Apple Inc., formerly known as Apple Computer Inc., is one of the Big Four technology companies alongside Google, Microsoft and Amazon. On August 2, 2018, Apple became the first company in the world to be valued at $1 trillion. While Apple's value has dropped since then, the company continues to bring popular new products to market and remains one of the largest companies in the world.
The owners of Apple are shareholders, large and small. Some are part of the company leadership team or on its board of directors. Others are members of the public who invested in Apple stock. Apple's CEO is currently Tim Cook, but he does not own the company.
Apple's culture of innovation and smart strategies are known worldwide, and this culture is rooted in large part in its founder and, for a long time, CEO, Steve Jobs. Although Steve Jobs passed away on October 5, 2011, his legacy at the company lives on, even as the company has changed and evolved in the intervening years.
Apple was founded in April of 1976 by Steve Jobs, Steve Wozniak and Ronald Wayne. The company's first product was Wozniak's Apple I personal computer. Wayne sold his share back to the company in 12 days, while Steve Jobs and Steve Wozniak stayed on, incorporating the company as Apple Computer Inc. in January 1977.
Sales grew quickly, including those of the Apple II personal computer. Jobs and Wozniak hired computer designers, started a production line and took the company public in 1980. Apple began to turn out products with a focus on design and ease of use, including the graphical user interfaces (GUIs) and pointing devices — mice — that the company popularized. These early computers followed the nascent user interface designs created at Xerox PARC. Jobs took inspiration from Xerox PARC in popularizing that GUI and the use of the mouse to navigate it.
In 1984, Apple debuted the Macintosh, the first personal computer to be sold without a programming language and the first mass-market PC with an integral GUI. The launch of the Macintosh was hailed by the now-famous "1984" advertisement, airing during that year's Super Bowl and directed by Ridley Scott with a budget of $1.5 million.
While sales of the Macintosh were initially good, they sagged due to its technical limitations, and the company entered a period of less successful ventures and internal contention. Steve Jobs' leadership style at this time was chaotic and confrontational until he resigned in September 1985, along with a number of other Apple employees, to found NeXT.
Apple struggled with sales and product development through 1997, when — weeks away from bankruptcy — Apple purchased Job's company for its NeXTSTEP operating system and to bring Steve Jobs back to a leadership position at Apple. During his time away from Apple, Jobs learned many lessons about not only managing a company successfully but also about what drives innovation and how to anticipate consumer needs.
Return of Steve Jobs
The return of Steve Jobs marked Apple's return to profitability with the iMac, the Apple Store, and new versions of Microsoft Office for the Macintosh. After that, Apple went on to develop numerous pieces of hardware and software, as well as services, including the iPod and associated iTunes Store.
With the switch to Intel processors in 2005, Apple became a major contender in the laptop sector. In 2007, Apple began its long line of successes with mobile devices, including the now-ubiquitous iPhone, which sold 270,000 units in its first 30 hours of sales. Apple continued to see success with the iPhone, iPod Touch, and iPad.
New CEO of Apple
On August 24, 2011, Jobs resigned as CEO of Apple and was replaced by Tim Cook, formerly the COO. Jobs stayed on as Apple's chairman until his death on October 5, 2011.
Legacy of Steve Jobs
Steve Jobs left a formidable legacy, and Apple continued to follow many of his principles and adhered to his vision even after his death. Steve Jobs endeavored to create the company in his likeness and to instill in its leadership an understanding of his technology and business philosophy. The primary tenet of this philosophy is the creation of a culture of innovation at Apple that drives its products and research. Steve Jobs' view was that technology for technology's sake is meaningless unless it is tied to elegant form, function and ease of use. He felt that using a computer should be easy and intuitive.
Two other pillars mark Steve Jobs' legacy. One is the special program for management at Apple. It functions like an "Apple University," instilling executives and directors with Apple's principles and vision as distilled by Jobs. Whenever an executive-level manager or director is hired at Apple, they go through the program so that all of Apple's management is on the same page and led by the same principles and philosophy. This, along with Apple's organizational structure, continues to instill Apple with a unity of vision and design in its products.
The final pillar of Jobs' legacy is in his training of his hand-picked successor, Tim Cook. Before coming to Apple in 1998 shortly after Steve Jobs' return, Cook was the vice president for corporate materials at Compaq. At Apple, before becoming CEO after Jobs, Cook served as the chief operating officer, responsible for international sales and operations. Not long after Jobs was diagnosed with cancer in the early 2000s, he started grooming his successor, ensuring that Cook was ready to take Jobs' place no matter the outcome of his illness. Since then, Cook has continued to advance Apple's vision while contributing his own style.
Changes to Apple Computers
There have been some major changes since Jobs's death. One major driver of Apple's success under Jobs was that he fostered a culture of internal competition, where Apple's innovators were encouraged to compete not with outside entities like Microsoft but with their own products. In this way, the iMac was created in opposition to the Macintosh, and beat it out; the iPhone was created to beat the iPod, and it did. This internal competitive drive waned with Jobs' passing, and some things he envisioned for the company have not come to pass.
