If you and a friend are being chased by a bear, you don’t need to outrun the bear — you just need to outrun your friend.
Back in 2017, Apple’s former head of software, Avie Tevanian, used the metaphor to defend Tim Cook’s leadership. While innovation wasn’t happening at the same pace as it did under Steve Jobs, “they are staying ahead of the competition”, he said.
But eight years on, the metaphor no longer defends Cook; it indicts him. The bear now has a name — artificial intelligence — and it is defining the next computing era. Microsoft, mocked in Apple’s “Get a Mac” ads, now leads in valuation, profitability, and product vision. Alphabet has pulled ahead in earnings. Meta shares just hit an all-time high as the company talks up “Superintelligence”. And Nvidia, the chipmaker powering the AI boom, is sprinting so fast it’s now worth $1.2 trillion more than Apple.
Supporters of Cook, when challenged, used to be able to point to Apple’s unmatched supply chain, the success of the Apple Watch and AirPods, and the enduring dominance of the iPhone. They could also highlight Cook’s statesmanship. Donald Trump, campaigning in 2016, said he’d force Apple to build products in America and once urged his supporters to “boycott Apple”. But Cook gained his ear, achieved important tariff exemptions, and avoided backlash from Beijing even after Washington attacked Huawei. The idea that Cook, who was appointed CEO in 2011, might step down was anathema in January 2022, when Apple first reached a $3 trillion market valuation. Profits during his tenure had soared 3.7 times and shareholder returns had increased twentyfold.
But Apple has since stagnated. Annual revenue growth in the past three fiscal years averaged just 2.3%, compared with between 11% and 14% for Alphabet, Amazon, Meta and Microsoft, 24% at Tesla, and 80% at Nvidia. Apple’s market valuation is still enormous, at $3.1 trillion, but it has inched up less than 5% in three-and-a-half years.
As a result, fringe murmurings that Cook might no longer be the right CEO have moved from internet forums to investment bank notes and news segments on CNBC and Bloomberg TV. Their main criticism — that Cook isn’t a product visionary — has always rung hollow; his mandate was to scale.
While he has achieved growth, innovation has tanked. The iPhone’s design has barely changed since 2019, when Jony Ive departed as design chief (a position that remains vacant). Last year, Apple killed its decade-long electric car project just as Chinese rivals Huawei and Xiaomi expanded their own. Apple’s only meaningful new product this decade is the Vision Pro, a $3,500 “mixed reality” headset released to underwhelming demand in early 2024. The device’s technological capabilities are a marvel, but the fact that barely any content exists for it reflects a lack of leadership and strategic vision.
“While he has achieved growth, innovation has tanked.”
Today, then, marks a symbolic milestone: Cook has now matched Steve Jobs for his time as CEO — 5,090 days. But whereas nobody was clamouring for change at this point in Jobs’s reign (absent his health concerns), they are coming for Cook on several fronts.
Apple’s AI missteps are the most glaring. Siri, once a pioneer among voice assistants, now feels “as dumb as a rock”, to quote Microsoft’s Satya Nadella. When Cook finally unveiled “Apple Intelligence” in June 2024, the promise was an assistant that could mine texts and emails to deliver personalised answers, not by taking data from the cloud, but mining for data “on device”. That’s something ChatGPT can’t do on the iPhone, because apps are sandboxed. Apple, though, which controls the Operating System, chips and hardware, can grant Siri access.
If Apple can make it work, it could offer 1.5 billion iPhone users a compelling reason to upgrade their device every 24 months, as on-device chipsets improve to keep up with data processing on cloud servers. More upgrades mean more revenue, justifying Apple’s high valuation. But, says Craig Moffett, partner at MoffettNathanson, “that whole logic disappears if Apple ends up capitulating to a cloud-based model”.
So it’s disconcerting that 15 months after the announcement, a personalised Siri still doesn’t exist, the ads promoting it have been pulled, and Apple has been forced to acknowledge it doesn’t know when the features might be ready.
But AI missteps and product innovation aren’t the only problems.
Cook’s heavy bet on China is also looking like a liability. He has long been heralded as the operative who “fixed” Apple’s supply chain. But in the process, the company invested hundreds of billions of dollars into Chinese manufacturing, helping elevate the same local firms that now threaten its dominance. In the June quarter, Apple’s market share in China was fifth, after Huawei, Vivo, Oppo and Xiaomi, according to Canalys.
Efforts to shift production to India have been slow and superficial, centred on final assembly rather than replicating the depth and breadth of China’s industrial clusters. And Beijing has used its leverage, too, blocking the export of sophisticated machinery for India’s production lines, and restricting visas for Chinese engineers who could help get them up-and-running.
Even Cook’s once-vaunted diplomacy appears diminished. Cook was known as the Trump Whisperer in the President’s first term, but whatever he was whispering never resulted in much. “Tim Cook has continually asked for more time in order to move his factories out of China,” Trump trade advisor Peter Navarro said this month. “It’s the longest-running soap opera in Silicon Valley.”
Compare that with Jensen Huang, Nvidia’s CEO. Huang publicly and substantively lobbied against an export ban on AI chips to China, and persuaded Trump to reverse course on a signature policy. He also joined the President on a diplomatic trip to the Middle East. “Tim Cook isn’t here,” Trump quipped in Riyadh, eyeing Huang at an investment forum, “but you are.”
Asked what Apple might do to counter the threat from AI-first companies, many analysts point out that the iPod, iPhone, and iPad were all “late” in their respective categories. True, but each of those examples are from the Jobs era. It’s tough to believe that Cook has a secret plan to dominate the AI Wars as his top minds defect to better-paying jobs at Meta.
Is it too early to call for Tim Cook’s resignation? Apple remains immensely profitable and has a fortress balance sheet. But too early is less risky than too late. And what good is a war chest if you don’t use it? As AI transforms tech, Apple looks like a complacent observer. Even in its greatest moat, hardware, Chinese groups are out-innovating with better designed and even more expensive smartphones.
The future doesn’t slow down for anyone. And a few months before Apple turns 50, the bear is catching up.
