Apple Inc. (AAPL): Will Tony Fadell Break The Losing Streak?

Apple Inc. (AAPL): Will Tony Fadell Break The Losing Streak?
ElisaRiva / Pixabay

Apple Inc. (NASDAQ:AAPL) has produced some of the greatest products of the modern era, such as the iPod, iPhone and iPad. But the high-profile Apple executives who leave the company seem to fail, sometimes miserably, to replicate the success of their previous employer. There is a long list of such executives. Tony Fadell could be the latest addition to the list. Google Inc (NASDAQ:GOOG) acquired his home management start-up Nest Labs for $3.2 billion last month. Fadell played a key role in the development of the iPod.

What’s wrong with former Apple executives?

Apple Inc. (NASDAQ:AAPL) has a secretive culture and narrow focus, and its executives are accustomed to such working environments. But when they move to other companies with more cooperative and traditional structures, they fail to flourish, say Ian King and Peter Burrows of Bloomberg. Ron Johnson, who once headed Apple’s retail business, moved to the struggling retailer J.C. Penney Company, Inc. (NYSE:JCP). Though Johnson was expected to revive the ailing department store chain, the retailer’s revenues skidded 25% under his tenure. Ron Johnson was finally ousted from J.C. Penney. That doesn’t mean he is a bad leader – after all, he is the same person who helped make Apple the world’s biggest retailer in terms of sales per square foot.

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Jon Rubinstein, another ex-Apple Inc. (NASDAQ:AAPL) executive, joined Palm Inc. as its product development chief, and became its CEO in 2009. Palm’s Pre smartphone failed miserably. The company was finally acquired by Hewlett-Packard Company (NYSE:HPQ) in 2011. Mike Bell, yet another ex-Apple and Palm executive, joined Intel Corporation (NASDAQ:INTC) to help the chipmaker establish itself into smartphone processor market. After four years, Intel hasn’t been able to challenge Qualcomm, Inc., and still has less than 1% share in smartphone chip industry.

Advanced Micro Devices, Inc. (NYSE:AMD) recruited three former Apple Inc. (NASDAQ:AAPL) engineering executives Jim Keller, Raja Koduri and Mark Papermaster. They developed key components for the iPad and iPhone at Apple. But their technical expertise hasn’t helped their new employer in PCs, and the company is still struggling to return to profit.

Can Tony Fadell replicate the success of Apple?

However, Tony Fadell may change the tradition. Many executives succeeded at Apple Inc. (NASDAQ:AAPL) by focusing on one area. But failed when they took larger roles at their new employers. Bob Borchers, a former marketing executive at the Cupertino-based company, says that Fadell handled much broader responsibilities, and he was well-rounded. The iPhone maker flourished by focusing on fewer, high-end products. Similarly, Tony Fadell’s Nest Labs has focused only on two products, a smoke detector and a digital thermostat. Nest products look and feel similar to the iDevices. Let’s hope Tony Fadell changes the tradition.

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