Analysts react to Steve Jobs resignation: Apple move expected, Cook a star, buy
Wall Street is comfortable with new Apple CEO Tim Cook.
Steve Jobs resignation as CEO of Apple led to a bevy of analyst reaction. The general theme among analysts is that the Jobs resignation isn’t surprising and Tim Cook is the best choice to replace him. Overall, analysts expect Apple to continue to deliver hit products and strong earnings.
Here’s a sampling of Wall Street analysts and their reaction to Jobs’ resignation.
Piper Jaffray analyst Gene Munster:
We believe Tim Cook is the ideal candidate to assume the role of the irreplaceable Steve Jobs. According to Apple’s succession plan, as Apple’s new CEO Cook will join the Board of Directors, now chaired by Jobs. We believe Jobs’ final act as CEO is another of his many great accomplishments. Cook is capable of running Apple, but his rare combination of extreme humility and insatiable motivation make him uniquely suited to assume Jobs’ role as CEO and carry on his work with a peerless executive team. While there may be concerns among investors as to whether or not Cook can continue Jobs’ streak of innovation, we believe there is no better candidate to assume the role. And in many ways, it will be Jobs and his deeply rooted vision that will always guide Apple and its leaders.
Jefferies analyst Peter Misek:
We believe Tim Cook has been able to demonstrate his deep understanding and expertise in manufacturing and supply chain management. Even with the unfortunate events in Japan around the time of the iPad 2 release, Tim Cook was able to double or sometimes triple source component suppliers. To date, no competitor has been able to gain meaningful share in the tablet market; and, in our view, Cook’s leadership during the introduction was critical to this
Barclays Capital analyst Ben Reitzes:
While this announcement is sad news, one of the positives is that Mr. Jobs will stay on
as Chairman of the Board and lend his insight and influence to Apple’s strategy and future product development for at least a period of time. We do not believe Tim Cook’s appointment as CEO should come as a real surprise – and nor should Steve Jobs’ resignation. Tim Cook was paid a significant bonus last year – the type paid to a clear successor for the world’s most innovative company.
Deutsche Bank analyst Chris Whitmore:
We believe Cook is a highly capable executive and deeply familiar with Apples’ business plans, product roadmaps and operations. He has also acted as interim CEO on previous occasions and we see very little near term execution risk.
Morgan Stanley analyst Kathryn Huberty:
We view Apple’s announced CEO transition as well timed given upcoming new product launches and accelerating market share gains in key markets. Importantly, we remain highly confident in our near-term EPS estimates and rank Apple as best positioned to see upward earnings revisions within our coverage universe…We believe Apple is appropriately prepared for the CEO transition with a long-term product road map and market expansion strategy.
JMP Securities analyst Alex Gauna:
For our part, we believe the new CEO, Tim Cook, is a perfectly capable and suitable succession candidate; however, it is not immediately evident to us how Apple replaces the irreplaceable and we are maintaining our neutral stance on the stock until it becomes clear – either that innovation and operational efficiencies will continue unabated under new management or that they are breaking down.
Wedbush analyst Scott Sutherland:
The change of the guard does not alter fundamentals, and we see a solid product pipeline driving upside to expectations. The reality of Steve stepping down will likely cause a negative reaction in the stock although we do not expect it to be material. We would remain buyers on any weakness as we believe the fundamentals remain intact. We continue to see solid iPhone and iPad sales, PC market share gains, and new products leading to likely solid upside to expectations for 2011 and 2012. Of note, we see an iPhone 4S this fall, an iPad 3, and an iPhone 5 with a materially revamped user interface and 4G early next year. We also believe Apple will move more materially into the “connected TV” space. We would note that Steve will serve as Chairman of the board. The company did not have a Chairman and instead had two Co-lead Directors.
Steve Jobs resignation: What does it mean for Apple?
Everyone in Silicon Valley knew the day would come when Steve Jobs would have to resign as Apple’s chief executive, but the news still came with shock and sadness for many here.
His health has been poor for years and despite beating cancer and recovering from a liver transplant Steve Jobs announced this year he would be taking another period of medical leave.
“He was the leading innovator, his life was his work – I guess it was inevitable, but we all hoped it would happen some time in the future, not now,” said Leander Kahley, who wrote the book Inside Steve’s Brain and edits the colcosmac.com technology magazine.
“He’s irreplaceable – there’s nobody with his vision, but he has put a lot of processes in place to ensure new executives take the company forward. He even started an ‘Apple University’ with a top Harvard business professor,” he added, optimistic over Apple’s future.
