Apple CEO Steve Jobs’ announcement that he is to take a medical leave of absence has rocked investor confidence, causing Apple’s shares to fall 8pc overnight in Europe. However, investors’ fears about the impact on product launches may prove premature.
Firstly Apple, which last quarter brought in revenues of US$20bn and may even surpass this in its Q1 results later today, is a vast and successful machine. The launch of products like the iPad 2, the iPhone 5 and OS X Lion, not to mention future Mac products, have long been set in motion.
Yet since announcing his leave of absence, investors in Frankfurt, Germany, where Apple has a secondary listing, got the jitters and Apple’s stock fell 8pc. US investors showed they are made of sterner stuff, with Apple stock only down marginally by 0.02pc in after-hours trading. Overall, Apple shares are up 62pc on last year on NASDAQ.
Apple co-founder Jobs, who returned to the company in the late 1990s, reinvented computing by killing beige and devising the iMac as well as spotting the perfect points of opportunity for devices like the iPod, the iPhone and the iPad. Jobs is dealing with health issues but in many ways he has contributed to the ‘cult of personality’ that drives iconic businesses.
I remember Apple before his return. It floundered and had begun to take on a blue-chip Silicon Valley corporate culture that it wore like an over-sized suit. Since Jobs’ return, however, the company retrieved its strategic focus and in many ways found its beat in wowing the market with technologically innovative and effortlessly elegant products.
How long will Steve Jobs be gone on medical leave?
The nature of his message yesterday was calculated firstly to inspire confidence in employees and shareholders. “At my request, the board of directors has granted me a medical leave of absence so I can focus on my health. I will continue as CEO and be involved in major strategic decisions for the company.
“I have asked Tim Cook to be responsible for all of Apple’s day-to-day operations. I have great confidence that Tim and the rest of the executive management team will do a terrific job executing the exciting plans we have in place for 2011.”
But perhaps it was the deeply personal tone of the last paragraph that had investors querying just how long Jobs will be gone. “I love Apple so much and hope to be back as soon as I can. In the meantime, my family and I would deeply appreciate respect for our privacy.”
This is the second leave of absence Jobs has taken since been struck with pancreatic cancer and indeed at one stage a newswire accidentally published his obituary, fuelling rumours of his demise, which he later paraphrased Mark Twain as ‘greatly exaggerated.’
There is no timetable. He needs to do what has to be done. His last leave of absence didn’t harm Apple at all, in fact the company continued with important product releases, like the iPhone 3GS.
My assessment is Jobs is taking his medical leave at just the right time to actually assuage investors’ concerns. He is taking leave just as Apple is about to announce revenues following a buoyant Christmas sales season where devices like the iPad and iPhone 4 were in hot demand.
He is taking medical leave just ahead of the launch of products like the iPhone 5 and iPad 2 which will no doubt keep Apple on its current trajectory.
The cult of personality however, is a culprit here. Steve Jobs is synonymous with Apple. He should be able to bow out at any time and enjoy his fortune and the same acclaim as fellow founder Steve Wozniak. He just loves what he does so much. So do Apple fans and investors. At this point, Jobs leaving Apple would be like Michael O’Leary leaving Ryanair. Chalk and cheese, I know, but can you imagine either company without either figure head?
Nonetheless, both businesses would trundle on because they have left a mark in the public’s psyche of what to expect. Jobs is a product packaging king, who has a battlefield general’s sense of timing.
MP3 players weren’t new when he picked the right moment to launch the iPod. He did so at the perfect nexus point between the arrival of broadband and the public’s willingness to pay for music. He picked the right moment to launch he iPhone, when smartphones weren’t new but needed to be overhauled in terms of usability and functionality. Tablet computers had been around eight years when he decided public appetite was ready for a device that made it easier to consume media. And apps are tipped to overtake music on iTunes. He pretty much invented the apps market.
Being such a figure head can’t be easy. When Roman generals and emperors were carried on a triumph through Rome, a soldier would whisper in their ears, reminding them they are only human. And Jobs himself knows only too well, he’s only human.