Can Apple still be Apple without Steve Jobs?

The co-founder of the tech giant says he can't continue as CEO. Tim Cook, the acting CEO since January, will replace him. Jobs' company has been a major tech innovator and sports a market cap exceeded only by Exxon's.

By Charley Blaine Aug 24, 2011 7:53PM

Steve JobsUpdated: August 25 at 8:45 a.m. ET

 

Steve Jobs always introduced Apple's (AAPL) new products. He was always the keynote speaker at Apple's annual developers conference. He sometimes participated in analyst calls. One rarely saw anyone other than Jobs representing Apple in public venues.

That will change now that Jobs, 56, has resigned as Apple's chief executive. That creates a challenge for Apple because few companies have been as much wrapped up in the persona of its boss as Apple.


And if Jobs isn't there, what happens next?

The challenge was already apparent in the market reaction to Jobs' resignation late Wednesday. The shares were off 5.1% after hours to $357.10 after closing at $376.18, up 0.7%, in regular trading. The shares are up 16.6% this year, compared with a 6.4% decline in the Standard & Poor's 500 Index ($INX).

But by Thursday morning, Apple's stock had recovered somewhat and was only down just 2.4% in pre-market trading. That's still enough to affect U.S. stocks, but futures trading in the S&P 500 and the Nasdaq-100 Index ($NDX.X) indicate stocks will open mixed. Analysts comments Thursday were reassuring, with Citigroup suggesting investors buy on any dip.

 

Apple is the second-largest component of the S&P 500, representing 3.2% of its value. It also represents about 12% of the value of the Nasdaq-100, which tracks the largest Nasdaq stocks.

The stock's decline may be temporary.


Article continues below video.

Jobs wants to continue as a director and chairman of the company's board. If his health permits, he will continue to exert enormous influence on the company and its formidable array of products.

Its iPhone 5 phone is due in October. Sprint Nextel (S) will finally have an Apple phone to sell against AT&T (T) and Verizon Wireless, majority-owned byVerizon Communications (VZ).

An iPad 3 is expected next year, along with new Macintosh computers.

Tim Cook, who is replacing Jobs, has been acting CEO since January and has been acting CEO twice before when Jobs' cancer problems forced him to take extended leaves of absence.

Cook, who is 50 and joined Apple in 1998, is a known quantity as a public face of Apple. He is known as a manufacturing genius, but his greatest innovation has been to outsource the manufacturing of virtually everything that carries the Apple label. Apple isn't a manufacturer any longer, hasn't been for years. But it is a master of meticulous design and merchandising.


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Behind Cook is a deep, experienced bench of product designers and managers who have learned from their mistakes. Apple has not always hit on each product. Its Lisa computer, introduced in 1984, was a notable bust. So was Apple TV in 2007.

Still, moving from a visionary leader like Steve Jobs creates uncertainty. "Great companies rarely go from strength to strength," Charles O'Reilly, a management expert at Stanford University's Graduate School of Business, told The Wall Street Journal today.

So the question is about to be joined. Can Apple continue its intensely driven success of the last 13 years? Some will say it can because of the talent in the company. But Apple's history shows it struggled and nearly failed after he left in the 1980s.

Apple was started by Jobs and his friend Steve Wozniak in the late 1970s as a computer maker. But after Jobs returned to the company in 1997 after several years of exile, it began to see itself as more than just a computer maker.

You saw the change when the iPod music player hit the market. That led to the iTunes online store that let users download the music they wanted -- from entire albums to single songs.

The iPod led to the iPhone and then to the iPad, which have changed mobile communications and computing entirely. The iPad generates more revenue for Apple than laptop and notebook computers do for rivals Hewlett-Packard (HPQ) and Dell (DELL). The iPhone brought the smartphone out from the corporate world that had been dominated by Research In Motion (RIMM) -- threatening RIM's viability in the process.

Its Apple stores are wildly popular, so popular that entrepreneurs in China have opened exact replicas -- down to the T-shirts that employees wear.

Jobs submitted his resignation on Wednesday. He had been on medical leave since January and had pledged to resign if the day came that he couldn't continue in his job. "Unfortunately, that day has come," he wrote in a letter to Apple's board of directors.

Cook was promptly named CEO.

"Steve’s extraordinary vision and leadership saved Apple and guided it to its position as the world’s most innovative and valuable technology company," said Art Levinson, chairman of Genentech, on behalf of Apple's board.

The announcement wasn't a huge surprise, given Jobs' health problems, which were evident in his recent appearances.

Jobs left the company in 1984 after a struggle with his board and founded NeXT, a computer platform development company specializing in the higher-education and business markets.

His second tenure, which began in 1997 with the company seemingly on the ropes, has been a staggering success.  Apple

The company evolved from a maker of cool personal computers into a colossus.


The company grossed $65 billion in fiscal 2010 and looked headed toward revenue of at least $120 billion in fiscal 2011. In the process, the shares have soared in value -- more than 5,300% since bottoming in the spring of 2003 -- and now sports a market capitalization of $349 billion, second only to Exxon Mobil's XOM) $358 billion.

Jobs also bought the animation business of George Lucas' Lucasfilm, renamed it Pixar, which made the wildly popular animated films such as "Toy Story," "Cars," "Finding Nemo" and "Up." The company was sold to Walt Disney (DIS) for $7.4 billion. Jobs became Disney's largest shareholder.

