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08/26/2011
Changing of the Guard at Apple
If ever there was a businessman in the current era that was deemed irreplaceable, it was Apple’s Steve Jobs. On Wednesday he issued this letter:
To the Apple Board of Directors and the Apple Community:
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.
1976…21-year-old Jobs co-founds Apple with friends Steve Wozniak and Ron Wayne
1980…Apple’s stock market flotation is biggest since Ford in 1956
1985…Leaves Apple to concentrate on new ventures, including Pixar and NeXT
1997…Returns to Apple promising to revitalize the flagging company
August 2004…announces he has been diagnosed with pancreatic cancer and has undergone surgery to remove tumor
June 2009…Returns to work six months after taking time off for liver transplant as part of cancer treatment
17 January 2011…Announces he is taking a break from day-to-day operations to concentrate on his health
“Mr. Jobs could hardly leave a company in better condition. In the first nine months of the fiscal year Apple’s operating profit margin was 31 percent (close to Microsoft’s 39 percent) and its revenues were 78 percent higher than in the previous year (Microsoft managed a 12 percent increase)….
“Steve Jobs is not the whole company. But it was his personal attributes that defined Apple – making bold decisions which are mostly correct, inspiring both loyalty and brilliance from subordinates, and a mind that is able to articulate and anticipate the desires of the masses. Consider not only the Macintosh computer, the iPhone and iPad, but also that Mr. Jobs was a founder of Pixar, the phenomenally successful animated film producer.
“The product cycle in telephones and computers is long enough that the Jobs magic will linger for a year or two, and Tim Cook is a well regarded successor. But even if he proves to be great or near-great, Apple may be close to reaching something like corporate maturity. Even the most inspirational leaders cannot eliminate competition (the open Android system has advantages over the closed iPhone) and Apple margins are terribly vulnerable to a dimming of its mystique. Investors, who gave Apple only a market-average multiple on this year’s earnings before Mr. Jobs resigned, are right to be cautious.”
This last bit is a little more of an editorial point than I initially intended, but it’s true. The past year Apple shareholders, for the first time, seemingly, have not been rewarded for the company’s spectacular success.
The issue the next year or so is, assuming Jobs’ health allows him to be chairman of the board, whether he will still be the de facto leader behind the scene.