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October 31, 2012

Apple CEO Tim Cook Ousts Scott Forstall, John Browett from Management Team

By Rory Lidstone, TMCnet Contributing Writer

It seems that a management shakeup over at Apple (News - Alert) has analysts declaring this the “beginning of the end” for Apple. Normally, a management overhaul in a company wouldn't be too big of a deal – especially after a new CEO takes over as Tim Cook did in August last year – but when the company in question is Apple, the world's most valuable company, it becomes big news.

Indeed, after the company announced the departures of Scott Forstall, Apple's mobile software head, and John Browett, SVP of retail, Apple shares fell 2.7 percent to $587.70. But with rumors being bandied about that the departures aren't voluntary, maybe some concern is appropriate.

“Both departures were likely forced by Apple’s CEO and weren’t voluntary,” wrote Amit Daryanani, an analyst at RBC Capital Markets. “While there will be concerns about future execution given Mr. Forstall’s departure, we note that Apple has navigated through past turnovers impeccably.”

Forstall won't leave Apple completely until next year, serving as advisor to Cook until then. In the meantime, the rest of Apple's executive team – Jony Ive, Eddy Cue, Bob Mansfield and Craig Federighi – will take on added responsibilities to fill in the gaps.

Forstall oversaw the development of the new iOS maps software as well as Siri, both of which have received some criticism for not meeting Apple's usually high standards. It's also been reported that he often argued with others on the management team. Ultimately, Forstall was dismissed after refusing to sign a public apology to Apple customers for the mapping software's shortcomings.

Browett, meanwhile, was likely dismissed for the changes put into effect since his hiring, including the reduction of staff at some retail locations, cut hours and limited store transfers.

Despite all the gloom and doom being forecasted for the company, the iPhone 5 has been and continues to sell well the world over.

Edited by Braden Becker
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