Analysts praise Apple's exec overhaul, see hints of future sea changes

Few downsides in the short-term from iOS dev chief's exit

Apple's executive shake-up earlier this week is a sign that design is the "tip of the spear" for the company, but the reorganization won't disrupt the firm's product delivery and may produce some groundbreaking moves, analysts predicted today.

On Monday, CEO Tim Cook said that Scott Forstall, who was a senior vice president in charge of iOS development, was leaving the company in 2013, and would serve as an advisor in the interim. Additionally, John Browett, who led Apple's retail efforts, was also out.

Forstall has been with Apple since 1997 -- and before that at NeXT, the computer and software company former CEO Steve Jobs started in 1985 after being forced out of the firm he co-founded. He was responsible for iOS, the mobile operating system that powers the two most-profitable lines in Apple's portfolio, the iPhone and iPad.

His departure received the lion's share of attention from bloggers, pundits and analysts.

"To me, this clearly shows that the tip of the spear is design," said Patrick Moorhead, principal analyst at Moor Insights & Strategy, of Forstall's removal and the splitting of his responsibilities among three others.

Jony Ive, formerly head of industrial design, will now also control what Apple calls "Human Interface," the user interface (UI) and user experience (UX) of software.

Craig Federighi, who only recently was promoted to lead OS X development, will now lead development of both that operating system as well as iOS. Meanwhile, Eddy Cue -- Apple's chief executive for its online and iTunes products, will assume responsibility of Siri and Maps, two oft-criticized projects Forestall handled.

"This is a doubling down on integrating hardware and software design," said Moorhead of Ive's new role. "There's now just one decision maker."

"[Steve Jobs] was the head product manager, the head designer, the head marketer," said Ezra Gottheil of Technology Business Research. "Ive is the perfect choice [as a replacement] on design. He may not be a software engineer, but that's actually an advantage. He will represent the user [in software design discussions], and will be able to say, 'The user must have this experience ... help me find a way to do that.'"

Others agreed, seeing Ive as the winner in the reshuffling who's been given enormous power by Tim Cook, a CEO who doesn't seem to be at all interested in the design side.

At the same time, the departure of Forstall -- most saw it as a firing, or claimed anonymous sources within Apple characterized it that way -- also shows Cook's hand. Cook has been CEO since August 2011, shortly before Jobs' death.

"This puts an exclamation point on Cook's decisiveness," said Moorhead. "This was not tentative. This is Tim Cook's company as of that call [to Forstall]. You can attribute the iPad Mini, the iPhone 5 to Jobs, but this is clearly Tim Cook."

What the changes won't do, analyst said, was change Apple's short-term plans or impact sales.

"For consumers, this doesn't really matter," said Carolina Milanesi, an analyst at Gartner. "They're not going to buy an iPad because of this."

"I don't think this much changes the cadence of releases," said Moorhead. "After all, it takes time to make any changes, it's going to take Ives time to make changes."

Apple is now down two execs after a Monday culling of the heads of iOS development and the company's retailing. (Image: Apple.)

But in the long run, the reorganization could cast a shadow ... or could be interpreted as a hint of major turns in direction for Apple.

"This creates some uncertainty that they'll continue to deliver excellent, but not flawless, products," opined Gottheil. "But that uncertainty was introduced when Jobs became very ill. Maintaining the level of design [when Jobs was in control] is very hard."

But Milanesi and Moorhead saw the moves -- as did Gottheil, in large measure -- as positive.

For her part, Milanesi applauded the decision to put Ive in charge of all design, and Federighi overseeing all OS development.

"I like the bringing together of iOS and OS X, the two need to be closer together," said Milanesi even as she acknowledged steps Apple has taken over the last 15 months to bring elements of the former to the latter. "But this formalizing is important, that's always a good thing for a company."

Moorhead had a different, more radical take, driven in part by a short description in Cook's statement of Bob Mansfield's new role.

Mansfield, who has worked at Apple since 1999 and has been responsible for Mac hardware for much of that time, announced his retirement in June but was apparently convinced to return by Cook. He will now head a new group, dubbed "Technologies," that Apple said would "combine all of Apple's wireless teams ... in one organization" and perhaps more importantly, would be responsible for "the semiconductor teams, who have ambitious plans for the future."

"I can see Apple designing a super ARM chip to move up the stack [to the Mac], to remove Intel," said Moorhead. The benefit: In combination with a single development environment for mobile devices and traditional Macs, Apple may be able to leverage the hundreds of thousands of mobile apps on the Mac platform.

But as industry analysts took the executive suite changes in stride, Wall Street did not: In the first day of trading since the Monday announcement, Apple shares were down more than $10, or about 1.6%, and fell under $600 for the first time since July 30.

Almost as an afterthought, Apple also said that Browett, who had started working for Apple only last April, was leaving. Not a surprise, said the experts: Last summer, Browett instituted a staffing-level change in the company's stores that not only was quickly reversed, but triggered a public apology from Apple.

"I was very skeptical when they hired [Browett]," said Milanesi. "I'm from the U.K., and very familiar with Dixons."

Before being hired by Cook, Browett was the CEO of Dixons Retail, Europe's second-largest electronics chain. Dixons has struggled for years, and carries a reputation as a down-scale retailer much less polished than Apple's own chain of brick-and-mortar outlets.

Gottheil cut Cook some slack for hiring, then quickly firing Browett.

"I don't blame anyone for making a bad hire," said Gottheil, whose resume includes 13 years as a product design manager with Lotus, the maker of the once-dominant Lotus 1-2-3 spreadsheet. "I've made bad hires. But I blame people for keeping a bad hire."

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed. His email address is gkeizer@computerworld.com.

See more by Gregg Keizer on Computerworld.com.

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