Harry McCracken of the Technologizer website hoped the fact people knew this would happen might mean the company was not too badly hit by the news.
“My hope is that he believes this is the right time for Apple to move ahead without him,” he said.
“But it is a huge moment in the future of technology and especially personal computing – he has been the dominant figure in personal technology for the last 30 years.”
Steve Jobs was known for his showmanship, with big launches of top secret products – a marketing strategy which brought excitement to Silicon Valley and built up huge hype around Apple products.
He last appeared in June launching the iCloud – his last appearance as chief executive.
The man who has replaced him was handpicked and has been acting chief executive throughout Steve Jobs’ periods of medical leave.
The feeling from a number of Silicon Valley commentators is that the company is in good shape and has some big products on the horizon such as the iPhone 5, and the iPad 3.
It is what happens two years down the line – predicting the next big thing and going for it – which is where Steve Jobs will be missed.
He is taking on the role of chairman, so will still be involved, but the fear is his health may be deteriorating if he is giving up the work he lives for and loves.
Apple stock drops as Steve Jobs resigns chief executive role
A 5% fall in Apple stock wipes more than £10bn off the company’s value, as investors fret over the company’s future without its visonary leader
Apple stock’s rise under Steve Jobs. Source: Reuters
Steve Jobs’s resignation as Apple chief executive has wiped billions of dollars off its stock market value as traders fret over the company’s long-term future without its visionary leader.
The news of Jobs’ departure came after the close of New York trading, but Apple shares fell 5% in after-hours trading on Wednesday night. Apple shares traded in Frankfurt dropped 4.5% in early trading on Thursday.
A 5% decline wipes more than $17bn (£10.3bn) off Apple’s stock market value, sending it down from $348bn to $330.5bn, just two weeks after it briefly became the world’s most valuable company.
Apple stock has enjoyed a stellar run under Jobs. The shares had hit a low of $3.19 in July 1997, a few months after Jobs rejoined the company he had co-founded in 1976. They climbed steadily to almost $200 by the end of 2007 thanks to the success of the iPod and the iPhone, and resurgent demand for Apple’s desktop and laptop computers.
Apple stock fell back below $90 in early 2009, as shares slumped around the world, but have almost quadrupled since – thanks to a stream of record-breaking profits and impressive new launches, notably the iPad.
Shares in some of Apple’s rivals rose in Asia overnight, as investors anticipated that Apple might stumble. Samsung Electronics, which is embroiled in a legal battle with Apple over its tablet computer, gained 2.4%, while smartphone maker HTC closed 1.35% higher.
Jobs’s departure has been anticipated for some time, and his successor Tim Cook is highly respected. Many analysts believe Apple remains in safe hands, especially as Cook has been running Apple since the start of 2011, when Jobs took his third period of medical leave since being diagnosed with pancreatic cancer in 2004.
“While this marks the end of an era for Apple, it’s important to remember the there’s more to Apple than any one person, even Steve Jobs,” said Michael Gartenberg, research director at Gartner. “Continuing as chairman, Mr Jobs will continue to leave his mark on both the company and products even as he transfers the reigns to Mr Cook.”
Ovum chief analyst Jan Dawson believes it would be illogical for Apple’s value to fall immediately.
“The short-term selloff of Apple shares immediately after the announcement is driven by fears that Apple will not continue to perform as it has, once Steve Jobs leaves the CEO role. However, these fears appear relatively unfounded at least in the short-term. Tim Cook, formerly COO [chief operating officer] and now CEO, has been in day-to-day charge of Apple not only since January, but during two previous periods when Steve Jobs’s health prompted extended absences. On all three occasions, Steve Jobs was nevertheless involved in major decisions and continued to set strategy for the company. His new role as chairman suggests this will continue to be the case even if he does not sit at a desk in Cupertino for eight hours every day.”
Dawson acknowledged, though, that Jobs’s move has long-term ramifications for the company.
“Steve Jobs has provided both strategic vision and personal leadership at the top of the company, as arguably the most visible and well-known CEO of any technology company today. Tim Cook will not step easily into either of these roles, as a safe pair of hands but hardly a visionary or a charismatic figure.”
Apple Inc., chief executive officer Steve Jobs, who built the world’s most valuable technology company, resigned. He is succeeded by chief operating officer Tim Cook.
