Wednesday, August 24, 2011

Bye, Steve

SAN FRANCISCO: Mr Steve Jobs, whose insistent vision that he knew what consumers wanted made Apple one of the world's most valuable and influential companies, is stepping down as chief executive.

'I have always said that 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,' Mr Jobs said in a letter released by the company.

'Unfortunately, that day has come.'


Mr Jobs, 56, has been on medical leave since January, his third such absence. He underwent surgery for pancreatic cancer in 2004 and received a liver transplant in 2009. As recently as a few weeks ago, however, he was negotiating business issues with another Silicon Valley executive.

Mr Jobs will become chairman, a position that did not exist before. Apple named Mr Tim Cook, its chief operating officer, to succeed Mr Jobs as CEO.

Rarely has a major company and industry been so dominated by a single individual, and so successful. His influence went far beyond the iconic personal computers that were Apple's principal product for its first 20 years.

In the past decade, Apple has re-defined the music business through the iPod, the cellphone business through the iPhone, and the entertainment and media world through the iPad.

Again and again, Mr Jobs gambled that he knew what the customer would want, and again and again he was right.

'The big thing about Steve Jobs is not his genius or his charisma but his extra-ordinary risk-taking,' said Mr Alan Deutschman, who wrote a biography of Mr Jobs.

'Apple has been so innovative because Jobs takes major risks, which is rare in corporate America. He doesn't market-test anything. It's all his own judgment and perfectionism and gut.'

Mr Tim Bajarin, president of the technology research firm Creative Strategies, said the news about Mr Jobs was 'a shock because it's abrupt'.

He stressed, however, that 'while there's definitely concern for Steve as a person', he had little concern for the company.

'Steve has built a very deep bench of managers, including the leadership of Tim Cook, who clearly understands Steve's vision, goals and direction,' said Mr Bajarin, who has followed Apple for 30 years.

Others were not so sure.

'You could make the case that Steve has injected so much of his DNA into Apple that Apple will continue,' said Mr Guy Kawasaki, who was an Apple executive in the late 1980s.

'Or you can make the case that without Steve, Apple will flounder. But you cannot make the case that Apple without Steve Jobs will be better. Hard to conceive of that.'

The technology world has never been short of strong-willed leaders (think Mr Bill Gates at Microsoft or Mr Larry Ellison at Oracle). But even in this select group, Mr Jobs was noted for the control he exerted and the loyalty he commanded. Without him, his devoted team might soon fracture.

'I think the key question is whether the Apple team will continue to work as effectively as a collaborative without the single person to rely on for the final decision,' said Mr Charles Golvin, a Forrester Research analyst.

The news of Mr Jobs' resignation came after the market closed on Wednesday. Last night, Apple fell as much as 3 per cent in opening trade on worries Mr Jobs' health had deteriorated further.

The early years of Apple long ago passed into legend: the two young hippie-ish founders, Mr Jobs and Mr Steve Wozniak; the introduction of the first Macintosh computer in 1984, which stretched the boundaries of what these devices could do; Mr Jobs' abrupt exit the next year in a power struggle.

It was his return to Apple as an adviser in 1996, however, that started a winning streak that raised the company from the near-dead to its current unmatched position.

When Mr Jobs returned, Apple had run up US$1.86 billion in losses over two years. It was 90 days away from bankruptcy, Mr Jobs would later say.

Apple stock surged 9,020 per cent since July 29, 1997, the day before the San Francisco Chronicle broke news that Mr Jobs would be interim CEO. Over that period, the market value rose to US$348.7 billion from $2.06 billion.

More than 314 million iPods, 129 million iPhones and 29 million iPads have been sold, according to Bernstein Research analyst A.M. Sacconaghi Jr.

This summer, Apple briefly exceeded Exxon Mobil as the most valuable US company.

Mr Jobs' resignation opens the door for rivals Samsung Electronics and HTC to battle for smartphone supremacy in salesrooms and courtrooms globally.

Taiwanese group HTC, led by another well-known industry figure, Mr Peter Chou, is seen by many as the most direct competitor to Apple. It has seen sales surge in the past few quarters and has a reputation for innovative flair.

Samsung's fortunes are most tied to Apple, both as a competitor and supplier of components. The group also has a scale and an ability to react quickly that is rare in the sector.

'The game is really now Samsung's to lose,' said Mr Mark Newman, a former director of strategy at Samsung, where he worked for six years.