Tim Cook's secret weapon that turned Apple into a $4 trillion Apple empire

By Christine Ji

Tim Cook will leave the CEO post after 15 years marked by supply-chain dominance

Tim Cook will be stepping down from Apple's CEO post in September.

Tim Cook may not have had the same flash as Steve Jobs, but he wielded an unassuming superpower that helped grow Apple into a $4 trillion juggernaut.

Cook first joined Apple (AAPL) in 1998 and assumed the CEO role in August 2011. Before becoming CEO, Cook had established a reputation for himself as a shrewd master of Apple's supply chain. One of his first moves at the company was pioneering a just-in-time inventory model that helped turn a struggling Apple around by aligning the company's raw-material orders with production schedules, slashing Apple's inventory on hand.

Cook's learnings from his time as Apple's chief operating officer helped him expand the company's services business and geographic footprint once he assumed the CEO position. He also drove the company's transition to custom silicon, allowing Apple to have more control over its hardware and software ecosystem through the use of in-house chips.

Cook's expertise in logistics helped the company navigate major supply-chain disruptions, such as the pandemic and various iterations of tariffs. Cook moved swiftly to mitigate the impact of pandemic shutdowns by diversifying Apple's supply chain and shifting production of iPhones from China to India. In doing so, he struck a delicate balance, as he had to shift production in a way that didn't alienate Chinese consumers or cede market share to domestic Chinese competitors.

Handling volatile tariffs required cultivating a savvy business relationship with the man behind them, President Donald Trump. Last August, Apple announced a $2.5 billion commitment to produce glass for its products in Corning's (GLW) Kentucky facility, signaling Apple's intent to invest in American manufacturing. Cook also gifted Trump a custom Apple plaque with a 24-karat gold base. For Cook's efforts, Apple was rewarded a tariff exemption on imported semiconductors and chips.

"Tim Cook had an AMAZING career, almost incomparable, and will go on and continue to do great work for Apple, and whatever else he chooses to work on," Trump wrote on Truth Social. "Quite simply, Tim Cook is an incredible guy!!!"

Now Cook's supply-chain prowess seems to be helping Apple as the consumer-electronics industry faces a severe memory shortage. Apple is reportedly buying large quantities of mobile dynamic random-access memory to squeeze competitors. Meanwhile, Apple isn't letting the memory crunch stand in the way of its objectives. Even in the face of soaring component costs, the company launched its budget laptop, the MacBook Neo, earlier this year.

The MacBook Neo is a prime example of Cook's legacy, Max Weinbach, a technology analyst at Creative Strategies, told MarketWatch. While Apple's vice president of hardware engineering, John Ternus, was the hardware brains behind the product, developing a budget laptop required the company to create its own supply chain and processes. Apple utilized resourceful strategies such as repurposing iPhone 16 chips.

"A lot of people call him a supply-chain guy and Ternus the product guy, and while that's true, the products couldn't exist without the supply chain," Weinbach said of Cook.

Jobs "created the special products, while Tim Cook made sure that the company could make so many of them that everyone could buy one and that Apple would make very large profits while doing so," Richard Windsor, founder of the research firm Radio Free Mobile, wrote in a Tuesday note. "He has been incredibly effective and was the right leader at the right time."

Through Monday's close, Apple shares returned more than 2,300% under Cook's tenure, beating out the S&P 500 index's SPX nearly 700% total return over the same period. Cook grew Apple's appeal to investors, including Warren Buffett's Berkshire Hathaway (BRK.A) (BRK.B), which made the surprising move to invest in Apple back in 2016 after famously avoiding flashy technology plays.

Read: Apple CEO Tim Cook to step down after overseeing 1,900% stock surge. His successor faces big challenges.

Cook's successes have been reflected in Apple's financials. The latest iPhone 17 line, especially the Air, has been a smash hit in China. Revenue from China rose 38% in the December quarter relative to a year before, fueling Apple's best quarter of iPhone sales ever.

Thanks to Cook's efforts, Ternus is "a company in very good condition," according to Windsor. Cook will step down on Sept. 1, at which point Ternus will take the helm.

See more: Apple turns 50. Here's how it can shake its midlife crisis.

-Christine Ji

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

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