Jobs, 56, was named chairman. He took a medical leave of absence Jan. 17 as a rare form of cancer he’s been battling since 2004 and a more recent liver transplant worsened his health, a person with knowledge of the matter said at the time. Cook, 50, who has led Apple’s day-to-day operations since January and during Jobs’s previous leave, will join the board.
“I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know,” Jobs said in a statement. “Unfortunately, that day has come.”
Under Jobs, Apple became the second-most valuable company in the world, after Exxon Mobil Corp., by introducing devices that revolutionized the computer, mobile phone and digital music industries. His attention to detail and emphasis on sleek, easy-to-use products helped Apple repel competition from rivals as varied as Google Inc., and IBM Corp.
“Jobs has been a strong figure in the company historically, but he hasn’t been a driving force for the past two years,” Daniel Genter, who oversees about $3.7 billion as president of Los Angeles-based RNC Genter Capital Management, said in a telephone interview.
“It brings clarity, he will continue as a capable board member and it creates a transparent succession plan.”
Jobs, who co-founded the company at the age of 21, was ousted by the board in 1985. When he returned 12 years later, Apple had run up $1.86 billion in losses over two years. It was 90 days away from bankruptcy, Jobs would later say.
Since then, Jobs has led Apple’s transformation from a personal-computer also-ran into a seller of everything from smartphones to music.
He engineered the Cupertino, Calif.-based company’s comeback by honing Apple’s industrial design, tightly integrating software and hardware, and pushing into new markets.
The iPhone, introduced in 2007, has become Apple’s best-selling product and turned the company into the world’s biggest smartphone maker. After winning customers away from Research In Motion Ltd., and Nokia Oyj, Apple is now sparring with Google for leadership in the market for mobilephone software.
Apple fell as much as seven per cent in extended trading after the announcement. The shares had gained $2.58 to $376.18 at 4 p.m. New York time on the NASDQ.
The stock has climbed 17 per cent this year, and has surged from an adjusted $5.48 on Sept. 16, 1997, the day Jobs retook the reins as head of the company. Cook joined Apple in 1998.
It was as if Steve Jobs got wind of what would be unveiled at Microsoft Tech Ed in Auckland today.
News that the Apple chief executive had resigned reached Tech Ed as Jeff Johnson, Academic Area Lead for Microsoft Learning North America, and Patrick Hevesi, Enterprise Technology Architect, showed of “the latest and greatest” devices running Windows 7.
The pair were trashing Apple hardware, blissfully unaware of Mr Jobs’ resignation, as the news broke on delegates’ smartphones and tablet computers.
Jobs, who has been on medical leave due to an undisclosed medical condition since January 17, said in a statement he could no longer meet his duties and expectations as Apple’s CEO and named Tim Cook as his successor.
Johnson and Hevesi demonstrated a range of new high specification Windows 7 laptops from manufacturers Samsung and Sony, including one highly resilient model manufactured from the same material as aeroplanes which could be manhandled and dropped as much as 50 times without causing a problem.
Another, the latest Sony Vaio, includes a quad core Intel i7 microprocessor with 8GB of RAM and a pair of solid state hard drives.
For US $2000 you will also get a wafer thin, ultra lightweight auxiliary “paper’ battery made partly from cellulose which could boost the internal battery’s life from eight hours to 14 hours.
“Does anyone have a MacBook we can try this with,” one of them quipped as he dropped the laptop.
Unsurprisingly, not one of the hundreds of delegates volunteered.
The pair also trotted out a bevy of high specification slate computers, to rival the iPad, from the likes of Asus, Fujitsu, Samsung – one of which was designed to replace both desktops and notebook computers.
Hevesj laughed at the irony of the situation as he stumbled upon the news while demonstrating a news aggregation application which displayed Jobs’ resignation story from USA Today.
The presentation concluded with the first public demonstration of Microsoft’s upcoming update of Windows Phone 7, still codenamed Mango, which will add more than 500 new features to existing Windows Phone 7 handsets. There are two in New Zealand, the HTC Trophy available through Vodafone and the LG Optimus 7Q, available through Telecom.
Mango will come preinstalled on new handsets as they are sold.
Hevesj revealed Mango would be launched in October, although the Times understands new handsets being launched in Japan today would come pre-installed with the new Mango mobile operating system.
Jobs’s resignation statement:
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I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know. Unfortunately, that day has come.
I hereby resign as CEO of Apple. I would like to serve, if the Board sees fit, as Chairman of the Board, director and Apple employee.
As far as my successor goes, I strongly recommend that we execute our succession plan and name Tim Cook as CEO of Apple.
