FORTUNE -- In February of this year, a group of investors visited Apple as part of a "bus tour" led by a research analyst for Citibank. The session started with a 45-minute presentation by Peter Oppenheimer, Apple's chief financial officer, and the 15 or so investors who attended the session were treated to Apple's unique brand of hospitality: They met in a threadbare conference room in Apple's Town Hall public conference center at the 4 Infinite Loop building in Cupertino, Calif., where the refreshments consisted of "three stale cookies and two Diet Cokes," in the words of one participant.
All that, save the meager refreshments, is routine for big public companies in Silicon Valley, which use the check-ins as opportunities to communicate with large owners of their stock. What shocked the Apple (AAPL) investors that day was that CEO Tim Cook popped into the room about 20 minutes into Oppenheimer's talk, quietly sat down in the back of the room, and did something unusual for a CEO of Apple: He listened. He didn't check his e-mail once. He didn't interrupt.
After the CFO finished, Cook, at that point chief executive of Apple for all of five months, stood to offer his remarks. He strode confidently to the front of the room and held court in the no-nonsense style that has become his trademark. "He was in complete control and knew exactly who he was and where he wanted to go," says one of the investors. "He answered every question head-on and didn't skirt any issue." Cook even offered some color that went beyond expanding on Apple's already disclosed performance data. Asked his opinion of Facebook (FB), Cook called the neighboring upstart "the one company that is closest to being like Apple," adding that he had huge respect for Facebook, with which Apple could work more closely. (More recently Cook doled out guarded praise for another competitor/partner, saying on a financial results conference call that Amazon (AMZN) is "a different kind of competitor" that has "different strengths" from Apple and that "will sell a lot" of Kindles, the gadget that is increasingly competitive to Apple's iPad.)
Here's what's most remarkable about Cook's appearance that day last winter: Steve Jobs wouldn't have bothered. The legendary company co-founder, who stepped down as Apple's CEO last Aug. 24, six weeks before his death, rarely deigned to meet with investors. That was one of Tim Cook's tasks as chief operating officer. It's a subtle but significant change -- investors now have the CEO's ear for the first time in years -- and it's one of many Cook has instituted at Apple as he approaches his one-year mark at the helm. Taken together -- his rapport with Wall Street as well as government officials, his decision to grant a dividend to shareholders, the creation of a program to match employee gifts to charity -- Tim Cook's stewardship of Apple is beginning to come into focus.
A 14-year veteran of the company, Cook is maintaining, by words and actions, most of Apple's unique corporate culture. But shifts of behavior and tone are absolutely apparent; some of them affect the core of Apple's critical product-development process. In general, Apple has become slightly more open and considerably more corporate. In some cases Cook is taking action that Apple sorely needed and employees badly wanted. It's almost as if he is working his way through a to-do list of long-overdue repairs the previous occupant (Jobs) refused to address for no reason other than obstinacy.
What's clear is that Cook is behaving like his own man, putting his stamp on Apple -- including some moves that will court controversy with the Apple faithful, watchful as they are for the slightest deviation from their perception of the Steve Jobs playbook. Cook consistently pays homage to the legacy of Jobs, but he doesn't apologize for charting a new course. He seems, at the end of the day, to be honoring one of Jobs' dying requests: that Apple's management not ask "What would Steve do?" and instead do what's best for Apple.
Considering the widespread handwringing over how rudderless Apple would be without Jobs, it is remarkable how steadily the company has sailed along without him. Wall Street in particular has good reasons -- billions of them, actually -- to love the Cook regime. "The numbers speak for themselves," says Katy Huberty, Morgan Stanley's Apple analyst. The company's market value, for example, is up some $140 billion since Cook took over. At a market cap of about $500 billion, Apple is more valuable than Exxon Mobil (XOM) by $100 billion -- despite Apple's shares being down 15% from their peak. In the three quarters since Cook become CEO, Apple has reported $31 billion in profits and shipped 89 million iPhones and 38 million iPads, all exceeding Wall Street's expectations and continuing, by and large, to delight an adoring customer base. "By any quantitative measure, so far his performance is phenomenal," says Bill Shope, a Goldman Sachs research analyst.
Cook can't take all the credit for those results. He took over a company with the momentum of a rocket ship in midflight. What's more, Cook hasn't yet unveiled a significantly new product, the key measure of sustained innovation that observers are intensely watching for. The only major product introductions so far: The iPhone 4S, which features the Siri voice-activated assistant, and an iPad with better screen resolution, both iterations of previous devices.
Yet behind the scenes there are indications of where Cook is leading Apple. Typically these changes play to the new CEO's background and strengths. Cook is the master of operational efficiency, having joined Apple in 1998 to revamp its badly broken system of factories, warehouses, and suppliers. Notably, he strengthened Apple's cooperation with its contract manufacturers in China.