Jobs has been struggling with health issues for most of the past 10 years. He underwent cancer surgery in 2004 and a liver transplant in 2009. The current medical leave is his third.

51Comments
Aug 25, 2011 10:17AM
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Mr. Tim Cook, how about bringing good high paying jobs back to the USA? Stop making your products in China. How about making your next IPHONE in this country and proudly putting the USA label on it?  If the richest American company did this, maybe others will follow and get this economy moving again. 
Aug 25, 2011 8:56AM
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i wish you good health Steve.  I'm sure the people under you have watched & learned & although you have huge shoes to fill at Apple hopefully the transition will be smooth.
Aug 25, 2011 8:54AM
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Steve, God bless you.  You've left a great company, in the hands of elegantly qualified folks, who will continue your legacy.  Be well, my friend.
Aug 24, 2011 8:38PM
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What an unselfish action. Just bought one of the Apple products and it operates flawlessly. My hope is he gets well and enjoys life to it's fullest. He certainly deserves it.
Aug 25, 2011 10:17AM
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Jobs may have been a tech guru and the face of Apple and that's great but people fail to mention that he was a dead beat dad to his oldest daughter Lisa Brennan-Jobs who was raised on WELFARE BY HER MOM WHEN JOBS DENIED PATERNITY ! He also pulled the switch on Apple's philanthropic associations !

America and Americans need to stop putting people on pedestals until we know the truth about a person ! Just because someone is a great athlete, actor, entertainer or tech person doesn't mean they aren't lousy people in general !
Aug 25, 2011 9:33AM
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WOW!  CEOs like Jobs are hard to come by.  A person with not only a true entrepreneurial mind, but a Leader among Leaders.  You hear about CEOs taking home millions of dollars in bonuses while their company's stock values plummet, but this isn't the case with Mr. Jobs.  He worked hard to bring Apple back to life and make it one of the most successful companies out there!  And he did it while being on the front line.  He lead his troops into battle with him at the head of the charge.  You know who else did this (in the true sense of the statement)?  George Washington!  He LED his troops into battle.  If more CEOs were truly involved as Mr. Jobs is/was, then the economy would improve.  I really hope Mr. Jobs' health gets better and he is able to enjoy life like he enjoyed his work.  My hat is off to you Mr. Jobs! 
Aug 25, 2011 9:52AM
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This article is crap; saying Steve Jobs' greatest innovation is outsourcing the manufacturing of all Apple products.  That is not an "innovation" just another nail in America's financial/economical coffin sending our potentially high-paying manufacturing jobs overseas to Asia.  He is just as bad as everybody else just more profitable which makes him worse in fact because he could be employing all the more people right here on American soil and contributing to our economy.
Aug 25, 2011 9:17AM
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God bless you Steve and take care of yourself.  Enjoy the small things in life, you will be surprised!!

Aug 25, 2011 8:45AM
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Too bad.  Further proof that money and genius can't assure good health.  Hope he will be okay. I think the company will be fine.  They have a lot of talent working for the company.  Steve Jobs wasn't the whole company and he surrounded himself with good people.
Aug 25, 2011 10:14AM
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Let's continue to praise companies that oursource jobs and overcharge for their products.
Aug 25, 2011 6:37AM
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Apple outsources all their manufacturing thus creating jobs for China etc.  I'd have more respect for this company if these jobs were here in USA instead of taking advantage of cheap foreign labor..

Aug 25, 2011 10:16AM
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Im not fan of Apple or their products but you have to give credit where credit is due. Steve Jobs is an innovator and a visionary, its too bad his health has gone downhill.
Aug 25, 2011 7:02AM
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The company will go on, as it should.  There are various individuals in every company that help to make things happen and all too often they go unnoticed.  We should pray for all who suffer.

Aug 24, 2011 11:49PM
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How can you argue with a company that grossed 65B in fiscal 2010 and a personal net worth of 8B? Steve has made our world a better place with his ability to see what others can not. I am saddened to see him leave but Apple will survive. 
Aug 25, 2011 8:40AM
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Tim will do fine. Steve's legacy goes on.

 

The worst mistake for the board would be to change the CEO for an outsider. Apple management is unique and needs to be preserved.

 

If Apple board of directors wants to commit suicide they can always hire Leo Apotheker as CEO he will be available soon.

Aug 25, 2011 10:19AM
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You need to read better, Someone- it says COOK did the outsourcing, not Jobs! Either way, Apple's best gift to Americans is sending work overseas, again.
Aug 25, 2011 9:49AM
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Steve Jobs and Apple are two separate entities the problem here is the stock for Apple is too high base on the fact that Steve Jobs is not perpetual, but Apple is.  The question now is how far will the stock fall.  Wall St. should know better than to value stock on a human being.
Aug 25, 2011 9:22AM
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Jobs is no fool.  Apples gene pool is deep,but now that emotion trumps logic, who the hell knows whats in store for them.

 

Our country has demonized logic, and canonized emotion, allowing utter nonsense to rule the day.

 

Still believe Apple will do just fine, unless the government should feel the need to intervene in their afairs, at that point they are finished as an tech innovator.

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