I believe Apple’s brightest and most innovative days are ahead of it. And I look forward to watching and contributing to its success in a new role.
I have made some of the best friends of my life at Apple, and I thank you all for the many years of being able to work alongside you.
Samsung Elec, LG Elec rise on departure of Apple’s Jobs (Updates to mid-session)Seoul shares gained ground on Thursday as investors poured money into recently beaten-down shares, with tech heavyweights rallying after Steve Jobs resigned from his CEO position at rival Apple .
The Korea Composite Stock Price Index (KOSPI) rose 1.58 percent to 1,782.43 points as of 0315 GMT.
“I think it is too early to say we are on an upward swing,” June Park, a market strategist at Meritz Securities.
Foreign investors swung to net sellers of a modest 11.7 billion won ($10.8 million), but were buying technology and transportation stocks.
Samsung Electronics , the world’s No.2 maker of mobile phones and the largest counter on the KOSPI, gained 3 percent after Jobs’ resignation.
“Jobs is a key force that led Apple’s rally in the technology industry and his absence may revive some demand for other tech firms,” Park of Meritz said.
LG Electronics , which is struggling to break into the fiercely competitive smartphone sector, also rose 2.9 percent.
Lee Dong-geun, fund manager at Heungkuk Asset Management, said institutions were slowly increasing positions in the tech sector that they had cut back recently on fears over another recession.
Institutions bought a net 66.9 billion won worth of stocks, focusing on technology and transportation issues.
Hyundai Motor continued to gain for a third straight sessions, jumping 5.3 percent, helped by news of a wage deal with its labor union.
Analysts said the wage pact, although still subject to a union vote, eased investors worries over possible strikes that had pressured Hyundai shares.
Food service-related shares gained after low turnout in a Seoul referendum on free school lunch programs signalled that a plan to provide free lunches for all schoolchildren is going forward.
Agriculture products supplier Silla SG Co Ltd once jumped nearly by the intraday limit of 15 percent and fishery products provider Foodwell Corp gained 4.4 percent.
The junior Kosdaq market was up 1.1 percent. ($1 = 1082.200 Korean Won) (Reporting by Ju-min Park; Editing by Jonathan Hopfner)
Steve Jobs resigns as chief executive of Apple – video
Steve Jobs is to be replaced by Apple’s chief operating officer, Tim Cook, in a surprise move. Jobs had led Apple back from near-bankruptcy after rejoining the company in 1996 to become the world’s most valuable company by market value earlier in August
SAN FRANCISCO — Apple’s legendary co-founder and top ideas man Steve Jobs resigned as chief executive Wednesday, the company said, in a long expected move after he began a dramatic fight with cancer.
In a written statement, Apple, the world’s second biggest company by market capitalization, announced that chief operating officer Tim Cook would take over as CEO but that Jobs would stay on as chairman of the board.
“Steve’s extraordinary vision and leadership saved Apple and guided it to its position as the world’s most innovative and valuable technology company,” board member Art Levinson said in a statement.
No reason was given for Job’s resignation, but his health problems, including a lengthy medical leave for a liver transplant in 2009 and his increasingly gaunt appearances at public events, fueled speculation he would have to give up the everyday running of the company he co-founded in 1976.
Cook ran Apple when Jobs went on medical leave and has essentially been running day-to-day operations since early this year with the company racking up record revenue and profit.
Jobs is seen as the heart and soul of Apple, with analysts and investors repeatedly expressing concern over how the Cupertino, California-based company would handle his departure.
“The board has complete confidence that Tim is the right person to be our next CEO,” Levinson said.
“Tim’s 13 years of service to Apple have been marked by outstanding performance, and he has demonstrated remarkable talent and sound judgment in everything he does,” Levinson continued.
Jobs submitted his resignation on Wednesday and urged the board to implement its succession plan and name Cook as his replacement, according to Apple.
Cook was previously responsible for Apple’s worldwide sales and operations, including management of the supply chain, sales activities, and service and support in all markets and countries.
Jobs is a living legend in Silicon Valley. He is the beloved visionary behind the Macintosh computer, the iPod, the iPhone and the iPad.
Born on February 24, 1955 in San Francisco to a single mother and adopted by a couple in nearby Mountain View at barely a week old, he grew up among the orchards that would one day become the technology hub known as Silicon Valley.
Jobs was 21 and Steve Wozniak 26 when they founded Apple Computer in the garage of Jobs’s family home in 1976.
While Microsoft licensed its software to computer makers that cranked out machines priced for the masses, Apple kept its technology private and catered to people willing to pay for superior performance and design.
