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March 07, 2014

Comings & Goings: Apple Facing Challenges in Wake of CFO Oppenheimer's Retirement

Apple announced Tuesday that its CFO, Peter Oppenheimer, will retire at the end of September. Former Xerox CFO, Luca Maestri, will take over Oppenheimer’s position during a transition period that will begin in June. The move comes after Apple has experienced unprecedented growth, but lately shows signs of slowing down.

Oppenheimer joined Apple in 1996 and became its CFO in 2004. In the past decade, Apple’s annual revenue exploded from $8 billion to $171 billion and the price of a share of Apple stock increased a whopping 4,659 percent during that same time.

Maestri takes over with impressive credentials. In addition to serving as the Xerox CFO, he was previously CFO at Nokia Siemens Networks and GM’s European operations.

Impressive credentials won’t help the bottom line, however. The challenge that Maestri and the rest of Apple management face is to determine where the company should go next after revolutionizing the mobile device industry.

Part of the reason has to do with the growth of smartphone sales slowing down. According to research firm IDC, global smartphone sales growth in 2013 was 39.2 percent, with 1 billion units shipped. This rate will drop to 19.2 percent in 2014 with 1.2 billion units. By 2017, the growth rate will dip below 10 percent.

The world is gradually running out of new smartphone customers and so far, Apple’s attempts to create new markets fail to impress market analysts.

“Frankly, we just couldn’t quite bring ourselves to use smart watches or TVs as reasons to raise numbers – nor were we fully convinced that these products could move the needle like new categories did in the old days," said Barclays analyst Ben Reitzes in a February report that downgraded Apple stock. "As a result, we believe it is time to step aside, given a maturing smart phone market." 

The passing of a visionary like Steve Jobs has so far left Apple frustrated in its search for the next technological product to take the market by storm. He saw great opportunity in using mobile phones as a device for more than just making phone calls and Apple made a fortune greater than many countries’ GDP as a result. Replacing the CFO is one thing, but without a replacement like Jobs, it appears Apple has plateaued.  

Edited by Cassandra Tucker

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