Apple CEO Steve Jobs is taking another medical leave and handing the reins to Tim Cook, chief operating officer, for day to day operations, but the reaction this go-round is devoid of much drama.
On Monday, Apple said Jobs would take a leave to deal with health issues. Jobs is a pancreatic cancer survivor and last took a leave in 2009. This Jobs departure, however, is different. Here's why:
- Jobs is staying CEO, which could indicate a shorter absence.
- This is the third leave for Jobs since 2004. The last time Jobs took a medical leave, Cook showed he was capable of operating the company.
- Apple has a deep management bench and the company has been better about showing off the skills of Cook and execs like Phil Schiller.
- The company is in excellent health and has a product roadmap that is largely set for the next 12 months with the launch of the Verizon iPhone, iPad2, iPhone 5 and international expansion.
- If Jobs did leave it wouldn't hit Apple's fundamentals for years.
Simply put, this Jobs medical leave is different. Last time, histrionics ensued as folks pondered an Apple without Jobs. This time, the succession drill has been established. In fact, it was hard to find any analyst that was worried about Jobs' tenure at apple.
Oppenheimer analyst Yair Reiner said:
It's difficult to overstate Jobs' role in Apple's success or the fundamental long-term risk to the company should his leave evolve into a departure. But given Apple's valuation (14x FY11 EPS, ex-cash), it's hard to argue Apple's stock enjoys a "Jobs premium." Depending on one's point of view, it could signal the expectation of a quick return or the prelude to a looming valedictory. In the coming days, Apple's board will likely come under tremendous pressure to provide further disclosure—at least about the leave's likely duration.
Wedbush analyst Scott Sutherland said:
We would note that we believe Apple’s product pipeline and strategic direction is fairly well set for the next year or two with several products set to release in the near future, including the iPad 2 (expected in April) and the iPhone 5 (expected early summer). Furthermore, we believe Mr. Cook has demonstrated a solid ability to manage Apple’s day-to-day operations. Looking forward, we believe Mr. Jobs remains important to Apple’s strategic direction, though we also believe a more Internet/cloud-based perspective also needs to be taken, given the rise of Android.
Sutherland also wondered if Jobs' medical leave had been planned given his appearance on the last earnings call, which turned into an anti-Android rant.
Jefferies analyst Peter Misek was among the few that struck any tone of worry about Jobs' leave. Misek wrote:
Length of leave unknown. Reason unknown, but the wording of this leave is different and therefore implies a more unknown tenure to his departure. This could be extended.
Analysts are generally upbeat because Apple is expected to report a monster quarter once the market closes on Tuesday. Wall Street is expecting Apple to report fiscal first quarter earnings of $5.40 a share on revenue of $24.43 billion. Here are the key metrics for the quarter:
Apple is expected to sell 6.2 million iPads in the December quarter. Piper Jaffray analyst Gene Munster, however, is looking for 5.5 million. Here's a look at Munster's targets.
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