Apple's future without Steve Jobs won't be as bright

Today is an important, perhaps defining, day for Apple. As US stock markets open, investors will give their vote of confidence about the company's future. Yesterday, in a stunning and unexpected announcement, Apple CEO Steve Jobs took another medical leave, but this time with no set time period like the last one. "When, or perhaps that should be if ever, will Jobs return and what does it mean for Apple?" is question of the day. Later, after the stock market closes, Apple plans to announce holiday quarter earnings results.

"Strange they left it until a day that the stock markets are closed," observed Betanews reader Brian Butterworth. Commenter rrode74 made similar observation: I have zero doubt Apple announced this [yesterday] when US markets are closed. Apple manipulates even when Steve's health hangs in the balance. With the stock having climbed so high so fast, even with Steve it will hit a peak and come down. This could bring it down much faster." Apple opened at $327.05, or about 5 percent off the previous close.

Fast-flying Apple

How has the stock "climbed so high so fast?" Jobs took his last medical leave two years ago this month. Apple shares traded for $82.33 on Jan. 16, 2009 and closed on Jan. 14, 2011 at a 52-week high of $348.48. While markets were closed yesterday in the United States for the Martin Luther King Jr. birthday holiday, they were open in Europe. Apple shares fell nearly 10 percent on the Frankfurt exchange before closing down by more than 6 percent. Will US investors similarly respond, or will a day to think things over and the promise of strong holiday quarterly sales mollify their worries?

To gage the mood in one part of techdom, yesterday I asked Betanews readers: "What future does Apple have without Steve Jobs?" "I am under the impression that Jobs proverbially rubs every new device with a diaper before it goes out the shop doors," Daniel Fletcher expressed by e-mail. "If this is true, what will happen to new Apple products -- or at least how much will his absence affect peoples' psychological perception of each Apple product having personally received 'the Master's touch?'"

"No one person comes up with all the great ideas at Apple, but someone has to decide which ones to green light," Lee Meade wrote in comments. "And that's what Jobs has done at Apple on a level unparalleled anywhere. Can't see Apple continuing this amazing run of product successes without Jobs around to make those final calls."

Betanews reader Kevin Baron sees a powerful team capable of going on without the cofounder and iconic visionary: "Jobs if anything has whipped into shape a very amazing creative team, which he should be given credit for. There is a lot of great talent at Apple that understands Apple and knows how to make great products. Apple will go on just fine without Jobs. And that's a credit to Steve Jobs leadership for many years. Having said that I wish him luck and good health."

Matt Shulman agreed. "Steve Jobs turned Apple around and was a huge part in where it is today. At this point though, is he the sole person behind all their new ideas? I tend to think he's not and that with the success they've had, it shouldn't be too hard for them to keep going without him when needed. Even with Steve Jobs at the helm, I think they are going to be facing far more competition than they have in the next couple of years."

Steve Jobs' Return from Exile

How big was the turnaround? In 1996, Apple was near financial collapse. The company's failure to timely release a new operating system and Microsoft's huge Windows 1995 success exacerbated existing structural problems. Then, right near year's end, Apple unexpectedly bought Jobs' NeXT Computer company, bringing back a cofounder ousted during a 1985 boardroom coup. By summer 1997, Jobs had assumed interim CEO status (he also was Pixar's chief executive), obtained a $150-million Microsoft investment as part of an intellectual property settlement and secured a five-year Macintosh Office development commitment. The following year, Apple released the trendy translucent iMac and showed a promising rebound until summer 2000, when the recession smacked most tech companies. Apple shares collapsed.

Meanwhile, Apple pushed ahead with investments, with four in 2001 that would be foundational for major products available today. They were, in order of 2001 launch: iTunes, Mac OS X, Apple retail stores and iPod. Still, eight years ago, Apple shares traded in the doldrums. On Jan. 7, 2003, when Merrill Lynch recommend "sell" on Apple, shares traded for $14.85. Today, Apple's market capitalization is second only to Exxon and the company has more than $50 billion in the bank. If Jobs doesn't return, he will leave behind a company on solid footing by most every measure but one: Perception. Fickle investors could look at current solid financials and product pipeline and not worry, or they could run from the stock for fear of the future. As I've stated so many times, in business perception is everything.

"It's debatable whether or not Steve Jobs is personally involved in so many minute details of Apple product design and strategy," writes Betanews reader Greg Glockner. "However, it's widely believed that he does, and Apple has done little to dispel this theory."

There it is, the perception problem -- that Apple and Jobs are one. Rene Gutierrez observes that Jobs' last medial leave was but six months and the product pipeline by no means dried up: "The crucial question here is not whether Apple can survive a six-month sabbatical, but whether they can survive without him at the helm, period."

Readers Express Their Fears

For Gutierrez it is the distant and not the recent past that is foreboding: "Remember what happened to Apple when he left for good back in the 80s? While he may not be involved in every detail of his company, he is still the person who oversees the most important projects, rallies the troops, creates the 'whiz bang' aura with consumers and serves as the visionary for the company. That is something you can't substitute just with anyone. Just ask Microsoft what life has been like without Bill [Gates]."

"The departure announcement 'I'm going but I'm still going to be involved' suggests that Apple knows a lot of the share price is the Jobs-distortion-field, or perhaps sadly that Jobs in reality has entered a terminal disease phase," Butterworth commented. "If Jobs really just wanted to have some time off, Apple would have announced this on a 'normal day'; this way looks very suspect. A company the size and value of Apple should have more than one star. The impression is always that the company is the star, and if the star fades, so does shareholder value."

Brian Kramer also is concerned and wonders what investors will do: "I think the market's reaction to a leave of absence, and leaving the company are going to be two very different things. Steve leaving the company could have not only a devastating effect on the stock price, but also product development past the 1-2 years already laid out."

Douglas Utley shared a sentiment similar to what I read several places yesterday: "This just goes to show no matter how much money Steve has or how much better he thinks he is than everyone else, in the end some of the poorest of the poor have something much more valuable than Steve Jobs will ever be able to obtain again: Health."

Whatever happens today or the months ahead, I want to close by wishing my best to Steve Jobs and his family. Anyone want to sign a giant get well card?

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