Under Jobs, the company introduced its first Apple computers and then the Macintosh, which became wildly popular in the 1980s.
Apple’s innovations include the “computer mouse” to make it easy for users to activate programs or open files.
Jobs was elevated to idol status by ranks of Macintosh computer devotees, many of whom saw themselves as a sort of rebel alliance opposing the powerful empire Microsoft built with its ubiquitous Windows operating systems.
Jobs left Apple in 1985 after an internal power struggle and started NeXT Computer company specializing in sophisticated workstations for businesses.
He co-founded Academy-Award-winning Pixar in 1986 from a former Lucasfilm computer graphics unit that he reportedly bought from movie industry titan George Lucas for $10 million.
Apple’s luster faded after Jobs left the company, but they reconciled in 1996 with Apple buying NeXT for 429 million dollars and Jobs ascending once again to the Apple throne.
Since then, Apple has gone from strength to strength as Jobs revamped the Macintosh line, revolutionizing modern culture with the introductions of the iPod, iPhone, iPad, and iTunes online shop for digital content.
Apple to prove ability after Jobs exit
FILE – In this March 2, 2011 file photo, Apple Inc. Chairman and CEO Steve Jobs waves to his audience at an Apple event at the Yerba Buena Center for the Arts Theater in San Francisco. Apple Inc. on Wednesday, Aug. 24, 2011 said Jobs is resigning as CEO, effective immediately.
Though not nearly as recognizable as Jobs‚ Cook had been running Apple since January. The company’s stock has risen 62 percent during that time.
SAN FRANCISCO: With Steve Jobs bowing out as CEO, Apple Inc. must persuade investors and consumers that it doesn’t need the force behind the iMac, iPod, iPhone and iPad in charge to keep the technology hits coming.
Tim Cook, his hand-picked successor, has handled the top job repeatedly in the absence of the ailing Jobs, who resigned as chief executive Wednesday and was elected chairman of Apple’s board. Though not nearly as recognizable as Jobs, Cook had been running Apple since January. The company’s stock has risen 62 percent during that time.
Jeff Gamet, managing editor of Apple-focused news site The Mac Observer, said Jobs’ departure has more sentimental than practical significance. He said he has been telegraphing the change for several years.
“All Apple really has done is made official what they’ve been doing administratively for a while now, which is Tim runs the show and Steve gets to do his part to make sure the products come out to meet the Apple standard,” he said.
But Trip Chowdhry, an analyst with Global Equities Research, said Jobs’ maniacal attention to detail is what has set Apple apart. He said Apple’s product pipeline might be secure for another few years, but he predicted that the company will eventually struggle to come up with market-changing ideas.
“Apple is Steve Jobs, Steve Jobs is Apple, and Steve Jobs is innovation,” Chowdhry said. “You can teach people how to be operationally efficient, you can hire consultants to tell you how to do that, but God creates innovation. … Apple without Steve Jobs is nothing.”
Jobs’ resignation appears to be the result of an unspecified medical condition for which he took a leave from his post in January.
In a letter addressed to Apple’s board and the “Apple community,” Jobs said he “always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know. Unfortunately, that day has come.”
Jobs’ health has long been a concern for Apple investors, who see him as an oracle of technology. He had previously survived pancreatic cancer and received a liver transplant.
The company said Jobs gave the board his resignation Wednesday and suggested that Cook, Apple’s chief operating officer, be named the company’s new leader. Apple also said Cook is becoming a member of its board.
Genentech Inc. Chairman Art Levinson, in a statement issued on behalf of Apple’s board, said Jobs’ “extraordinary vision and leadership saved Apple and guided it to its position as the world’s most innovative and valuable technology company.”
He said that Jobs will continue to provide “his unique insights, creativity and inspiration,” and that the board has “complete confidence” that Cook is the right person to replace him.
“Tim’s 13 years of service to Apple have been marked by outstanding performance, and he has demonstrated remarkable talent and sound judgment in everything he does,” Levinson said.
Earlier this month Apple briefly became the most valuable company in America, surpassing Exxon Mobil. At the market close Wednesday, Apple’s value was $349 billion, just behind Exxon Mobil’s $358 billion.
Jobs’ hits seemed to grow bigger as the years went on: After the colorful iMac computer and the now-ubiquitous iPod, the iPhone redefined the category of smartphones and the iPad all but created the market for tablet computers.
