CEO Cook Remakes Apple

Mobile software chief Forstall and retail chief Browett to exit.

Apple Inc. said mobile software head Scott Forstall and retail chief John Browett are departing as Chief Executive Officer Tim Cook embarks on a sweeping management overhaul at the world’s most valuable company.

Forstall will leave next year and serve as an adviser to Cook until then, Cupertino, California-based Apple said yesterday in a statement. Executives Jony Ive, Eddy Cue, Bob Mansfield and Craig Federighi will take on added management responsibilities, the company said. Forstall was pushed out, according to a person with knowledge of the dismissal who asked not to be identified because the matter is private.

Forstall oversaw products such as mapping software and the Siri voice-recognition tool, which met with criticism. He also frequently clashed with other managers, people with knowledge of the matter have said. Cook, who succeeded co-Founder Steve Jobs last year, is revamping leadership as Apple’s stock price sags and competition accelerates from rivals including Google Inc., Microsoft Corp. and Amazon.com Inc.

“It’s a very big move and one that was necessary to tighten up the management decision-making process,” said Tim Bajarin, president of Creative Strategies, a technology consulting firm. “Apple needs to work much faster as the competition heats up.”

Forstall was responsible for the mapping software introduced last month that was widely faulted for bad directions and missing features, marring the debut of the iPhone 5. Forstall had extolled the maps’ features before its release at a software developer conference in June.

Cook dismissed Forstall after he refused to sign a public letter to Apple customers apologizing for the mapping software’s flaws, according to a person briefed on the matter. Cook signed the letter instead.

The management changes leave Ive, who already heads industrial design, with more authority over the vision and details of Apple’s products. He takes on responsibility for so- called human interface, the software that governs how customers interact with Apple devices. Before he died last year, Jobs controlled the experience, melding input from disparate teams. In the new structure, Ive takes on that role.

“This change makes Jony the creative integration point for both hardware and software, which was one of the most important roles that Steve played,” said Bob Borchers, a former marketing executive at Apple who’s now a venture capitalist at Opus Capital.

A protege of Jobs, Forstall has overseen the software running the iPhone and iPad, best-selling products that account for more than two-thirds of Apple’s revenue. He was also a polarizing figure within Apple’s management ranks, people with knowledge of the company told Bloomberg Businessweek last year.

 

‘Friction’ Conduit

 

Software engineers and designers who worked for Forstall were loyal to him and ranked among the hardest working at the company, the people said. Yet his management style also led a several senior executives to leave Apple because they found working with Forstall difficult, several former Apple employees said. The mapping missteps were a final straw, people said.

“Forstall was effectively a component of friction in Apple’s otherwise very collaborative senior management structure,” said Charlie Wolf, an analyst at Needham & Co.

Forstall also led the development of Siri, which some customers said doesn’t work as well as Apple had advertised.

Browett joined Apple in April, after being hired in January from his post as CEO of Dixons Retail Plc, the largest U.K. consumer-electronics retailer. Apple had searched for more than seven months to find a replacement for Ron Johnson, who left last year to run J.C. Penney Co.

In August, after Apple had reduced staffing at some retail locations, cut hours and limited store transfers under Browett’s leadership, the company backtracked on the new policies, calling them a “mistake.”

“This guy was a diametric opposite of what the Apple stores are trying to do,” Wolf said. “The question is not that he was dismissed, but why was he hired.”

Apple shares have slumped 14 percent since closing at a record on Sept. 19.

Cook’s other changes include giving Cue responsibility for Siri and maps, which puts all the company’s online services in one group, Apple said. Federighi will head up iOS -- the mobile software that runs iPads and iPhones -- as well as the Mac operating system, merging the mobile and desktop teams.

Mansfield’s new Technologies group will combine Apple’s wireless teams as well as the semiconductor groups.

 

Bloomberg News

Page 2 of 2
Comments