Questions in the Wake of the Steve Jobs Announcement
The consensus is that the company will be okay
After Apple CEO Steve Jobs announced his resignation, the world mourned. How will Apple continue its gadget dominance without its visionary leader? Well, we have the answer. Given Jobs's health condition, the company had prepared for the move and is ready for a future that may not have Jobs at the helm, but that will very much still include the former CEO. And at least for the foreseeable future, everything is going to be okay.
Just how much is the decision related to his health? Jobs was diagnosed with pancreatic cancer in 2004. His health issues aren't a new development. But his condition also isn't getting any better, reminds The New York Times' David Pogue. "[Jobs] had a liver transplant in 2009 and has had health troubles ever since." While only his "inner circle know how sick he actually is," continues Pogue, Jobs didn't cite his health issues in his resignation letter. And this doesn't necessarily mean he has gotten much iller, adds Bloomberg's Adam Satariano. "While Jobs has been housebound for the last few weeks and his condition is weak, the resignation was not indicative of a sudden worsening," a person "close to Jobs" told him.
Yet The Wall Street Journals's Nick Wingfield asserts that he did indeed step down because of his health: "The company's former CEO Steve Jobs has struggled with serious health issues that finally appear to have brought an end to his tenure as CEO of the company," he wrote. If treated quickly, someone with his type of pancreatic cancer has a high survival rate, yet William Chapman a specialist a Washington University, with no direct knowledge of Jobs' specific case, told Wingfield that the five-year survival rate of those with his condition who receive a liver transplant is only about 50 percent. And even if he isn't on his death bed, he could face other complications, oncologists told Reuters' Poornima Gupta and Edwin Chan. "Such problems include possible hormone imbalances or a recurrence of cancer that is harder to fight once the body has already been weakened."
Was the company ready for the transition? Apple has chosen Tim Cook to succeed Jobs and has been priming him and the company for some time. "The board had had a succession plan for several years, but kept it confidential for competitive reasons," The Wall Street Journal's Joann S. Lublin and Scott Thurm write, summarizing remarks from Apple spokeswoman Katie Cotton. The board kept most of the moves under wraps, wanting to protect Jobs and the company, a management psychologist who specializes in CEO succession told Lublin and Thurm. "The board was trying to protect Jobs and protect against the appearance of having unstable leadership at the top.'' Cook has stepped in during Jobs's previous medical leaves of absence reports Lohr.
What will the company's creative future look like without Jobs? The Steve Jobs vision has led to the creation of game-changing products. Does anyone else have that spark? It doesn't really matter--at least not in the short term. "The good news for Apple is that the product road map in this industry is pretty much in place two and three years out," David B. Yoffie, a professor at the Harvard Business School told The New York Times' Steve Lohr. "So 80 percent to 90 percent of what would happen in that time would be the same, even without Steve." Pogue seconds that sentiment, reassuring Apple lovers that the "pipeline is already stuffed with at least a couple of years’ worth of Jobs-directed products. In the short term, you won’t see any difference in Apple’s output of cool, popular inventions."
"The real challenge for Apple," Yoffie continued, "will be what happens beyond that road map. Apple is going to need a new leader with a new way of recreating and managing the business in the future." Jobs will still remain involved, reminds AllThingsD's Walt Mossberg. "To be very clear, Jobs, while seriously ill, is very much alive. Extremely well-informed sources at Apple say he intends to remain involved in developing major future products and strategy and intends to be an active chairman of the board, even while new CEO Tim Cook runs the company day to day." And even the day he announced he was leaving, Jobs was hard at work, reported Satariano. "Jobs was in Apple’s Cupertino, California office for the entire work day, and he attended a regularly scheduled board meeting, according to a person close to Jobs, who was not authorized to speak about the executive’s health."
But can it maintain its market dominance? Just two weeks ago we reported that Apple overtook Exxon as the most valuable company. Without Jobs, can it keep its upward trajectory? Right after the Jobs announcement the markets reacted negatively, reported Gupta and Chan. "Apple's stock traded down 4.1 percent in Frankfurt on Thursday, following a drop of as much as 7 percent in U.S. after-hours trading when Jobs' departure was announced." But the stock should bounce back, given that the market expected his departure, explains Wired's Michael Travierso. "Ultimately, Walker said, the market had already priced Jobs’ departure into the stock."
"Frankly it removes an overhang. People didn't know when this would happen or when the day would come. It’s probably the best outcome," Michael Walker, Portfolio Manager for WP Stewart told Reuters. As the BBC's Rory-Cellan Jones explains, "Analysts said the resignation was not unexpected, and would have little impact on the day-to-day running of the company."