Inside Apple and Tim Cook’s operational genius

“It’s life-cycle week at Industry Focus! In this week’s tech episode, Dylan Lewis and Evan Niu go over the steps it takes to get an iPhone from the factory to your hand. Listen in as we explain where a few of the most important iPhone parts come from, why Apple has shifted to the contract manufacturing model thanks to Tim Cook, and some of the pros and cons of that approach,” Evan Niu writes for The Motley Fool.

A snippet from the transcript: Tim Cook absolutely hates inventory. Setting up this model and supply chain, I’ve read reports where other industry executives look at Apple’s supply chain and they’re just blown away. They’re like, “Well, we can’t compete with this.” You can order a custom-built Apple device like a Mac, or an iPhone or something. You’ll get the tracking information and it literally ships from the factory to your doorstep, in a matter of days. They build it and they ship it directly to you. That’s the kind of scenario when the purchase transaction goes like that. I mean, Apple does very little hands-on. Apple’s not physically handling the product too much if you’re ordering like that, and that’s kind of a testament, because they still get to book all the revenue and the sales. — Evan Niu

Full transcript and audio in the full article here.

MacDailyNews Take: Niu gets it.

21 Comments

  1. Inside Tim Cooks genius stock appreciation, should be the headline – hahahaha, what a joke – holding my 27000 shares until Sept, then I’m out – unfortunately this stock I’m starting to believe will go nowhere with Tim as CEO

    1. If short-term stock performance is all you need, then by all means, you need to get out of AAPL and get some small-cap start-up with great potential.

      At this point, AAPL is a long-haul stock. Because of the recent death of Steve Jobs, the market has obviously punished the stock considerably, and betting on Steve was always perceived less risky than betting on Tim, regardless of the company’s performance under either of them. Apple continues to fire on all cylinders, raking in more profit than pretty much any other company on earth. Under normal circumstances, Wall Street would be all over such a company. However, Steve Jobs’s personality (not his job performance, not Apple’s performance) was a big deciding factor for Wall Street decisions while he was alive. Hence the much higher P/E, and much higher appetite for risk. Because Tim Cook is not the same charismatic personality as Jobs was, AAPL gets punished, and it has nothing to do with the company performance or future outlook (obviously), but it has all to do with the outsized personality of Steve Jobs (about whom three biographies were written while he was still alive, and no such books exist about Cook).

      You simply need to look elsewhere for a quick stock turn-around. AAPL will eventually realise its value, some years down the road, once its destiny is completely divorced from the legacy of Jobs, but that may be too late for someone who has little patience.

      1. Nice try apologizing for Apple’s MISERABLE stock performance.

        Even the most bland utility stock outperforms Apple.

        Apple stock has destroyed an enormous amount of wealth.

        1. You either didn’t read what I wrote, or didn’t comprehend. There was no apology from anyone, for anyone or anything.

          AAPL is NOT a stock for those who have little patience. Don’t buy AAPL now, if you want to profit from it soon; sell AAPL now if you can’t wait for it to grow.

          Is that clear?

          Those who bought AAPL five years ago (while Jobs was still alive) have made plenty of money. Those who bought it ten years ago can buy a huge house with their profits. And those who got it in the aftermath of the dot-com bubble (in the early 2000s, fifteen years ago) can comfortably retire on AAPL dividends now.

          Once the infatuation in Jobs dies down, AAPL will resume its growth (that’s assuming Apple, as the company, continues to bring in profits and revenue as it did so far). There are no obvious signals today that this would change for any reason.

        2. Apple hasn’t destroyed corporate value.

          Traders have bid things down for the moment.

          Please don’t come on MDN and blame Apple for what traders are doing.

          Long term investors value the “Brand” and brand performance over time. Cook & Company have performed. Apple today is not what it was when Steve was in his prime in 2007.

        3. Actually Apple has created a lot of wealth so that’s pretty disingenuous and totally nukes your argument. A $7,000 investment turned into a a quarter of a million for me. Aren’t many stocks that could do that, let alone a “bland utility stock”.

    2. Apple makes more money than any other on the planet. If Tim Cook’s gay rights activism is to blame for that, all CEOs should go gay. Your bigotry is boring. How is he a part-time CEO, lazy, greedy, or incompetent? Just because you hate gays doesn’t mean you know shit about technology or business.

  2. Some vague background:

    When Marketing-As-Management was driving Apple into a ditch circa 1995, the company lost any sane conception of inventory control. Some force of stupid at the company thought Performa Macs (low-end cheaper quality to compete with ‘celery’ or Celeron PCs) were ever a good idea. As a result, by the end of 1996 Apple had around $1 BILLION worth of Performa Macs rotting in their warehouses. That was THE cause of the Apple $1 Billion write-down in 1997 that wrecked the company’s reputation and started their swift drop in sales and accompanying cache of ca$h, valued at $4 Billion at the time.

    One reason for Steve Job’s success when he was made Apple CEO was his knowledge of and demand for Just-In-Time (JIT) inventory control. The goal is to have NOTHING gathering dust on warehouse shelves. Everything should be moving in the supply chain at all times. You can see why Jobs liked Tim Cook, who was a master at same as well as fluent in dealing with China.

    So yeah right. Tim Cook wrecked Apple. Obviously the opposite in that Apple’s perfected system of JIT inventory is Tim Cook’s master work, among others.

      1. Or, more properly, Jobs’s (since Jobs isn’t plural of Job; it is a proper family name in singular form; hint: if you pronounce it, you write it: boys’ locker room, but boss’s desk). There has been erosion of this rule, and even some tabloid newspapers have adopted the Jobs’ as possessive rule. I think the main culprit in America is Thomas’s English Muffins (incorrectly spelt “Thomas’ English Muffins”).

          1. As a resident grammar nazi, I sometimes can’t resist…

            In all fairness, this one, as much as it may be one of my pet peeves, is a lost cause. Increasingly more and more mainstream media is treating singular nouns ending with S, especially names (Thomas, James, Jobs, Williams) as if they are plural, simply adding that apostrophe for the possessive form. At this point, the only outlets that are still doing it the old way are The NY Times, Washington Post, LA Times and The New Yorker. To me, it just makes more sense (if you write it “Thomas’ English muffins” and pronounce it “Thomases English muffins…”, where did that second S come from ??).

            I feel better now. Thanks for indulging…

            1. re “In all fairness, this one, as much as it may be one of my pet peeves, is a lost cause.”
              Nicely done on the commas, if I may say so.

      2. In my view, the apostrophe is a mean little mark — seeking to confound our possessives, twisting our tongues with sibilants — flitting here and there, messing up sentences

        — borrowed from the French, their way of indicating certain syllables they were too lazy to pronounce or write down; a printer’s dodge when he ran low on sorts in a font; my mother writing tho’ for though in her gnarled hand

        — fear of grammar nazis led to overcorrection and the spawning of atrocious fictive forms like its’

        — it’s little more than an annoying fly speck on the screen

        I like its omission from trade signs in the UK. I also like Frank Zappa’s nice appropriation of it in titling a 1974 studio album

  3. Well, I don’t car so much about iPhone. If genius Tim doesn’t like Macs I’m out…

    And, MDN, iPad lovers – try typing a comment on here with your iPad in landscape. The ads keep resetting the display.

    An iPad is not a Mac replacement.

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