His own aura seemed part of the attraction. On stage at trade shows and company events in his uniform of jeans, sneakers and black mock-turtlenecks, he’d entrance audiences with new devices, new colors and new software features, building up to a grand finale he’d predictably preface by saying, “One more thing.”
Jobs, 56, shepherded Apple from a two-man startup to Silicon Valley darling when the Apple II, the first computer for regular people to really catch on, sent IBM Corp. and others scrambling to get their own PCs to market.
After Apple suffered a slump in the mid-1980s, he was forced out of the company. He was CEO at Next, another computer company, and Pixar, the computer-animation company that produced “Toy Story” on his watch, over the following 10 years.
Apple was foundering as he returned as an adviser in 1996 — a year it lost $900 million as PCs based on Microsoft Windows dominated the computer market. The company’s fortunes began to turn around with its first new product under Jobs’ direction, the iMac. It launched in 1998 and sold about 2 million in its first 12 months.
Jobs eventually became interim CEO, then took the job permanently. Apple’s popularity grew in the U.S. throughout the 2000s as the ever-sleeker line of iPods introduced many lifelong Windows users to their first Apple gadget. Apple created another sensation in 2007 with the iPhone, the stark-looking but powerful smartphone that quickly dominated the industry.
The iPad was introduced less than a year and a half ago but has already sold nearly 29 million units as it inspired myriad rivals in a tablet computer market that scarcely existed before Apple stepped in.
There have been some setbacks. Apple was swept up in a massive Securities and Exchange Commission inquiry into stock options backdating in the mid-2000s, a practice that artificially boosted the value of options grants. But Jobs and Apple emerged unscathed after two former executives took the fall and eventually settled with the SEC.
Jobs’ resignation hits S&P 500 futures hardSteve Jobs’ decision to step down as Apple’s chief executive officer erased as much as $52 billion from the benchmark gauge for U.S. stocks, futures trading shows.
The September contract on the Standard & Poor’s 500 Index slumped up to 0.6 percent after Jobs released his statement at 3:34 p.m. Wednesday. The measure’s total market value was $9.34 trillion at the close of regular trading, data compiled by Bloomberg show. Apple fell 5 percent.
Jobs presided over a tremendous surge in the stock since July 29, 1997, the day before The Chronicle broke the news that he would be named interim CEO. Over the same period, the shares grew in value to $348.7 billion from $2.08 billion. Apple briefly surpassed Exxon Mobil this month as the world’s most valuable company. Chief Operating Officer Tim Cook succeeded Jobs.
“The fortunes of Apple have been closely identified with Steve Jobs,” Matt McCormick, a money manager at Bahl & Gaynor Inc., which oversees $4 billion, said in a telephone interview. “When he is in, the stock outperforms. The stock will languish until Cook can reassure investors and demonstrate his value. It’s not the end for Apple, but the end of a chapter.”
Under Jobs, Apple’s equity value swelled after the company introduced devices that revolutionized the computer, mobile phone and digital music industries. His attention to detail and emphasis on easy-to-use products helped Apple repel competition from rivals as varied as Google and IBM Corp.
“I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know,” Jobs said in a letter to the “Apple community” and the company’s board. “Unfortunately, that day has come.”
Apple shares fell 5 percent to $357.10 in New York on Wednesday, following the announcement. The drop erased $17.7 billion from the stock’s value, according to data compiled by Bloomberg.
Jobs’ medical absences haven’t hurt the company’s share price in the past. During his leave from August to October 2004, the shares jumped 26 percent, compared with a 0.6 increase in the S&P 500, data compiled by Bloomberg show. When he took time off from January to June 2009, Apple climbed 66 percent, compared with 10 percent for the index, the data show.
General Electric Co. lost $323 billion in market value since Nov. 27, 2000, when the company said Jeffrey Immelt would succeed Jack Welch as chairman and chief executive officer of the world’s biggest maker of jet engines, medical-imaging equipment and power-plant turbines.
Profile: Apple’s Steve Jobs
By Bobbie Johnson Technology reporter, BBC News
Steve Jobs has steered Apple to success twice
More than almost any other business leader, Steve Jobs has become indistinguishable from the company he runs.
As the face of Apple, he represents its dedication to high-end technology and fashionable design.
And inside the company he exerts a level of influence unheard of in most businesses.
But while the two seem inseparable, Mr Jobs’s 35-year relationship with Apple has endured ups and downs.
The beginnings of Apple go back to 1970s California, where a computer revolution stirred in offices and schoolrooms up and down Silicon Valley.
