Before Tim Cook took over as CEO of Apple, he had already established a reputation as a "supply chain master" within the company. When he joined Apple in 1998, the company was mired in an operational crisis, with inventory cycles lasting for months and low production efficiency. Leveraging his extensive operational experience gained at IBM and Compaq, Cook completely overhauled Apple's supply chain. He closed Apple's warehouses and factories worldwide, shifting to an outsourcing production model and establishing close partnerships with Asian manufacturers. This strategic shift reduced Apple's inventory cycle from months to just days, significantly improving capital utilization efficiency.
After becoming CEO, Cook elevated supply chain management to a strategic level. He led Apple's transformation to a vertically integrated model, controlling not only product design and software ecosystems but also gradually taking control of the supply of core components. The most representative initiative was Apple's self-developed chip strategy—from the A series to the M series, and then fully transitioning to Apple Silicon. This shift freed Apple from dependence on suppliers like Intel, achieving deep optimization of hardware and software while significantly increasing profit margins. In 2022, the gross margin of Mac computers equipped with M series chips reached an astonishing 35%, far exceeding the industry average.
Cook also restructured Apple's global production network. On one hand, he maintained close cooperation with Chinese suppliers, while on the other hand, he promoted diversification of production locations, establishing new production bases in India, Vietnam, and other places. This "China +" strategy not only ensured supply chain resilience but also optimized cost structures. By 2023, the proportion of iPhone production in India had risen from single digits a few years ago to 15%, and it is expected to reach 25% by 2025. Cook's meticulous management of the supply chain allowed Apple to maintain relatively stable product deliveries even during the COVID-19 pandemic and the global chip shortage, providing a solid foundation for the company's continued growth.
In terms of inventory management, Cook implemented a Just-In-Time (JIT) production model, keeping inventory turnover days at the lowest level in the industry. Apple's fiscal report for 2024 shows that its inventory turnover days were only 5 days, far lower than Dell's 30 days and HP's 45 days. An efficient supply chain not only reduced operating costs but also enabled Apple to respond more quickly to market changes and launch new products. The operational system established by Cook has become a model studied by top institutions like Harvard Business School and is a key factor in Apple's ability to maintain an advantage in fierce competition.
When Cook took over as CEO, Apple's revenue was heavily reliant on the iPhone, accounting for over 60%. This dependence on a single product posed significant risks, and Cook keenly realized the need to develop new sources of revenue. He led Apple's strategic transformation towards service businesses, shifting the company from a hardware manufacturer to an "hardware + services" ecosystem operator.
Cook's service strategy encompasses multiple levels. First, it involves expanding the coverage of existing services: the number of developers on the App Store grew from hundreds of thousands in 2011 to over 30 million by 2025; iCloud users increased from 100 million to over 1.5 billion; Apple Pay expanded from domestic services in the U.S. to over 80 countries and regions worldwide. The expansion of these foundational services created a stable recurring revenue stream for Apple.
More groundbreaking was the subscription service matrix introduced by Cook. In 2015, Apple acquired Beats for $3 billion, gaining not only a popular headphone brand but, more importantly, its music streaming technology, laying the groundwork for the launch of Apple Music. In the following years, Cook successively launched services like Apple TV+, Apple Arcade, Apple News+, and Apple Fitness+, building a complete subscription ecosystem covering entertainment, gaming, news, and fitness. These services not only increased user stickiness but also generated high-margin recurring revenue. In the second quarter of 2025, Apple's service business revenue reached $24 billion, accounting for 25% of total revenue, with a gross margin of 70%, becoming the main engine driving profit growth.
Cook also innovatively launched the Apple One service bundle, allowing users to subscribe to multiple services at a discounted price. This strategy significantly increased users' "wallet share" and retention rates. Market research shows that users subscribing to three or more Apple services have a device replacement cycle about 18 months longer than average users, greatly enhancing the stability of the ecosystem. The successful transformation of the service business has made Apple's revenue structure more balanced, reducing the risks associated with dependence on a single product. More importantly, the service business has created a stable cash flow, allowing Apple to maintain financial health even during periods of hardware sales fluctuations. This strategy is regarded as a model for the digital transformation of traditional hardware companies and is one of the key factors in Cook's surpassing of Jobs' business achievements.
In contrast to the relative neglect of the Chinese market during the Jobs era, Cook has elevated China to the core of Apple's global strategy. He deeply understands that China is not only an important production base but also the fastest-growing consumer market. After taking office, Cook frequently visited China and established good relationships with the Chinese government and businesses. This "China-first" strategy has brought tremendous returns to Apple. On the product front, Cook promoted a series of customized initiatives for the Chinese market. In 2013, the iPhone 5S launched a "champagne gold" color specifically designed for Chinese consumer preferences, resulting in a buying frenzy in the Chinese market. Subsequently, Apple added dual SIM capabilities for Chinese users, optimized the Chinese input method for iOS, and made deep adaptations for local applications like WeChat. These localization improvements significantly enhanced the experience for Chinese users.
In terms of sales channels, Cook expanded Apple's retail network in China. By 2025, the number of official retail stores in mainland China had exceeded 50, ten times that of 2011. At the same time, Apple strengthened its cooperation with local e-commerce platforms and carriers, allowing products to reach a wider audience. Notably, Cook included China as a launch market for new products, changing the previous practice of delayed launches, which greatly enhanced Chinese consumers' brand recognition.
Cook also keenly captured the opportunity presented by the rise of the Chinese middle class, launching a multi-tiered product strategy. In addition to the high-end iPhone Pro series, Apple introduced the relatively affordable iPhone SE series and discount plans for older models to cover user groups with different purchasing powers. This strategy increased Apple's market share in the Chinese smartphone market from less than 5% in 2011 to over 20% by 2025.
In terms of the service ecosystem, Cook also made significant local adaptations. The App Store launched a 1 yuan special price section, Apple Music provided a rich selection of Chinese music content, and iCloud data storage was established in Guizhou, all demonstrating a focus on the Chinese market. In the second quarter of 2025, Greater China contributed $15.369 billion in revenue to Apple, accounting for 16% of total revenue, ending the decline of the previous two quarters and restoring growth. Cook's China strategy not only brought direct revenue but also deeply integrated Apple's supply chain with Chinese manufacturing, creating an irreplaceable competitive advantage. China has become an indispensable part of Apple's global ecosystem, further proving Cook's business vision.
Tim Cook's surpassing of Jobs to become Apple's longest-serving CEO is no coincidence. Through supply chain revolution, service transformation, China strategy, product expansion, and AI layout, Cook not only preserved the foundation left by Jobs but also elevated Apple to new heights. Under his leadership, Apple's market value grew from about $350 billion to over $3 trillion, becoming the world's most valuable publicly traded company; cash reserves increased from $76 billion to over $200 billion; and the number of active devices worldwide grew from 300 million to over 2 billion. Behind these numbers is Cook's unique business acumen and leadership philosophy.