Golden handcuffs no longer cut it, Apple needs to deliver on AI and cutting-edge hardware

There’s another group of people that’ll be following the event closely, but not out of tech-savvy geekness. I’m talking about Apple shareholders like the Vanguard Group and BlackRock. They’re not that interested whether the iPhone 16 Pro could get those rumored 40W wired fast charging speeds, compared to the iPhone 15 Pro’s measly 27W. In contrast, what they’re interested in is their investments – is Apple going to sell much stuff with the Apple logo on it? Is the company stable? Is it stable enough to hold our shares in the company?

Just the other day, it became known that Tim Cook’s strategy after Steve Jobs’ passing was… senior employees who barely work.

Let me explain a bit more about it and why I think it’s not an adequate strategy for 2024.

Genies with golden handcuffs at Apple’s headquarters: how and why?

Apple has long relied on a retention strategy known as “golden handcuffs” to keep key figures on its payroll, even when their day-to-day involvement diminishes.

This tactic, which has been used since Steve Jobs’ passing in 2011, aims to maintain stability and reassure shareholders by keeping influential figures like Bob Mansfield, Jony Ive, and Phil Schiller associated with the company.

Mansfield, a key hardware engineer, was persuaded to stay with substantial financial incentives despite wanting to leave, and Jony Ive, a highly regarded designer, remained on the payroll while working minimal days until his final departure from the company in 2019.

Phil Schiller, another notable Apple figure, now serves as an “Apple Fellow”, a role designed to retain his expertise and prestige while contributing in a more limited capacity. Recently, it was revealed that Apple CFO Luca Maestri will step down from his position in 2025 but will continue to provide counsel to CEO Tim Cook.

That’s not as unusual as you might think

Golden handcuffs are a common strategy in the corporate world, particularly among tech giants aiming to retain top talent.

For instance, Google has been known to offer significant financial incentives, such as stock options and bonuses, to retain key employees, especially during critical periods of product development or when competitors are aggressively poaching talent.

Microsoft has also employed similar strategies, offering senior engineers and executives substantial retention packages to ensure continuity and stability during pivotal transitions, such as its shift to a cloud-first approach

Meanwhile, companies like Amazon have used golden handcuffs to retain talent through lucrative stock options that vest over several years, encouraging employees to stay longer to maximize their financial gains.

The question, however, is whether such approaches remain viable in a fast-paced, innovation-driven market.

I think not.

The competition is very real

Apple’s dominance in the premium smartphone market is no longer unchallenged, as numerous flagship devices from competitors are gaining popularity and offering compelling alternatives.

Brands like Samsung, Google, Huawei, Honor, Oppo, OnePlus, and Xiaomi – hey, let’s not forget Nothing – have significantly stepped up their game, delivering high-quality hardware and innovative features that rival, and in some cases surpass, the iPhone.

The ubiquitous Galaxy S Ultra is extremely popular and potent, Google’s Pixel line gets more and more premium, while the Far East champions are off the hook, to put it mildly. Chinese flagships, while often arriving with mind-boggling bloatware, do so also with extremely capable cameras, state-of-art chipsets, fast RAM and storage, ultra-fast charging, and so much more.

There’s no point in even mentioning foldables, as Apple doesn’t even offer such devices. They probably think people are not yet ready for foldables.

Yeah, right.

Just ask anyone out there with a OnePlus Open if they’re ready to get back to the regular slab phone. “Thanks, but no thanks!”, is what you’ll hear.

One more thing: AI. Apple is also behind the rest of the competition when it comes to that artificially intelligent magic.

At the end of the day, who cares about senior officials?

While Apple’s practice of using golden handcuffs might resonate with shareholders concerned about the departure of key figures, this means absolutely nothing to the average Apple user.

Regular buyers of Apple (and any other brand, really) products typically aren’t familiar with many of the company’s senior figures, apart from the more visible CEO – in Apple’s case, that’s Tim Cook.

For most consumers, what matters is the product experience and innovation they get from using Apple devices, not who is at the helm behind the scenes.

While shareholders might focus on the impact of executive changes on Apple’s stock performance and long-term strategy, everyday users are more interested in whether their new iPhone has the latest features or if Apple’s next software update will enhance their user experience.

I get the feeling that shareholders will be happier if Apple sells more iPhones, rather than if it keeps another senior millionaire around for another year or two.

As the competition gets more and more fierce – and consumer’s expectations evolve – Apple may need to pivot its focus from retaining big shots to delivering on the innovation its users crave. That’s how you sell more iPhones.