Apple is facing an unprecedented wave of executive departures. Also: The company will shake up its sales operations with a focus on India, a yellow iPhone arrives, and Amazon’s Ring and Sonos introduce key new products.
The Starters
Apple Inc., known for its stability at the top, is facing a new challenge: an unprecedented level of turnover in its executive ranks.
Over a stretch that began in the second half of 2022, Apple has lost about a dozen high-ranking executives. Most of these people carried the title of vice president, which is just below the senior vice president level that reports to Chief Executive Officer Tim Cook. They are some of the most important figures at Apple, responsible for day-to-day operation of many core functions.
The departures included vice presidents overseeing such fields as industrial design, theonline store, information systems, Apple’s cloud efforts, aspects ofhardwareandsoftwareengineering,privacy matters,sales in emerging markets,subscription services and procurement. In all, that’s 11 key people — a far higher amount of turnover than we’ve seen in recent memory.
In past years, Apple may have lost one or two VPs during a 12-month window, like when the head of its self-driving car projectboltedfor Ford Motor Co. in 2021. To have such a large group leaving now — regardless of whether they retired, were pushed out, quit or left for another company — is notable.
Of course, there has been an influx of executives as well. Apple brought in a newchief people officer to take over duties held by retail boss Deirde O’Brien and a chief information officer to replace Mary Demby and David Smoley.
But in most cases, the departures have led Apple to redistribute responsibilities or promote people from within:
- Online store VP Anna Matthiasson was replaced by a direct report, Karen Rasmussen.
- The responsibilities of Tony Blevins, who ran procurement, were shifted to his peer, Dan Rosckes, and a promoted direct report, David Tom.
- The sales VP in charge of emerging markets, Hugues Asseman, saw his role split between India Managing Director Ashish Chowdhary and Europe Senior Director Juan Castellanos.
- Hardware executive Laura Legros’s duties were shifted to a peer, Yannick Bertolus, the vice president of hardware integrity. His role was then assumed by Tom Marieb, a promoted direct report.
- Software VP John Stauffer was replaced by two direct reports: Jeremy Sandmel and David Biderman.
- The role of services honcho Peter Stern was split between Apple Music VP Oliver Schusser, service design head Robert Kondrk and Corporate Development VP Adrian Perica.
- Cloud chief Michael Abbott’s role will be assumed by Jeff Robbin, vice president of services engineering, starting in April.
In those examples, Apple had successors who could step up — or at least some executives who could take on the departed employee’s responsibilities. But in the case of Evans Hankey, the company’s outgoing head of industrial design, Apple couldn’t find a replacement. Instead, it’s having the individual members of the design team report to Chief Operating Officer Jeff Williams. Similarly, Apple didn’t replace its chief privacy officer.
Most of the recent departures were of Apple veterans, people who have been at the company 15-plus years. But in the case of its design and services vice presidents, among others, Apple lost executives in the prime of their careers who could have, one day, potentially reached the senior vice president level.
Moreover, I’ve been warned that this flurry of exits may just be the beginning. There are quite a few vice presidents at Apple who have been there for decades and could retire in the next few years.
Apple’s highest layer is in a similar position: 10 of its top 12 executives are about the same age. Half of them joined before the year 2000, and the age gap between CEO Cook and his most likely successor, operating chief Williams, is only about two years.
Longtime Apple mainstays who helped reinvent the company are also nearing the end of their careers. Former marketing chief Phil Schiller is stepping into a smaller Apple Fellow role focused on the App Store and media events, and Dan Riccio is shedding all hardware engineering responsibilities except the mixed-reality headset team.
The lower ranks could be ripe for turnover as well. People within Apple believe that some executives at the director and senior director levels (the two management tiers directly below vice president) also are considering stepping down in the not-too-distant future.
The pace of departures may stem in part from the growing burden of responsibilities placed on managers, in addition to other factors:
- The company has become more bureaucratic over the years, especially when it comes to product development.
- It’s a massive global corporation, and that can mean it’s difficult to make an individual difference. Internal politics and cross-department wrangling can make it all the harder to navigate.