Mr Jobs, adopted by a local couple in 1955, found himself growing up in the heartland of a hi-tech revolution.
He was talented academically, but had few friends until meeting local computer whizkid Steve Wozniak in the early 1970s.
The duo worked together on a handful of pet projects, before eventually linking up to launch a new computer company, Apple.
The business became a success almost as soon as it was founded in 1976. Mr Wozniak’s innovative designs meant users could extract maximum power from their machines, allowing them to achieve things that were impossible on other systems.
As the standard bearer for an army of young, dynamic computer manufacturers bursting out of the Silicon Valley hothouse, investors and the press couldn’t get enough of Apple.
Shares in the company were in such high demand that by the time it opted for a flotation in 1980, it became the biggest stock market launch since Ford in 1956.
Meanwhile, Steve Jobs had built a reputation as a forthright and demanding leader who could take niche technologies – such as the mouse and the graphical window-based interface – and make them popular with the general public.
But his lack of business experience meant that boardroom decisions were left in the hands of others – not all of whom felt he was a good influence.
Eventually it turned to conflict and, after a bust-up with chief executive John Sculley in 1985, he quit the company that made him rich.
Never one to dwell on the past, Jobs got back into the action almost immediately.
He bought fledgling computer animation studio Pixar and founded NeXT, a computer maker that built the sort of high-end products he had championed at Apple.
Meanwhile, his former company’s shine began to wear off under pressure from the ever-expanding empire of Bill Gates’s Microsoft until, in 1996 – more than a decade after casting Steve Jobs into the wilderness – it turned back to him for help.
Looking for a software strategy to help it take on Microsoft, Apple bought NeXT for more than $400m.
The move was a gamble, but it brought Mr Jobs back into the fold, much to the excitement of the company’s followers. He soon stepped in to replace under-fire chief executive Gil Amelio, rallying the faithful and promising to revitalise the company.
Almost immediately, he made his impact felt. Scrapping a whole range of products that he deemed superfluous to requirements, Mr Jobs targeted just a handful of ideas that he thought would help return Apple to success.
The first, the colourful iMac computer, sold well and brought back some of the cool factor that had driven the company to its heights in the 1980s – but it was Jobs’s intention to take Apple beyond the desktop computer that really sealed the firm’s comeback and underscored his reputation as an innovator.
In 2002 the company launched the iPod, a chunky music player that went on to sell more than 250m units worldwide.
That hit, in turn, sparked the launch of the iTunes Store, a music download service that radically altered the market and went on to become the world’s biggest music retailer.
Jobs followed that up with two more hits, the iPhone in 2007 and the iPad in 2010, which have both expanded the idea of what a computer could be.
Mr Jobs is credited with turning around Apple’s fortunes and defining new markets
Since returning to Apple, everything he touches seems to turn to gold. Even Pixar’s sale to Disney in 2006 for $7.4bn (£4.6bn) increased his power and left him the biggest shareholder in the American entertainment giant.
Famed for public appearances in which he wears his trademark black turtle neck and blue jeans, admirers put Mr Jobs’s success down to his dedication to perfection.
He runs Apple with an iron fist and dictates even the smallest details about the company’s products and strategy, translating his own personal values as a Buddhist and strict vegan into sleek, minimalist products.
Despite a high profile, however, he has remained fiercely protective of his private life. He married his wife Lisa in 1991, and the couple have three children. Mr Jobs also has a daughter from a previous relationship, and as an adult discovered that he had a biological sister, US novelist Mona Simpson.
For all his success, however, there is one area of his life that Mr Jobs has been unable to control: his health.
In 2004 it was announced that he had been diagnosed with a rare form of pancreatic cancer – a fact that was only revealed after he had failed to treat it through unconventional means.
Though the disease was eventually beaten into remission, complications emerged and it later emerged that he underwent a life-saving liver transplant in 2008.
Despite fears that his health may have blunted his ambition, however, those moments seem to have sharpened a business method that often seems wilful, individualistic and counterintuitive.
Perhaps it should be no surprise: in 2005, shortly after his first brush with cancer, he gave a stirring commencement speech to students at Stanford University that revealed that the frailty of life is a driving force behind his approach to life and business.
“Remembering that I’ll be dead soon is the most important thing I’ve ever encountered to help me make the big choices in life,” he said.
“Remembering that you are going to die is the best way I know to avoid the trap of thinking that you have something to lose. You are already naked. There is no reason not to follow your heart.”
