Tim Cook's Most Defining Move at Apple Has Nothing to Do With AI

Investors will more than likely view the Tim Cook era at Apple (NASDAQ: AAPL) with fondness. Cook had the daunting task of taking Apple forward without the creations of its chief innovator, Steve Jobs, which had driven the company's success over his nearly 14 years of leadership.

During Cook's tenure, the stock rose more than 2,200%, turning Apple into a multitrillion-dollar giant. Nonetheless, when Cook moved into the executive chairman role, Apple appeared to have fallen behind in artificial intelligence (AI). Instead, investors will more than likely remember Cook for one defining move.

Image source: Apple.

Tim Cook's tenure at Apple

Cook lacked Jobs' inventive prowess, but he still expanded Apple's technical ecosystem, beginning in earnest with the launch of the wearables segment.

In September 2014, Cook announced the introduction of the Apple Watch, the first new product category since he became CEO. The company released its watch in April 2015, and it introduced health and wellness monitoring, fitness tracking, and safety features into the Apple ecosystem.

Moreover, the Apple Watch made significant improvements during subsequent upgrades. It added features such as GPS, water resistance, fall detection, and blood oxygen monitoring, and, recently, sleep apnea notifications, which increased its value and gave users good reasons to upgrade.

Effects of launching the wearables segment

Furthermore, this gave Apple Watch a competitive advantage over companies like Fitbit by integrating with the iOS ecosystem. This either forced competing products out of business or, in Fitbit's case, led to a merger with Android operator Alphabet.

Additionally, this success likely inspired the creation of Apple Services as a formalized segment in 2014. Services existed in some form with the introduction of the App Store in 2008 and the iCloud in 2011. It steadily expanded over time, introducing Apple Pay in 2014, just before the introduction of the services segment, and Apple Music in 2015.

In 2019, Apple introduced Apple TV+, Apple Arcade, and other additions to its ecosystem. Admittedly, these were not as innovative as the Apple Watch, but they played a key role in expanding Apple's ecosystem and have often been the fastest-growing part of Apple in recent years.

Tim Cook's time at Apple

Tim Cook's introduction of wearables redefined the company and showed that it could prosper without Steve Jobs.

Wearables became the most profound move under Tim Cook. It meaningfully enhanced functionality on Apple's iOS operating system, beginning a trend that added value for its users and eventually combined a host of more modest offerings into a services segment.

Today, Cook has moved on to the executive chairman position, and it will be the responsibility of the new CEO, John Ternus, to expand on Apple's AI. Nonetheless, Cook and his launch of the wearables segment left a legacy that has and should continue to bolster the tech stock and the Apple ecosystem.

Will Healy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Apple. The Motley Fool has a disclosure policy.