5 Ways Apple Can Stay Great in the Post-Jobs Era


Will Apple (AAPL) keep building insanely great products after Steve Jobs is gone?

Investors seem to think so. Big Money buyers devoured Apple shares in the days after the iconic leader's resignation, pushing the stock up more than 7.7% for the week -- 3 percentage points better than the S&P 500's 4.7% gain.

Regardless of whether the optimists are right to buy at these levels, new boss Tim Cook faces a difficult task in keeping Apple familiar even as he makes improvements. How to measure success? Here are five ways to know whether this chapter of the iEmpire's history could be as good as its last:

1. Engagement. Jobs rarely needed to, or wanted to, show up for quarterly conference calls or investor meetings. Cook doesn't have this luxury. Investors need to see and hear him and hear how he speaks about the company in his new role. Does he admit mistakes? Is he candid about the limits of what Apple can do? These are the signs of a confident leader who's in control.

2. Details. If there's one thing Jobs was known for, it's minding the details. He'd call disgruntled customers and oversee minor color changes. Cook either needs to be this obsessive or surround himself with enough compulsive teammates to ensure the "it just works" design culture that Jobs fostered remains intact. Nothing could kill the business -- and investor returns -- faster than a failure to do this.

3. Ubiquity. Apple's products are quickly gaining a massive following in Asia -- China, notably. Cook needs to build on success there by increasing access, either through deeper engagement with the coders who create iPhone, iPad, and Mac software, or by opening new retail stores and adding distribution partners. Either way, now is the time to expand the iEmpire.

4. Investment. Skeptics love to lampoon Apple for hoarding more cash than the U.S. government. While they do have a point -- Apple probably doesn't need $76 billion in liquid assets -- Cook, as chief operating officer, has overseen years of big gains from reinvesting in the underlying business. Expect him to continue this tradition as CEO by betting more on successful initiatives, such as iPhone development and expansion of Apple's retail footprint.

5. Humility. While it may seem at odds with the other four above, Cook and his team also need to respect that the Apple they're running now is not the same one they've worked for in years past. Jobs won't be there on a day-to-day basis tracking details. Paying homage to the past will allow Cook to keep Apple familiar to customers and partners, even as he puts a fresh face on the business.

A Crowded Tightrope

Sound difficult? No doubt, but this is exactly how another former chief operating officer -- Sam Palmisano -- handled the transition at IBM (IBM) when he took the reins from Lou Gerstner in 2002.

Gerstner transformed Big Blue in a manner similar to the way Jobs has turned Apple around. Investors who bought at the beginning of Palmisano's reign are up more than 60% on the S&P 500 during one of the most tumultuous decades in U.S. stock market history.

Cook may not meet the same standard. At the very least, he faces a number of competitors hungry for a slice of the smart mobile device market Apple has feasted upon in recent years. Microsoft (MSFT), Nokia (NOK), Research In Motion (RIMM), and most of all, Google (GOOG), are spending billions to invade the iEmpire's territory.

But if the parallels do hold and COO Cook graduates to new heights as CEO Cook, we'll remember Steve Jobs not with longing but with love. Love for how he saved the business he helped to create, and the years he spent setting Apple on a path for sustained success.

Motley Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He owned shares of Apple, Google, and IBM at the time of publication, which he plans to keep for the foreseeable future. The Motley Fool owns shares of Google, Microsoft, Apple, International Business Machines, and Research In Motion. Motley Fool newsletter services have recommended buying shares of Apple, Google, and Microsoft, as well as creating a bull call spread position in Apple and Microsoft.

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