news of the reshuffle comes at a sensitive time for the company. Although Apple has developed an incredibly powerful “ecosystem” of devices, software and other services, it now faces stiffer competition from the likes of Google, Amazon and Samsung. The company recently unveiled a smaller version of its popular iPad to compete with rival devices from Google and others that already have modest screens. Yet the firm’s share price started falling during the unveiling of the new gizmo when it became clear that Apple intended to price it at a premium to rival offerings. Clearly the market thinks that even the Colossus of Cupertino's pricing power has its limits. The company's latest quarterly results added to concerns about its prospects when they failed to live up to analysts' expectations.
The goings-on at Apple headquarters are also being scrutinised closely because the shake-up marks the first big reshuffle instigated by Tim Cook, the firm’s chief executive, who took over the helm from the late Steve Jobs. There has been plenty of speculation about the reasons for the high-level departures. Mr Forstall reportedly clashed with other executives at Apple, notably Jonathan Ive, the firm’s hardware design chief. He was also responsible for the flawed Apple maps offering in the latest release of Apple’s mobile operating system and is said to have refused to sign a public apology acknowledging its failings. Mr Browett, who arrived at Apple earlier this year after running Dixons, a British electronics retailer that does not enjoy anywhere near the same kind of prestige, raised eyebrows by seeking to cut costs with a new work rostering system for Apple's stores that triggered rumours of layoffs.
