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.