Inside Apple's major shakeup

October 29, 2012: 7:02 PM ET

What is really behind the biggest management shakeup at Apple since the Steve Jobs putsch that eliminated Gil Amelio in 1997?

FORTUNE -- Tim Cook's honeymoon at Apple is over.

Apple's (AAPL) CEO announced the departure of mobile software chief Scott Forstall on Monday. He also booted retail chief John Browett, who lasted all of eight months after having been hired from the U.K. retailer Dixons. The moves, together with the divvying up of Forstall's responsibilities among four other executives, constitute the biggest management shakeup at Apple since the Steve Jobs putsch that eliminated Gil Amelio in 1997.

Indeed, as Hurricane Sandy barreled toward the East Coast, a worsening storm embroiled Apple too. Suffice it to say that even as Apple's stock-market valuation has made the company the biggest in the world, these past few months haven't been Apple's finest. Little by little, mistakes that, taken in isolation, might have seemed trivial have added up to represent a company that needs to get its act together. Consider:

* Apple has missed Wall Street's expectations for two consecutive quarters. Neither "miss" was meaningful from a financial perspective. But Apple exceeds. It doesn't underperform.

* Apple has been slow to expand its retail presence in China. Browett also tried to nickel-and-dime his employees. Apple observers scratched their heads as to why the chief of an electronics discounter was the right guy to run the Tiffany's of the device world. Apparently he wasn't.

* Siri, the service introduced the day before Steve Jobs died, just wasn't that good. It wasn't terrible either. But again, we're talking about Apple here, not Microsoft (MSFT) or even Google (GOOG), which has a habit of releasing software in beta.

* Advertising mavens criticized ads that Apple ran during the Olympics for being unfunny and for belittling Apple's own customers. Then Samsung created legitimately humorous spots that lampooned Apple. What's wrong with this picture?

Then came maps. A profoundly bad product. So bad that Apple had to apologize for them. As an ode to Apple's famous simplicity, nothing more really needs to be said on the subject.

It is being said that Forstall didn't get along with Jony Ive. The knighted designer won that battle. Apple named him the chief of all "human interface" on Monday. Reading between the lines, that means software in addition to hardware. Design lovers hated the paper "shredder" that Apple introduced with its Passbook product. Ive, a fan of minimalism, must have hated it too. Watch for Apple to kill it.

MORE: Would Steve Jobs have released Maps?

I also heard that Forstall refused to sign the letter apologizing for the mapping fiasco, sealing his fate at Apple. (He has worked for two companies in his career, both founded by Steve Jobs: Next and Apple. He's also a big San Francisco Giants fan. Win some, lose some.) Seeing as Forstall oversaw and publicly demoed Siri and maps, we know at least that the Apple culture is intact: Forstall was the directly responsible individual, or DRI, on Siri and maps. Now he is gone. He will remain an advisor to Cook until "next year," Apple said in a post-market news release. This is a formality intended to keep Forstall from ringing up Samsung.

The other changes are just as significant. Craig Federighi, the head of Mac software, takes over mobile software as well. Forstall was known to be a polarizing figure at Apple, meaning that his loyal team now reports to someone else. Apple assigned Siri and maps -- the two black eyes -- to Eddy Cue, head of online services and long Apple's Mr. Fix-it. (He cleaned up and eventually killed MobileMe too.) Lastly, Apple signaled that the recently unretired Bob Mansfield will oversee technology, notably wireless technology. It does not suggest that Cook's hands are firmly on the steering wheel when a veteran executive announces his retirement, only to be placed in a critical role overseeing initiatives key to the company's future.

A final word on Tim Cook. In only a year on the job he led Apple to new heights. He has pleased investors, listened to employees, mollified critics of the company's labor policies and overseen the introduction of products that have sold exceedingly well across the world. He even has shown humility by apologizing for the mapping snafu.

MORE: Apple: One year under Tim Cook

One thing Cook has been unwilling to do, however, is explain himself. In his very few public utterances he has mouthed platitudes. Steve Jobs too played cat-and-mouse with the public, revealing what he wanted, when he wanted. But Steve Jobs earned his caginess. He got the benefit of the doubt after silencing the doubters. Cook isn't there yet. He needs a new strategy for communicating what is going on at Apple.

Because late-in-the-day announcements while much of the world is worried about a natural disaster will only provoke more questions about corporate disasters in the making.

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About This Author
Adam Lashinsky
Adam Lashinsky
Senior Editor at Large, Fortune

Adam Lashinsky is a San Francisco-based editor-at-large for FORTUNE, covering Wall Street and Silicon Valley. Lashinsky joined FORTUNE in 2001, after two years as a contributing columnist. Prior to joining FORTUNE, Lashinsky covered Silicon Valley for TheStreet.com and The San Jose Mercury News. A Chicago native, Lashinsky holds a B.A. in history and political science from the University of Illinois at Urbana-Champaign.

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