Apple’s CEO Tim Cook got a huge bonus this week.
He collected 560,000 shares of Apple, worth $89.2 million, according to a regulatory filing on Monday.
After cashing out and paying taxes, he collected about $43 million.
Cook’s bonus was connected to the company’s performance — Apple stock has outperformed 81% of the SP 500 in the past three years.
But Cook isn’t just a financial wizard, and if you were giving the award based on Apple introducing innovative products and expanding into new markets, he’d still get the bonus.
Contrary to conventional wisdom and analyst warnings that Cook might not be able to create new products the way his predecessor did, the two completely new products that Apple launched under his leadership are dominating.
So while Cook might not be the product visionary late CEO Steve Jobs was, he does know how to motivate Apple’s army of engineers and designers to come up with something “insanely great.”
Take Apple’s AirPods, the wireless earbuds it first released last fall. Although they compete against similar products from Samsung and well-funded startups, they took 85% of dollars spent on the “totally-wireless” product category so far this year, according to an NPD estimate released earlier this week.
It’s still a small market — NPD estimates only 900,000 totally wireless headphones were sold in the United States through July, but Apple is synonymous with it.
You could also look at the Apple Watch, which has been called a flop or failure by several loud voices, including on Business Insider.
But after a slow first two years on sale, the Apple Watch is starting to pick up momentum. Apple moved 3.4 million watches last quarter — giving it an estimated 49.6% market share during that period, according to a new estimate from research firm IDC.
The next-place smartwatch maker is Samsung with an 11% market share. To be clear, Apple is becoming by far the dominant player by far in smartwatches.
Before the end of the year, Apple will release its third major new product under Cook’s leadership: the HomePod, a smart speaker that users control with their voice to play music, among other things. Some may call it a “me-too” product following Amazon’s Echo and Google’s Home, but it’s going to be differentiated by a higher price and superior sound quality.
The HomePod has a chance to outsell both the Echo and Google’s Home, according to a May forecast from tapped-in KGI Securities analyst Ming-Chi Kuo. He predicted Apple could sell between 10-12 million of the speakers in its first 12-18 months on the market. Amazon needed three years to sell more than 10 million Echo-type speakers, according to a separate May estimate.
Sure, none of these products are as dominant, profitable, or world-changing as the iPhone, which sold 41 million units the last quarter figures are available. But almost nothing is.
One reason why the perception of Apple’s new products may be lagging the reality is because Apple hasn’t released specific sales figures for them, like it does for the iPhone and other key product lines.
But Cook has hinted to investors that he may give new insight into Watch sales and AirPods sales by bundling them together at some point in a category called “wearables,” and separating out other minor products like iPod and accessories.
“In fact, when we combine Apple Watch, AirPods, and Beats headphones, our revenue from wearable products in the last four quarters was the size of a Fortune 500 company,” Cook said in May. Beats is another new product line under Cook. (Apple bought the company for $3 billion in 2014.)
A Fortune 500 company worth of sales based on new product lines in six years isn’t bad at all.
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