Word broke several minutes ago that two senior executives would be leaving Apple Inc. (NASDAQ:AAPL). The executives are the Apple Inc. (NASDAQ:AAPL) retail and Software chiefs, both of whom are leaving in next year. Scott Forstall, is the head of head of iPhone software. Scott has been at the company since 1997. John Browett, who was just brought in by Tim Cook to lead the retail sector is leaving. No one knows the reason for the departure yet, but Kara Swisher of AllthingsD notes that mapping software was the responsibility of Scott Forstall. Apple Inc. (NASDAQ:AAPL) has faced much criticism over its new mapping service. Many consumers have complained that the new mapping software gives wrong directions.
Apple Inc. (NASDAQ:AAPL) has reportedly said that a search is underway for a new retail chief to replace John Browett and that the retail team would report directly to Apple’s CEO, Tim Cook.
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UPDATED [23:50 PM EST]:
How this change will affect the company?
According to Credit Suisse’s research analysts, Apple Inc. (NASDAQ:AAPL) expects the changes to increase collaboration across hardware, software and services. Jony Ive will now lead both software interface and hardware design. Mr. Cue will take charge of Siri and Maps, which will move into online services. Craig Federighi will now lead iOS in addition to the Mac OS. Meanwhile, Bob Mansfield will lead the new Technologies group, which combines Apple’s wireless teams and semiconductors, where Apple has “ambitious plans.”
What are the risks?
The management changes will be seen as: 1) increasing execution risk; 2) raise concerns that the relatively new head of retail is departing quickly and retail momentum; and 3) pointing to issues with Apple Maps and Mr. Forstall’s consequent departure. Nevertheless, the actions point to management taking decisive action, which is a positive.
According to Goldman Sachs’ report, this shuffle comes after Apple Inc. (NASDAQ:AAPL) reported two consecutive quarters that missed consensus expectations, so it is likely to trigger some debate over whether Apple Inc. (NASDAQ:AAPL) is changing its strategy or facing internal dissent in the post-Jobs era.
Apple has issued a following press release:
CUPERTINO, California—October 29, 2012—Apple® today announced executive management changes that will encourage even more collaboration between the Company’s world-class hardware, software and services teams. As part of these changes, Jony Ive, Bob Mansfield, Eddy Cue and Craig Federighi will add more responsibilities to their roles. Apple also announced that Scott Forstall will be leaving Apple next year and will serve as an advisor to CEO Tim Cook in the interim.
“We are in one of the most prolific periods of innovation and new products in Apple’s history,” said Tim Cook, Apple’s CEO. “The amazing products that we’ve introduced in September and October, iPhone 5, iOS 6, iPad mini, iPad, iMac, MacBook Pro, iPod touch, iPod nano and many of our applications, could only have been created at Apple and are the direct result of our relentless focus on tightly integrating world-class hardware, software and services.”
Jony Ive will provide leadership and direction for Human Interface (HI) across the company in addition to his role as the leader of Industrial Design. His incredible design aesthetic has been the driving force behind the look and feel of Apple’s products for more than a decade.
Eddy Cue will take on the additional responsibility of Siri® and Maps, placing all of our online services in one group. This organization has overseen major successes such as the iTunes Store®, the App Store?, the iBookstore? and iCloud®. This group has an excellent track record of building and strengthening Apple’s online services to meet and exceed the high expectations of our customers.
Craig Federighi will lead both iOS and OS X®. Apple has the most advanced mobile and desktop operating systems, and this move brings together the OS teams to make it even easier to deliver the best technology and user experience innovations to both platforms.
Bob Mansfield will lead a new group, Technologies, which combines all of Apple’s wireless teams across the company in one organization, fostering innovation in this area at an even higher level. This organization will also include the semiconductor teams, who have ambitious plans for the future.
Additionally, John Browett is leaving Apple. A search for a new head of Retail is underway and in the interim, the Retail team will report directly to Tim Cook. Apple’s Retail organization has an incredibly strong network of leaders at the store and regional level who will continue the excellent work that has been done over the past decade to revolutionize retailing with unique, innovative services for customers.
Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App Store, and is defining the future of mobile media and computing devices with iPad.