SAN FRANCISCO – Apple is known for producing great products, including the iPod. Now Google with its acquisition of Nest Labs and its Apple alumni founder Tony Fadell is hoping it produces great leaders who can replicate that success as well.
It’s a gamble that has proved disappointing for companies from Palm to J.C. Penney.
Fadell, who oversaw development of Apple’s iPod, was a star attraction in Google’s $3.2 billion purchase of home-management startup Nest.
Just as Apple’s music player sparked the company’s shift from a niche computer maker into dominance in mobile devices, Nest may help Google push its software and services into a new generation of connected household items.
Fadell will have to break the run of ex-Apple executives who have yet to replicate the iPhone maker’s success at their new employers. Managers at Apple – distinguished by its secretive culture and narrow focus on a few products – don’t necessarily flourish at companies with more traditional and cooperative structures.
Apple is not known for producing leaders – it produces products, said Ram Charan, a management consultant who has acted as an adviser to Jack Welch, former General Electric Co. chairman and chief executive officer, and Ivan Seidenberg, former chairman and CEO of Verizon Communications Inc.
Some high-profile defectors have already struck out. Two years after leaving Apple, Jon Rubinstein took over product development at handheld computer maker Palm and became CEO there in 2009. The failure of Palm’s Pre smartphone led to its sale in 2011 to Hewlett-Packard Co. Within a year, its new owner ended production of Palm phones and Rubinstein left the company.
Former Apple retail chief Ron Johnson was ousted as CEO of J.C. Penney in April after presiding over a 25 percent decline in annual revenue at the department store. His firing came less than two years after he left Apple, which he had helped make the world’s leading retailer in sales per square foot.
Other executives have yet to make a mark at their new employers. Intel, which has been struggling to get mobile- phone makers to use its chips, hired Mike Bell, also a former Palm and Apple executive, to lead that effort. Four years later, the chipmaker has less than 1 percent of the market for smartphone processors and hasn’t made a dent in Qualcomm’s dominance.
Intel’s only rival in personal-computer chips, Advanced Micro Devices, is also trying to rebuild its business after years of market-share losses by hiring at least three former Apple hardware-engineering executives: Mark Papermaster, Jim Keller and Raja Koduri. Their technical skills, which helped shape key components of the iPhone and iPad at Apple, haven’t yet helped AMD gain back ground in PCs, and the company is still trying to return to profit amid a new focus on custom products for devices such as game consoles.
Papermaster has led AMD’s engineers in delivering chips on schedule since he joined the company in 2013, and the other two executives are working on future designs, said Drew Prairie, a spokesman for AMD. Intel and Apple representatives declined to comment.
The former Apple executives’ records are especially unremarkable when compared with their former employer, which under the leadership of co-founder Steve Jobs transformed itself from the edge of bankruptcy into the world’s most-valuable company.
Jobs’ pursuit of his vision for phones and computers left a string of companies struggling to catch up with the sweeping changes in consumer tastes he ushered in.