SOMETIMES A COMPANY encapsulates its times. Ford and its Model T captured the go-getting mood of the Roaring Twenties. IBM embodied the techno-optimism of the first computer era in the 1970s. General Electric epitomised the cutthroat capitalism of the 1990s. For much of this century the company of the moment has been Apple. The iPhone, a sleek gateway to the all-consuming app economy, has been as evocative of the zeitgeist as big hair was of the 1980s. So has Apple’s embrace of globalisation and, especially, of China—as a place first to make gadgets, then to sell them.
The iPhone, a sleek gateway to the all-consuming app economy, has been as evocative of the zeitgeist as big hair was of the 1980s (Photograph: Getty Images)
For the past 15 years this icon of the digital era and free trade has been led by Tim Cook. It may have been Steve Jobs, his legendary predecessor, who dreamt up the iPhone, but it was Mr Cook who put one in 1.5bn pockets, making the Apple logo ubiquitous from San Francisco to Seoul. Apple’s market value has grown 11-fold on Mr Cook’s watch as, counting everything including dividends, he has stuffed some $4.6trn into the pockets of Apple’s shareholders. That is over $850m for every day of his long tenure.
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On April 20th Apple said that this tenure will end in September. Mr Cook’s successor, John Ternus, must decide if this winning formula—smartphones + global supply chains = $1trn in cumulative net profit over 15 years—needs updating for the age of artificial intelligence (AI) and geopolitical fracture. It is a tough call. And it matters beyond Apple.
When Mr Cook took over, his strategy was a bet on the future: of technology and of the global economy. Technologically, Apple gambled that, as Jobs envisioned, the smartphone would be the principal interface between people and the digital world. That proved correct. As a result, Mr Cook did not himself oversee the launch of any product as transformative as the iPhone. AirPods are popular and Apple sells more watches than Switzerland, but these are mere smartphone accessories. The ambitious idea of an iCar was quietly scrapped. Who remembers anything about the Vision Pro, apart from its $3,500 price tag? But by continuously improving the iPhone, expanding the range of phones and selling them in more places, Mr Cook built an empire.
Apple’s twin economic wager, on global supply chains and China, reflected the extent of globalisation. By the 2010s, most goods-trade barriers had gone. Each year countries were exchanging products and services worth nearly 60% of world GDP, up from around 40% in the 1990s. China went from 10% of the global economy in 2011 to 17%, from technological supplicant to a frequent leader, and from four Apple stores to 50.
Mr Ternus, an Apple insider for many years, seems inclined to stick to the same approach. The danger is that AI and trade wars make Apple a bet on the past. It will thrive if making AI models is less lucrative than selling AI applications and the hardware on which they run; if trade barriers reconfigure cross-border supply chains rather than destroy them; and if relations between China and the West are strained but not ruptured.
For now conservatism is paying off. iPhones can still be “Designed by Apple in California—Assembled in China” or, increasingly, “in India”. Apple must get its AI act together, but eschewing model-making has mostly kept it out of a $3trn data-centre binge which may end in huge losses. Its market value is not far off an all-time high of $4.2trn. It is easier than ever to see how all that could change. But many elements of the globalised, consumer-centric world Mr Cook’s Apple helped create are worth preserving. With luck, they will endure.
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