So it was a personal blow to Cook when the New York Times ran a prominent article in January critical of the working conditions in China at Foxconn, the Taiwanese contract manufacturer that assembles most of Apple's products. Though the criticism wasn't new, the exposé painted a bleak portrait of the lives of workers in the factories. Cook's response marked a distinct change in tone from Jobs, who had been dismissive of the severity of the problem. The new CEO not only visited Foxconn personally, he also allowed himself to be photographed doing so. Apple also joined the Fair Labor Association, an industry-financed third-party monitoring group that has the ability to visit factories and report its findings independently. (Apple says its membership in the group had been in the works for a year.)
Nevertheless, Cook's Apple appears to be doubling down on its manufacturing in China. Late last year Apple disclosed for the first time the dollar value of its assets there: $2.6 billion. Given that Apple had just six retail stores in China at the time, the number spoke to the value of the material and equipment Apple has bought on behalf of its suppliers. Apple risks its own capital -- with $110 billion in cash at last count, it has plenty to risk -- as a way of financing massive upgrades in its manufacturing capabilities in Asia, even though its partners will operate the equipment.
Apple generally is mum on what the investments are for, but with disclosed projected capital expenditures of $7 billion in 2012, Apple is gearing up for big growth, analysts assume. "That's got to be for volume," says David Eiswert, a portfolio manager at T. Rowe Price, which owns 24 million shares of Apple. He notes that Apple suppliers like Pegatron and Jabil (JBL)have been buying sophisticated machine tools and that Japanese drill-bit manufacturers say they are moving into consumer electronics. Eiswert says he assumes it is all on Apple's behalf. "The Apple supply chain is doing things no one else can," given its abundance of cash and manufacturing know-how, Eiswert notes. The moves, he and other observers say, have Cook's fingerprints all over them.
Such operational efficiencies have been an underappreciated factor in Apple's success for the past decade; all the attention has been on its beautiful designs and snazzy marketing overseen by Jobs. If anything, Apple under Tim Cook will embrace efficiency to an even greater degree, especially as the company grows bigger and more complex -- to the dismay of those who think techies should rule the roost. "It looks like it has become a more conservative execution engine rather than a pushing-the-envelope engineering engine," says Max Paley, a former engineering vice president who worked at Apple for 14 years until late 2011. "I've been told that any meeting of significance is now always populated by project management and global-supply management," he says. "When I was there, engineering decided what we wanted, and it was the job of product management and supply management to go get it. It shows a shift in priority."
Indeed, allowing anyone to interfere with the creative-genius engineers is anathema to the Steve Jobs ethos at Apple. Sniffs one engineer: "This leads to more sharing of resources, which leads inevitably to fighting, which leads to weaselly excuses." They are normal corporate concerns, in other words, and very un-Apple-like.
It is treacherous to attempt to read too much into potentially isolated changes at Apple in the short time that Steve Jobs has been gone. Yet the scrutiny on the world's most watched company is enormous. As an example, in another much discussed critique, the New York Times used Apple's multinational tax-mitigation policy as a case study of the lengths to which U.S.-based corporations will go to lighten their tax burdens.
No action goes unnoticed when it comes to Apple, no matter how small. A former Apple employee recounts, for instance, a recent lunch with a current Apple engineer. At the end of the meal the ex-Apple worker, now at a Silicon Valley startup, assumed his buddy immediately needed to get back to work. "He said, 'Eh, I have time for coffee if you like.' " The outsider's conclusion: "I think people are breathing now." It's not necessarily a compliment.
Elsewhere there are signs of Apple becoming a more normal company. When Adrian Perica, a former Goldman Sachs (GS) banker, joined Apple several years ago, he was the only executive whose sole remit was dealmaking. Steve Jobs basically ran M&A for Apple. Today Perica heads a department with three corporate-development professionals under him and a staff supporting them, so that Apple can work on three deals simultaneously. Indeed, the vibe, in the words of a former employee, is of an Apple that is becoming "far more traditional," meaning more MBAs, more process, and more structure. (In point of fact, 2,153 Apple employees reference the term "MBA" in their LinkedIn profiles out of a nonretail workforce of nearly 28,000. More than half the employees who reference "MBA" have been at Apple less than two years.)
The ultimate "tell" of tectonic changes at Apple will be the quality of its products. Those looking for deficiencies have found them in Siri, a less-than-perfect product that Apple released with the rare beta label in late 2011, a signal that the service shouldn't be viewed as fully baked. Siri's response time has been slow, meaning the servers and software powering it are inadequate. "People are embarrassed by Siri," says one former insider. "Steve would have lost his mind over Siri."
Obviously, no one can say for sure how Steve Jobs would have reacted to anything that's going on at Apple, and Cook seems increasingly comfortable leading the company where he thinks it should be going. Jobs was opposed to dividends and stock buybacks, for example. Yet Cook repeatedly prepared investors for a coming dividend by stating publicly that he had no "religious" opinion about them. Apple announced on March 19 that it would begin paying a quarterly dividend of $2.65 a share and buy back $10 billion worth of stock.