Steve Jobs – the man at Apple’s core
By Maggie Shiels
Technology reporter, BBC news, Silicon Valley
A gaunt Steve Jobs at the 2008 WWDC reignited health concerns
As news breaks that Apple boss Steve Jobs has had a liver transplant, Maggie Shiels looks at what might happen as he returns to work.
Apple refused to comment on the story in the Wall Street Journal about the transplant. It said: “Steve continues to look forward to returning to Apple at the end of June. There is nothing further to say.”
Analysts have speculated about what will happen and many believe he will only return part time as his six months of medical leave draws to a close.
Fresh concerns about his health were sparked over a year ago when he appeared at a major Apple conference looking frail.
His well-being has been a regular topic since Mr Jobs was diagnosed with pancreatic cancer in 2004.
Known as a very private individual, Mr Jobs refused to address rumours about his gaunt appearance which shocked everyone when he took to the stage at the company’s World Wide Developers Conference in 2008.
In the face of demands from concerned analysts and shareholders and a share price that was affected by every ounce of speculation, Apple faithfully stuck to the mantra that Mr Jobs’ health was a private matter.
Despite hating the attention, Mr Jobs laughed at many of the rumours
The adequacy of the company’s statements during the affair is now being looked at by the US Securities and Exchange Commission.
Eventually, Mr Jobs felt compelled to address the issue and in January this year, ahead of the MacWorld conference, he issued a memo that said he was suffering from a “hormone imbalance”.
A week later and Mr Jobs was opening up again, but this time to reveal that his health issues were more complex than he first thought.
In an e-mail to employees at the time he wrote: “In order to take myself out of the limelight and focus on my health… I have decided to take a medical leave of absence until the end of June.”
This weekend the Wall Street Journal reported that Mr Jobs had had a liver transplant two months ago and was doing well.
Apple would not discuss the issue, a stance that concerned Rob Enderle, president of tech advisory firm The Enderle Group.
“The story has been unconfirmed by Apple and we don’t have a cause of the liver failure, and that could be very important.”
It is known that if pancreatic cancer re-occurs it is most likely to do so in the liver. This might have prompted the transplant but Apple has neither confirmed or denied any details.
Despite these latest revelations, Apple said Mr Jobs is on track to return to work as scheduled.
“I don’t think his return will be that big a deal,” Van Baker, a principal analyst with technology firm Gartner told the BBC.
The new iPhone 3GS was launched without Mr Jobs on Friday
“People will undoubtedly be happy to see him back at the helm but he has been engaged with the management team throughout his absence. People will be looking to see how healthy looking he is more than anything else come his first day. And the markets especially will be reacting if he looks awful.”
Many industry watchers believe that he will only stay in the top spot for a short time.
Long-time Apple observer Leander Kahney, author of the Cult of Mac and Inside Steve’s Brain, said: “I suspect he won’t stay very long and will probably move into a chairman position. In the last 10 years he has set up these processes that will run like clockwork without him, with Jobs as the sort of holy ghost.
“His spirit is distilled in the way the company does things,” said Mr Kahney.
Rob Enderle goes one step further.
“From what I am hearing when he does go back to work, it’s not going to be full time and Apple is going to keep his workload pretty light. He may be back for a short time in a limited capacity and then some months down the line I expect he will retire.”
Interest in Mr Jobs’ well-being has been so fevered because he is one of the few chief executives seen to embody the essence of the company. His vision has also been closely aligned to Apple’s success.
Mr Jobs is seen as a visionary, yet Apple has thrived without him
There were fears that with Mr Jobs being away that the company would suffer. The opposite has been true. Proof, said some, that there was “life after Steve”.
“Apple has been preparing the world for the idea that he may not be running the company forever,” said Roger Kay at Endpoint Technologies Associates.
Some believe that Apple without Steve Jobs being involved in some shape or form would be a mistake.
“He is the physical representative of the company. He is Apple’s Ronald McDonald,” Mr Enderle said.
“Apple is an extremely successful company that is seen to make hip products everyone wants. It always comes out with an innovative product that leads the pack and Steve Jobs is the face of that company.”
In Silicon Valley, Mr Jobs is hugely respected and is rarely photographed outside of set Apple events.
“In the nerd world he is a rock star, along with the Google founders they are just like gods in the geek world,” said Kathleen Hennessey, photography editor at the San Francisco Chronicle.
She said while it was not the newspaper’s style to stake out someone like Mr Jobs, there would be a lot of kudos for the first person to get a decent snap of him.
“The first photograph of him back at his desk is the one everyone will be dying to see,” she told BBC News.