Did Tim Cook just pay $3 billion for his successor, Jimmy Iovine?

“In December 1996, then-Apple CEO Gil Amelio paid $400 million to acquire Steve Jobs’ NeXT. Jobs’ second coming as CEO turned Apple into a powerhouse,” Peter Cohan writes for Forbes. “And 18 years later, Tim Cook spent $3 billion — 2% of its cash — to acquire Jimmy Iovine’s Beats.”

“Will Iovine replace Cook like Jobs replaced Amelio?” Cohan writes. “If so, this deal could be a catalyst for Apple stock.”

“Beats’ co-founders Iovine and Dr. Dre will work for Apple. According to the Times they will report to Apple’s content chief, Eddie Cue, who reports to Cook. But with all the lavish praise of Iovine’s ability to inspire talent to write hits and to envision how the music industry will evolve, he evokes memories of Jobs’ creative genius,” Cohan writes. “What Apple really needs is a visionary leader who can tap enormous new profit pools. And Tim Cook is not that person.”

“If Iovine can convince Apple’s board that he can do that — perhaps Cook can find comfort in the role where he used to excel — making Apple’s trains run on time while Iovine figures out where they should go,” Cohan writes. “Unless Tim Cook just bought his successor for $3 billion, my guess is that Iovine will not be satisfied reporting to Cue and will leave once he gets his money.”

Read more in the full article here.

MacDailyNews Take: The lack of respect afforded Tim Cook in some quarters is appalling.

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  1. Woodrow Wilson had a saying: ” I not only use all the brains that I have, but all that I can borrow.”

    Apple is no longer the company Steve Jobs found and later rescued. Rather, it’s a global presence facing far different challenges.

    Cook is hiring extremely talented people while winnowing out those not capable of taking the franchise to the next level. Iovine, like Ahrendts and many others, are wonderful brains that he has “borrowed.”

    Cook continues to impress.

    1. Excellent point. This isn’t your father’s Apple. Somehow I don’t envision Jimmy running this huge corporation. Having a great deal to do with some portion of it perhaps? But it’s way too big and complicated for Jimmy. And I’m not sure how well Jimmy is going to work out anyway? Steve Jobs was a loose cannon but he and the Woz started Apple. So he knew the company inside and out and knew exactly what it needed when he returned. He was there at the beginning. Let’s see if Jimmy makes it a year. I believe he will be kept on a bit of a short leash. Besides, music isn’t where it’s at for Apple going forward. Jimmy was just brought in to bolster iTunes radio. He’s not going to run the company. Video and monetizing all those credit cards is where it’s at for Apple. Along with the automobile and home automation these things will surpass music easily in the future. I think you’re correct about Tim hiring the best talent for such a huge company as Apple. A huge, diversified global corporation. I don’t see Jimmy or Angela running all that.

  2. I wonder what kind of retention bonus is built into the new acqui-hire of the new dream team Jimmy n’ Dre?

    Additionaly, how do you manage this talent with such out-sized egos?

  3. While I don’t know if the acquisition is good or bad, and it’s too soon to make that call, I like that Tim Cook knows his lack of strength.

    Steve Jobs was passionate about music. I don’t get that vibe from Tim, so he hired (read: bought) people that are. Whether that works out or not remains to be seen.

    People need to stop expecting Jobs-behavior from Cook. That just won’t ever happen.

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