Why Scott Forstall’s Firing Has Made Me Bearish on Apple

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Nov. 8 2012 11:15 AM

Why I’m Bearish on Apple

Scott Forstall’s firing reveals the company’s struggles to keep an all-star team together without Steve Jobs.

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Scott Forstall, the now-former Apple senior vice president of iPhone software, on June 11 in San Francisco

Photo by Justin Sullivan/Getty Images.

Many people have made themselves look foolish by taking a skeptical line on Apple over the past five years, but the time has come for me to make that call. The problem isn’t the products—which still look great to me—but the people. I’m bearish on Apple due to the firing of Scott Forstall, the senior vice president in charge of iOS. It’s not that I hold any particular affection for Forstall personally or even take his side in the great skeuomorphism controversy that’s been roiling Apple circles for a while now. But a company doesn’t normally lose a key player for no reason, and Forstall’s baby—the operating system that runs iPhones and iPads—is what made the company what it is today.

Before iOS, Steve Jobs had already returned and “saved” the company from oblivion. But that simply meant restoring it to what it had been before the disaster: a medium-sized, profitable, niche consumer electronics company known for its elegant industrial design and hampered by a paucity of available software. It was iOS that turned Apple into a juggernaut. For the person who shepherded the company’s biggest success to get sacked is a big deal. And the reasoning behind it—persistent personality clashes with other key executives—is a troubling sign that with Jobs gone, the company may not be able to hold together the kind of all-star team it needs to keep innovating and succeeding.

It’s true, of course, that Forstall has also been associated with some problems recently, most notably the release of Apple’s Maps app with weak underlying data. But the Apple/Google Maps relationship was untenable in the long term, and it was severed at the right time. Switching to a new platform necessarily set Apple back in terms of data quality, simply because there’s no way to gather the user data you need to improve the system without releasing the product into the world. Moving forward on its own was a calculated risk that offered the company its only hope of ever developing a map app superior to the one that ships with Android.

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Still, it’s clear that the real story behind Forstall’s firing has relatively little to do with Maps per se.

Instead, as Reuters has written, the tensions have been “years in the making” and are driven by personality issues. Forstall allegedly refused to sign a Maps apology letter and Bob Mansfield, another key executive who abruptly retired and unretired from the company in recent months, didn’t want to work with him. As John Gruber, dean of the Apple bloggers, put it, “this is about Forstall’s relationship with the other senior executives at the company. Personalities and politics, not rich Corinthian leather.”

That’s a dead-on analysis, but consumers shouldn’t be so sanguine about it.

One of the greatest challenges facing a company like Apple is how to retain the best people. Its senior executives are all rich and successful and could retire in comfort or easily obtain funding to start their own companies. Under those circumstances, how do you keep people like that working for the man? Well, one way is to not subject them to other people they dislike. So if you want to keep Mansfield, you ditch Forstall. But it looks in retrospect as if one of Jobs’ main assets was that he had the prestige and the charismatic leadership necessary to keep the team together. As Apple’s founder and savior, he was the undisputed leader. If Forstall was the best person to lead iOS, then he was going to lead iOS, and everyone else would learn to deal with it.

None of which is to say that firing Forstall was the wrong move. If that’s what had to be done to keep the rest of the key executives happy, then it was clearly the right one. Om Malik reports that “Steve Jobs and Forstall were close, but none of the executives really cared for the deposed iOS chief.” With Jobs gone, Forstall became the odd man out as “there have been fissures in the management team for a while.” But even better than making the right choice would be not getting forced to make the choice at all. As long as Jobs was around, everyone was made to collaborate. With Jobs gone, a key leader gets fired under a euphemistic press release about “changes to increase collaboration across hardware, software, and services.”

What’s more, Forstall isn’t being replaced by anyone. Instead, his responsibilities—overseeing the operating system for Apple’s key products—have been parceled out. Maps and Siri go to Eddy Cue, who’ll run online services. Mansfield is overseeing all wireless technologies. Software user interface is going to industrial design head Jony Ive, and the leader of the Mac operating system team will oversee a rump iOS squad. In other words, no new princeling will be allowed to amass the level of power that Forstall once had.

The remaining members of the executive team, it seems, are all comfortable with one another, and now they’re closing ranks and pulling up the ladder. But this kind of politicking is exactly the kind of thing that turns successful companies into stagnant ones. Executives at a company as profitable and cash-rich as Apple can afford to run things however they please. A forceful personality like Jobs could steer the ship, but—adept though he may be—new CEO Tim Cook is no Steve Jobs.

Cook’s decision not to try to play the part—to give up on herding cats in favor of simply purging the herd of troublemakers—may be the right call at this moment. But it’s also a reminder that all business empires eventually crumble. A team of stars is going to be a team of egos. As long as Apple had a superstar at the top, that was OK. Under Cook it’s not. That hardly means collapse is around the corner, but it’s a big step in the direction of complacency and away from excellence. Fans of Apple’s products should be worried.

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