In many ways, though, Cook's unspoken message is that life goes on and that Apple is still Apple. In mid-April the company took over the Carmel Valley Ranch hotel complex for its first ultra-secretive "Top 100" meeting since Jobs died. The hush-hush conclave is a rare opportunity for top managers -- not necessarily chosen by rank, but rather by the CEO's assessment of who are the most valuable contributors at any given time -- to learn what products and services are on tap for the next year and a half or so. Following tradition, Cook required his executives to travel the 80 miles from Cupertino to the resort on chartered buses so that their comings and goings could be controlled. He also asked several executives to make presentations to the group -- just as Jobs had done.
A difference, according to multiple secondhand reports of the retreat, is that the spirit of the meeting was upbeat and even fun. Cook was said to be in a jovial, joke-cracking mood -- a stark contrast to the grim and fearful tone Jobs engendered at the meetings. Participants left the Top 100 energized about Apple's near-term outlook, presumably having seen Apple's next iPhone and perhaps its long-awaited television product too. One veteran executive was "blown away" by what he had seen, says someone this executive spoke to afterward. Reports another person with access to top-level Apple executives: "People came away totally comfortable with where the company is headed."
Cook also has assumed Jobs' role of outward-facing schmoozer. An influential tech company CEO who met recently with Cook found him to be "down to earth, noncorporate, detail-oriented, and disarming," the latter being a frequent refrain about Cook. "He's casual, grounded, and easy to talk to," says this executive. "I forgot he's the CEO of Apple. And that was not my experience with Jobs." Other signs of a CEO-level glasnost abound. Cook has indicated a willingness to resolve patent litigation with Samsung, an important Apple supplier as well as a competitor. He even made the rounds in Washington, D.C., in mid-May, telling congressional leaders that he intended to be personally accessible to them.
As operations chief, Cook flew so far under the radar that he was practically invisible outside the company. Apple, after all, was a company dominated by one personality, whose persona was tightly wound up with Apple's public and private image. As CEO, Cook has begun to sprinkle his narrative into his comments. In a February appearance at an investor conference hosted by Goldman Sachs, for example, he mentioned that he had worked at a paper mill in Alabama and an aluminum plant in Virginia -- new facts in Cook's story.
The personal tidbits serve to humanize Cook, who is intensely private, with few hobbies other than fitness and spectator sports. He vacations at the Canyon Ranch resort in Arizona, where guests who have seen him there say he keeps to himself, often dining alone, reading on his iPad. He said during the appearance at the Goldman Sachs conference that he couldn't live without his Apple TV -- raising the question of what he's watching, given that a year earlier Cook told a shareholder at Apple's annual meeting that if it wasn't on CNBC or ESPN, he hadn't seen it. (Historical trivia of note: The shareholder had asked Cook whether he had seen Mike Daisey's now notorious one-man act The Agony and Ecstasy of Steve Jobs when it was playing in Berkeley. He had not.) Cook also has been showing his dry wit of late, telling investors before the dividend announcement that Apple wouldn't "go have a toga party or do something outlandish" with its cash.
For all his new demonstrations of extroversion as CEO, Cook has kept the news media at arm's length. He has granted few interviews, and Apple declined to make him available for this article. Indeed, Apple seems intent on doling out its new CEO in carefully scripted morsels. Writing in Time's list of the 100 most influential people of 2012, Apple board member Al Gore praised Cook for leading Apple to new heights "while implementing major policy changes smoothly and brilliantly." When queried by Fortune, neither Apple nor Gore would explain precisely what policy changes the former vice president of the United States was referring to.
Even as he tweaks the Apple operating manual, Cook goes to great pains to pledge allegiance to the corporate culture Steve Jobs created. Asked at the Goldman investor forum how his leadership might change Apple and what of its culture he intended to maintain, Cook ignored the first part of the question and focused only on the latter. "Steve grilled in all of us over many years that the company should revolve around great products and that we should stay extremely focused on few things rather than try to do so many that we did nothing well." He called Apple a "magical place" where employees could do "their life's best work."
For their part, most Apple employees seem more than satisfied with Cook. He often sits down randomly with employees in the cafeteria at lunchtime, whereas Jobs typically dined with design chief Jonathan Ive. It is a small difference that speaks volumes about how employees can expect to interact with their CEO. At Apple, Jobs was simultaneously revered, loved, and feared. Cook clearly is a demanding boss, but he's not scary. He's well-respected, but not worshiped. As Apple enters a complex new phase of its corporate history, perhaps it doesn't need a god as CEO but a mere mortal who understands how to get the job done.
By Adam Lashinsky CNNMoney.com May 24, 2012
How Tim Cook is changing Apple - Fortune Tech