However, Apple remains a tech giant to this day with a unique organizational structure and some of the most popular stock on the market.
Apple Ownership Structure and Organization
Apple's structure as an organization is optimized around fostering innovation and ensuring support for strong leadership. The primary distinguishing characteristics of Apple's organizational structure are its spoke-and-wheel hierarchy, its product-based divisions, and its weak functional matrix, meaning there is strong interdivisional collaboration while still preserving the hierarchy.
The spoke-and-wheel hierarchy puts Tim Cook at the center, supported by an upper tier of management centered around business functions. For example, Apple has a senior vice president for retail and a senior vice president for worldwide marketing, and this leadership structure lets the top leaders address business needs.
This portion of Apple's structure is derived from the functional type of organizational structure. Under Steve Jobs, this hierarchy was rigid, but under Tim Cook, there has been more collaboration among different parts of the company, such as between the hardware and software teams. The vice presidents of the company also have more autonomy under Tim Cook than they had under Steve Jobs.
Product Divisions and Structure
The product-based divisions in Apple, on the other hand, are derived from the divisional type of organizational structure and are used to manage specific products that Apple creates. For example, there are senior vice presidents and vice presidents for software engineering in charge of iOS and macOS and for hardware engineering serving iPhone, iPad and Mac products.
Apple is characterized by collaboration among various components of the organization comprising the weak functional matrix characteristic of its structure. In this structure, top management determines project direction, with limited authority and control given to project heads, and strong collaboration between projects is encouraged. Under this structure, the software and hardware teams can collaborate closely and share information and innovations. The structure encourages effective and rapid innovation.
This organizational structure fosters strong corporate control but makes the organization less flexible and less likely to support rapid change, as everything must go through Tim Cook and the top management.
Apple's Board of Directors
Apple's Board of Directors currently consists of seven people, with Arthur D. Levinson serving as Chairman of the Board. Levinson is the current CEO of Calico and the former chairman and CEO of Genentech and has been on the Apple Board of Directors since 2000. Also serving are Tim Cook (Apple's CEO), Al Gore (former U.S. vice president), James A. Bell (former CFO and corporate president of Boeing), Andrea Jung (president and CEO of Grameen America Inc.), Ronald D. Sugar, Ph.D. (former chairman and CEO of Northrop Grumman) and Susan L. Wagner (co-founder and director of BlackRock).
Apple Stock and Stockholders
Apple stock (AAPL) is some of the most widely traded stock on the market, with about 4.715 billion shares outstanding. However, a sizable portion of AAPL is owned by top leadership within Apple, and, since 2012, Apple has invested billions in buying back its own stock. The biggest AAPL stockholder is Arthur Levinson, the chairman of the board, with 1.1 million shares as of August 3, 2018. The second highest stockholder is Tim Cook himself, with 878,425 shares as of August 24, 2018.
Joining this top tier of Apple's leadership in holding AAPL stock are several other current and former Apple executives. Craig Federighi, the senior vice president of software engineering, is the third-largest individual AAPL shareholder, with 412,571 shares as of August 9, 2018. Federighi worked under Steve Jobs at NeXT and joined Apple at the same time as Jobs when Apple acquired NeXT. At NeXT, Federighi helped develop the Enterprise Objects Framework, and at Apple, he leads the team responsible for the software in Apple's product line, including its famous interfaces and operating systems.
Other Notable Apple Shareholders
The fourth-largest AAPL shareholder is Jeffrey Williams, Apple's chief operating officer, filling the spot once held by Tim Cook. Williams owns 108,085 shares as of October 3, 2018, and worked on the team that launched the iPhone. He started at Apple in 1998 as the head of worldwide procurement and continues to lead worldwide operations for iPod and iPhone sales.
The fifth-largest individual AAPL stockholder is Bruce Sewell, with 108,085 shares as of October 3, 2018. Sewell is Apple's former general counsel and the former senior vice president of legal and global security. Sewell previously worked at Intel, where he oversaw Intel's corporate social responsibility, corporate affairs and legal programs. At Apple, Sewell oversaw intellectual property, corporate governance, global security and privacy, and other legal matters. He retired from Apple in October 2017.
Who Owns Apple?
Overall, Apple institutional investors hold 61.77% of the outstanding AAPL shares, a higher percentage than almost any other tech company. They own Apple. Since Apple's resurgence in 1997, its stock has generally performed well and recently doubled over the course of a year thanks to robust App Store sales.
In recent years, Apple has returned billions of dollars to shareholders in buybacks, dividends and other equivalents. Apple's executives have been investing the company's resources in expansion, with a new corporate campus planned in Austin, Texas, but the company is generating enormous amounts of cash. Apple is returning the excess to shareholders efficiently by buying back its own stock and increasing the value of their investment.