- Resources have been shifted to longer-term initiatives, some of which may take years to be ready (if they ever are). Some managers were probably upset about losing people to endeavors like the company’s mixed-reality group and self-driving vehicle team.
In some cases, Apple vice presidents wereconsidered to be candidates to replace the senior vice president of their organization — a move that can come with a four- or fivefold pay increase. But they were likely never given clarity on if or when that may happen. In the case of Hankey, the outgoing design leader, there was said to have been a lack of empowerment — including the ability to override engineering decisions made by other departments.
Apple’s structure itself is a source of stress. The company is organized functionally, which means that teams contribute to all its big products. For instance, a vice president of hardware engineering would be helping oversee parts of the iPhone, Apple Watch, iPad, Mac and AirPods. And a software engineering leader would be running teams that contribute to iOS, macOS, watchOS and tvOS, which operate on dozens of hardware products.
That organization made sense in the early days of Apple, but has led to increased product development delays, resources being spread too thin, and additional engineering complexity. There are benefits too, of course. It lets Apple put its best minds on every item in the portfolio.
Finally, let’s not forget one of the biggest reasons people leave a job: money. Apple’s stock fell nearly 30% last year, following three years of major gains. That’s weighed on compensation. In the case of an Apple vice president, stock can be well over half of pay.
On that front, even Cook has taken a hit. On Friday, Apple shareholdersapprovedanew pay packagethat included a roughly 40% reduction. Over 80% of his 2023 income will be in stock, with 75% of that tied to company performance.
But nobody should be truly worried about the CEO going anywhere soon: His shares continue to vest into 2027.
The Bench
Apple puts a new focus on India. The company is shaking up its sales operations abroad with the goal of giving increased prominence to India. The nation has quickly become key for Apple: As revenue fell globally during the holiday quarter, it actually increased in India.
With developed economies growing more slowly, Apple is going to need to turn more aggressively to emerging markets. That will be helped by organizational changes. The head of the India business — Ashish Chowdhary — is being promoted to report directly to sales chief Mike Fenger.
This marks the first time that India will become its own sales segment for Apple, splitting the country off from Eastern Europe, the Middle East, Africa and the Mediterranean.
It’s not a given that India will ever become a China-like market for Apple, but that’s certainly the hope. “We are, in essence, taking what we learned in China years ago,” Cook said earlier this year, “and bringing that to bear.”
A yellow iPhone 14 arrives.There’s a new iPhone, but there’s also no new iPhone. As is typical for Apple during this spring season, the companylaunched a new iPhone color — in this case, yellow — while keeping the rest of the device the same.
I’m not a fan of the color at all, but it certainly has gotten some people buzzing about the iPhone 14 months after its debut. And that’s really the whole point of this exercise.
For some history, Apple previously popped outProduct Red, purple and green iPhones around March or April in past years. With the purple color, Apple kept the new shade exclusive to the lower-end iPhone 12s. But last year’sgreen came in two variations: one for the lower-end iPhone 13s and one for the Pro models. This time around, the iPhone 14 Pros didn’t get a new color.
The fact that the company already debuted the yellow model — plusApple Music Classical — rules out the possibility of a big launch event in the near future. That fits with Applepushing back the debutof its first mixed-reality headset until June at WWDC.
Amazon.com Inc.’s Ring debuts new battery-powered doorbell while Sonos Inc. revamps its speakers.If you’re a consumer tech fan, this past week was one of the more interesting ones so far this year. Ring’s new battery-powered model is its first video doorbell in two years, while Sonos launched two products simultaneously for the first time in its history.
The doorbell is nothing new if you’re familiar with Ring’s offerings, but it has afew significant benefits: longer battery life, higher-resolution recording and head-to-toe video. The battery life piece is key: I used to have an earlier model and I would have to charge it weekly or lose security. Here’s hoping this one fares better.
Sonos’snew offerings are ground-breakingfor the company. The Era 100 replaces the Sonos One, bringing a fresh design and stereo audio. The Era 300, meanwhile, is a high-end spatial audio speaker designed to play content from Amazon and Apple Music. I’ll be curious to see how it compares with thesecond-generation HomePod, which also plays spatial audio.