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How Eddy Cue won over Steve Jobs, when Jobs said no to an Apple HDTV, and much more


The premise of Yukari Iwatani Kane's upcoming book, Haunted Empire: Apple After Steve Jobs, is that Apple under the reign of Tim Cook is still struggling to secure its footing following the passing of Steve Jobs. Kane argues that without Jobs steering the ship, Apple has lost some of its innovative spirit and is devolving from a great company into a good one.

I'll have a full review of the book up soon, but below are a few anecdotes worth sharing.

Eddy Cue wins over Steve Jobs

While now a household name for those who follow Apple, Eddy Cue wasn't a widely known figure outside of Cupertino until August 2008 when Steve Jobs tasked him with fixing the fumbled launch of MobileMe. MobileMe, of course, would eventually make way for iCloud.

Now an integral part of Apple's executive team, Cue initially put his stamp on Apple by helping oversee the development and rollout of iLife, the iTunes Store and Apple's online store. In the process, Cue also served as a dealmaker by helping negotiate Apple's first iPhone deal with AT&T and even played the role of peacemaker when Apple invariably butted heads with record labels. A 2012 Cnet profile of Cue notes that he "helped prevent the relationship between Apple and the large record companies from collapsing" in 2007.

These days, Cue has more than enough responsibilities to keep him busy. As Apple's Senior Vice President of Internet Software and Services, Cue oversees the iTunes Store, the App Store, iCloud, iAds, iTunes Radio, the iBookstore, Siri, and Maps. Quite a full plate, to say the least.

A longtime Apple veteran, Cue's tenure with Apple stretches all the way back to 1989.

Kane writes that Cue started as an intern at Apple whereupon he rose through the ranks.

In one version of a story that he told everyone, he was plucked out of the IT department by Jobs during a meeting in which he had dared to voice an opinion about the topic at hand. When Jobs looked at him and told him to shut up, an undeterred Cue spoke up again, causing Jobs to throw a pen at his forehead. Cue, who by then figured he had nothing to lose, braced himself and offered up his opinion for a third time. This time, he won Jobs's approval.

From that moment on, Cue became Jobs's guy...

Kane writes that Cue and Jobs were particularly close and that Cue frequently visited Jobs when the Apple co-founder fell ill. In November, Jobs was inducted into the Bay Area Business Hall of Fame. Cue accepted the award on Jobs' behalf and spoke in glowing terms about his longtime boss.

He was a colleague, but most important, he was my friend. We talked every day, we talked about everything. Even in my darkest days, he was there for me. When my wife had cancer, he was there for us. He helped me with the doctors and the treatments, he told me a lot about what he was going through, and her. And in many ways, she's here tonight because of him, so thank you, Steve.

When Steve Jobs said Apple isn't making a TV

Nearly every year, Apple holds a "Top 100" retreat where the company's best and brightest pile into buses and head down to a resort at Carmel Valley Ranch. According to Adam Lashinsky, who initially reported on the retreat in a 2011 Fortune article, the gathering is typically comprised of the top 100 employees Apple would theoretically want to keep if forced to start anew.

Undoubtedly an honor to be chosen, attendees at these retreats are given sneak previews of Apple's upcoming product plans, sometimes many months in advance. It's been reported that attendees at previous retreats were given advance notice of the iPod, Apple's foray into the retail business, and the iPhone.

Filled with meetings and presentations, the retreat provides employees in attendance an opportunity to discuss and ask questions about anything at all, without the typical veil of secrecy that typically shrouds the company.

Apple's 2010 retreat was held that November, with Kane relaying that an employee there took advantage of a Q&A session with Jobs and asked if Apple is going to make a TV.

Jobs didn't hesitate. "No," he replied. "TV is a terrible business. They don't turn over, and the margins suck. He added, however, that he wanted to own the living room.

Of course, rumors of Apple releasing an HDTV have persisted for quite some time. Often times, analysts have been quick to suggest Apple needs to release an HDTV simply for the sake of entering a new product category, wholly ignoring that the TV business was and continues to be exceedingly unprofitable -- just ask Panasonic and Sony.

So while Apple's future plans are anybody's guess (my invite to the retreat must have gotten lost in the mail), Jobs' statement about owning the living room is worth latching onto. It suggests that Apple, as is typically the case, is thinking bigger than just TV. It wants an Apple shaped living room experience that may be more simply achieved via the Apple TV than with an Apple HDTV.

Jobs: Always a stickler for details

With respect to the employee presentations that comprise a portion of the "Top 100" retreat experience, Kane writes that Jobs, per usual, was a stickler for the most minute details imaginable.

Employee presentations, put together with Keynote of course, had to abide by precise guidelines.

One font family per presentation, three or five bullet points per slide, never four, and titles 30 percent above the center line. The file size also could not be more than eight megabytes, just enough to show up well on a projection screen. Jobs hated big files.

Tim Cook aims high and demands perfection

Lastly, Kane provides some more color to the man that is Tim Cook. Known as a tireless and relentless worker, the Wall Street Journal recently provided a book excerpt highlighting Cook's high expectations and no-nonsense approach.

From the start of his Apple tenure, Cook set colossally high expectations. He wanted the best price, the best delivery, the best yield, the best everything. "I want you to act like we are a $20 billion company," he told the procurement team-even though Apple then had only about $6 billion in annual revenues and was barely eking out a profit. They were playing in a new league now.

Now one of Cook's first tasks upon joining Apple was to take care of the company's lingering inventory problem. On this note, Kane tells a story of Cook's first trip to Asia where he met with Apple's operations team in Singapore.

At the time, the industry standard for annual inventory turns -- "a measure of how often a company sold and replaced its inventory" -- was 25. The goal, of course, was to maximize the number of inventory turns in the interest of efficiency.

At the meeting in question, Cook's operations team explained how they might achieve 100 turns. Impressive, but Cook was thinking bigger.

"What about 1000 turns?" Cook asked.

The premise of the question was so outlandish that it elicited laughter from his team. Only problem was that Cook was dead serious.

"I'd like you to look at it," Cook told them.

Eighteen months after he started, Apple was turning inventory daily...

Within a few years the Asia team even accomplished near infinite turns, the epitome of inventory management. It meant they had no inventory. Its operations were so lean that customers were practically buying the product as it was coming off the assembly line.

While inventory levels would increase once Apple's product line began expanding in the mid-2000s, there was no mistaking Cook's talent as an operations whiz with exceedingly high standards for both himself and those around him.

It's not exciting to me to improve by five percent," Cook had said. "Now double or triple it, that's exciting.

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