Apple ousts two top execs over missteps
SAN FRANCISCO — In the biggest management shake-up since Tim Cook took the helm, Apple has ousted two top executives blamed for a pair of embarrassing missteps.
Apple Inc. said Scott Forstall, its longtime executive and a protege of co-founder Steve Jobs, was leaving the company. As head of the mobile software division, Forstall oversaw the iOS operating system that runs the best-selling iPhone and iPad that together account for the bulk of Apple’s sales.
But the 15-year Apple veteran also was responsible for one of the company’s highest-profile gaffes: replacing Google Inc.’s maps with Apple’s own faulty mapping software. The rare strategic blunder that caused a global uproar prompted a public apology from Cook.
Also departing is John Browett, who joined the company in April to lead retail operations. The former chief executive of British electronics chain Dixons took over for Ron Johnson, who helped create the Apple stores and left to become chief executive of J.C. Penney Co.
Browett never jelled at Apple, analysts said. In August, he was forced to issue an apology and reverse course on a new store staffing plan.
Fortune magazine called the management reshuffling the most significant since Jobs pushed out chief executive Gil Amelio in 1997.
Apple is essentially centralizing power in the hands of Cook and Jonathan “Jony” Ive, the company’s industrial design guru, Piper Jaffray analyst Gene Munster said.
Ive, who will oversee the company’s software and hardware teams, now has control over the look and feel of Apple devices, the same expansive role and power that Jobs had before he died.
“Tim Cook was always Steve Jobs’ right-hand man. Jony Ive was his golden boy,” Munster said.
The departures come as Apple faces growing competition from rivals including Google, Amazon.com Inc. and Microsoft Corp. that has dragged down its stock price, analysts said. Apple is also looking to merge its operating system for mobile devices and personal computers, which is a task better handled by one person than two, they said.
“Tim Cook needs to make these kinds of changes occasionally to keep forward progress,” BGC Partners analyst Colin Gillis said.
Cook, who officially took over from Jobs as CEO last year, is putting his own stamp on Apple, which is under heightened pressure to produce the kind of must-have products that made Apple the world’s most valuable company.
Craig Federighi, who is now in charge of the Mac operating system, will add iOS, Apple’s operating software for mobile devices, to his responsibilities. Eddy Cue, who runs Apple’s online services, will take over Siri and Maps.
Retail store operations will report to Cook while the company searches for a replacement. Forstall’s departure will also shift greater responsibility to Bob Mansfield, who retired this year but returned to focus on “future products.”
Apple said Monday that Mansfield would lead a new group, Technologies, which combines all of Apple’s wireless teams.
“Each of those guys have picked up significant responsibilities that clearly make the company stronger,” said longtime Apple analyst Tim Bajarin, president of Creative Strategies. “They are streamlining the management of the company and the decision-making process.”
Forstall, who started working for Jobs straight out of college and was once considered a possible successor, was conspicuously absent from last week’s unveiling of the iPad mini.
He also sold 95% of his stock holdings in Apple earlier this year. Forstall, a polarizing figure within Apple known for clashing with underlings and fellow executives, will officially leave next year but will continue to serve as an advisor to Cook, the Cupertino, Calif., company said in a statement.
Apple shares, which closed Friday at $604, have fallen 14% since closing at a record $702.10 on Sept. 19. There was no trading Monday because of Hurricane Sandy.
The company made the surprise announcement as the hurricane was bearing down on the East Coast. Analysts said they suspected that the timing was strategic to give investors the opportunity to digest the news.
One Apple investor said he didn’t need extra time to consider the effect of the news on the company.
“Some have wondered out loud if Tim Cook would hold staff to the same standards as Steve Jobs did in terms of quality of execution. Today’s news suggest that is the case and that is a positive for Apple investors,” said Michael Yoshikami, CEO of Destination Wealth Management.
