Here's Why Apple Can't Dawdle in Replacing Leadership

NEW YORK (TheStreet) -- Back in 2011, when Steve Jobs was very ill, there were persistent questions about Apple's (AAPL) CEO succession plan. The most bizarre names were put forth by journalists, including those who had no experience as a corporate executive officer. But the only real candidate all along was Tim Cook, a man Mr. Jobs had great confidence in.

Now that Mr. Cook, who is 53 years old, is the CEO, the worries about Apple leadership are over -- for the time being.

However, corporate succession plans must still be written. Heaven forbid that Mr. Cook, in good health, should become seriously ill or get hit by a bus. So there should be, and certainly is, a new plan.

My candidate is Phil Schiller who is also 53. Over the years, as Senior Vice President of Worldwide Marketing, no one has drunk more deeply from the well of Apple Kool-Aid than Mr. Schiller. Jonathan Ive isn't really an option because he's a designer, never been trained as a CEO, and is far more valuable right where he is.

A Trek in the Wilderness

In terms of long-term planning, many thought that Scott Forstall would someday, when he grew up, become the next generation Apple CEO. Unfortunately, Mr. Forstall may have thought that because he was the protege of Mr. Jobs that his future was secure at Apple. What stymied that was his youth and inability to work as a team member towards a larger cause, and that got him on the wrong side of Tim Cook, Bob Mansfield and others.

Perhaps the trek of Mr. Forstall in the wilderness, just as Mr. Jobs experienced after he was forced out of Apple in 1985, will bring Mr. Forstall full circle. Regrettably, history seldom repeats itself in that fashion.

At some point, Apple's executive team will need to think about what Apple's leadership will look like in a few years. It's not that I expect anyone on this team to be soon incapable of carrying out their duties anytime soon. Rather, it's a question of how Apple's leadership responds to the the natural course of aging, competitive challenges and the changing demographics of customers in the U.S. and worldwide.


The Apple We Knew

Apple's leadership is still treading lightly on the legacy of Steve Jobs, as they should. Most of the team has been schooled in the art and science of Apple for two decades now, and that is paying off. However, in time, it's going to be necessary to change or start to wilt.

One of the things I am sensing is that the allure of Apple is no longer enough to guarantee the success of any given product or service. Competitors are fierce. They are clever in how they mimic Apple products. Technical options are plentiful on the Internet. Young people who have grown up never knowing the struggles Apple has been through have learned how to construct their own technical ecosphere and sociology.

When Apple conjures up Ping, iPhones whose display is too small, iTunes Radio, MobileMe or throws its weight around to capture an onerous 30% of book or app revenue, intelligent, competitive people in other corporations start to think about how they can persuade customers to take another path. Not everything Apple does is a success, and not everyone remembers -- or cares -- how close Apple came to extinction in 1996.

Loyalty must be earned in perpetual renewal.

The rumors we've heard about Apple acquiring Beats suggests that, for the first time, the executive team is concerned about the company's inherent ability to automatically and magically appeal to a broad range of young people. iPod sales are a small fraction of what they were at their peak. While part of that is certainly the iPhone taking on that music player role, there are other emerging factors. For example, the handwriting seems to be in the wall when it comes to streaming music largely replacing purchased music.

Hubris can make any executive believe that he or she will preside forever, but the fact is, it's wise to identify and develop young people, now in their mid 30s and 40s, to someday take over the leadership of Apple. And it shouldn't be too private an affair. Part of coping with competition and the increasing age gap between Apple executives and young customers means a willing, benign, responsible effort to, in a semi-public way, celebrate those who will, in just a few years, take over the reigns of Apple, if for no other reason than to season them and let the world size them up.

That time will be here sooner than we think.

At the time of publication the author was long AAPL.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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