It was one of those moments in life, sorry if I sound over dramatic, but I am a techie and have become a big Apple fan. To see flash across my iPhone the news from the AP that Apple CEO Steve Jobs was resigning, effective immediately – was a shock. It is well documented that the founder of Apple has been ill and battled bouts with cancer. He has taken two leaves for medical reasons, one earlier this year. Clearly his health was in question, and based on his reputation as a driven and hard driving CEO, the day to day grind that comes with the role must not have been a good thing for his well being (rumor is he was not the most pleasant person to present in front of). The fact he has had to made this decision is an indication that his health has reached a point where he needs to allow himself the time and peace to concentrate on his health.
I do think this is not as dramatic as it might have been a few years ago, by no means do I think this will not impact the business and the stock just not the level of impact it might have had. Here’s is why:
- Apple has created a momentum of its own, due in very large part to Jobs, but that momentum has a life of its own. Recently, Apple became the world’s most valuable company when it surpassed Exxon by $4b in market cap during trading, this lead was short lived. Then again when your company was seen as all but dead less than 2 decades ago, having a valuation of north of $300billion is nothing to be ashamed of.
- Apple is generating tremendous amounts of free cash flow, to the point they have more cash on hand that Uncle Sam! I realize companies like Microsoft also have a large sum of cash on hand and that does not guarantee you keep your place at the top of the mountain, but it sure doesn’t hurt to stay close to the top. The cash on hand should afford Apple the opportunity to make mistakes as they find their way through the transition period.
- iPhone, iPad, iPod, Mac, iTunes, App Store, Apple Store….these have all become parts of our daily lives. The fact the family of products has become more present in the corporate meeting rooms speaks to how far Apple has come. Jobs was never known for wanting to cater to the corporate world with his products. Not that I believe Apple should see this as a target, might make them become too Microsoft or SAP like, but maybe a new leadership will be slightly less frigid to the corporation. Heck their devices are already all over the corporate world.
- Apple and Wall Street both knew this day was coming, the signs have been there since he took his first medical leave. While I am sure there will be some share volatility due to the announcement, the market cap and price will bounce back once the new iPhone comes out or a new iPad. Granted this impact will not last indefinitely.
- Steve Jobs himself. The man has made more than a few come backs. He is only 55. He clearly has a super natural drive and ambition. He remains the Chairman at Apple. Do not count him out and we cannot underestimate the potential influence he still has over the direction of Apple.
Apple knew this day was coming and I would trust had and have a plan they will execute. The influence Jobs has had on Apple’s rise cannot be truly quantified. I do believe in the statement that everyone is replaceable; however, I also believe some like Steve Jobs challenge that statement. Apple will continue making wonderful consumer products…at least in the short term. It will be up to the leadership and brain trust, as well as Jobs himself, to ensure that the creative and business magic they have leveraged is transferred and groomed within the next generation of Apple leaders.
God’s speed on your journey to recovery Mr Jobs.
Please bear with me for a moment, this is more of a rant than anything else. I want to relay a story from today which is all about taking inventory management a wee bit too far. The situation is as follows. I had to put my Ez-Pass into my car and I did not have the back velcro strips that would stick to my windshield. For a while I would have to hold up my Ez Pass to go through tolls, not always practical. You might scoff and say “well how difficult is that?” Easier said than done, especially for the EzPass tolls were you do not have an actual toll booth, the ones on the highway that you can just drive 55 mph through. Try holding up the transponder and knowing exactly when to do so and make sure the system picks up your transponder. Trust me a $35 ticket will attest to how difficult that skill is…So my prior job was in New Hampshire (I live in Massachusetts and that is where I got my transponder). My office was close to an EzPass office. I decide to go to said office and get a fresh pair of velcro strips. So far nothing to crazy. So I go there one afternoon after lunch, wait in line, get to the front of the queue, speak to a polite woman who tells me she would be happy to give me replacement strips…so far so good. But then asks me about my transponder, so I begin to explain to her where it is registered to which she says “Oh, I’m sorry, we cannot give away replacement strips unless we have a transponder from this state to match the strips.”
What? Huh????? Is the New Hampshire inventory control of spare EzPass strips that controlled???
Contrast that with my visit, today, to the Massachusetts EzPass office. Walk up to counter, ask for two strips (btw I am all ready to explain that I am a Mass resident with Mass transponder…) to which the kind lady behind the counter pulls out a bucket of strips, takes two out and off I go. Morale of the story the transponder strips inventory management in New Hampshire is so finely tuned, that they have a perfect 1 to 1 replacement inventory level.
Seriously, it got me thinking, what in the world was that all about. How come in Massachusetts I walk in and there is a bucket of these $0.93 pieces of velcro but in New Hampshire I need a letter from the governor to get 2 replacements. Is New Hampshire managing their inventory budget down to the sub-$1 level? Is there really such a high demand for this sticky velcro pieces that they must be protected and signed for like a loaf of bread during the Great Depression?
While the influx of data and technology to measure and monitor inventory, assets, workers to name a few are constantly getting better it does not necessarily mean we must manage things to the $0.93 piece of inventory level. Then again that was New Hampshire…lots of things up there I call into question.
Good old Blackberry, the once powerhouse of the smart phone world has been relegated to fourth when it comes to popular smart phoning behind the likes of Apple and Droid. What is even more telling for our friends in Canada – they are a distant third when it comes the platform application developers seek to create their masterpieces for. This weekend was another story. While some of us were focused on S&P downgrading the United States rating from AAA, over in London there were some riots that broke out due to a tragic incident with the police. This resembles the spark that set off riots in the Paris banlieu back in 2005. In the midst of all this, the news is that these riots were organized leveraging technology, but not Facebook or Twitter, instead it is old reliable – the Blackberry. Why? The messaging system on the Blackberry is easy to use and difficult to hack! Hey, ask the Saudi government about the security of the Blackberry! Once again the strength of the RIM security and encryption for the Blackberry commands some headlines. Once again I wonder why Blackberry does not do a better job advertising and promoting their security.
Businesses are becoming increasingly mobile, I realize this is not a news flash; however, with mobility comes security issues. Just the other day I was in a corporate meeting and counted that over 75% of those in the room had some form of tablet. Rest assured these were not company issued devices! Devices such as the iPad have found their way into the managing of your supply chain. Companies have given iPads to their factory floor works to add efficiencies and mobility to the floor. Functions such as pipeline updates are being linked to mobile devices. All this adds up to: a glut of new data streaming over the air and greater potential for security breaches. So I ask RIM, why not play into this with your iron tight security? Why try to compete with the “cool” kids – Apple and Droid – trying to keep up with all their new apps and fun stuff. Stick to your bread and butter – corporations. Where security and data integrity remain high on the list of must haves.
If the Saudi government is so nervous about your ability to communicate in privacy or if rioters in London rather use your messaging service because the cops cannot hack into the messages, then isn’t it fair to assume that companies would be interested in having this security?