Apple's bench, product cycle minimize Jobs medical leave worry

Apple's bench, product cycle minimize Jobs medical leave worry

Summary: 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. Apple's product cycle appears to be trumping any worry about Jobs.

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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.

Related: Android vs. Apple: The 2011 cage match

Topics: Health, Apple, Banking, CXO, Legal, IT Employment

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52 comments
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  • Must be a slow news day

    What? Jobs is taking medical leave, and you bother to make a story out of it?

    *yawn* must be a slow news day.
    CobraA1
    • RE: Apple's bench, product cycle minimize Jobs medical leave worry

      @CobraA1 It is a story. Steve Jobs has been one of the major players in the tech field for decades. His resume doesn't need to be posted here as it stands alone. His taking a medical leave is significant news for the second biggest company in the world (market cap). Apple has probably created more major product niches and lines than any other company. It is the sole survivor of the OS wars. Even there if Gates Inc hadn't been a thief in the night you'd still be watching a green screen and typing C prompts. It is this visionary man who's demand for excellence and drive to produce superior products has driven the entire tech industry. The most recent example of Mr. Jobs re-inventing the tablet computer (?) as a consumer electronics delivery system while MS and all the Apple wanna bes languished the form for a decade. At the resent CES there were 80 're-incarnated' tablets that are all trying to emulate the iPad instead of the MS envisioned Windows tablet, which, I repeat, has languished for a decade. In the first month Jobs sold more 'tablet' computers than had moved off of shelves in the entire ten years worth of MS promoting it. The short answer is yes, bothering to make a story out of Steve's health is worth the trouble.
      dheady@...
      • RE: Apple's bench, product cycle minimize Jobs medical leave worry

        @dheady@...
        "It is the sole survivor of the OS wars"

        Uh... what? Are you high?
        12312332123
      • RE: Apple's bench, product cycle minimize Jobs medical leave worry

        @Traxxion<br><br>Clearly he is if he's calling Gates a thief in the night without acknowledging the Apple/Jobs-Xerox situation. <br><br>I do agree this is news. But mostly because any time Jobs leaves Apple to take care of his health, the confidence in the company vision is shaken. Stocks drop (this time was no different). Despite the very capable hands of successors to Mr. Jobs, it always seems to be an uphill battle to convince the stock market that Apple is a company and not the single vision of one man.
        PolymorphicNinja
      • RE: Apple's bench, product cycle minimize Jobs medical leave worry

        @dheady@...

        Were you sitting in front of your Steve Jobs Altar when writing your reply? Did Apple pay you for your response?

        Geez... step away from the Apple Kool Aid!
        smtp4me@...
    • RE: Apple's bench, product cycle minimize Jobs medical leave worry

      @CobraA1 And you've just outed yourself as one of the most clueless nontechnical people here on ZDNet...the mere fact you make folly out of a technical giant such as Jobs shows you have no business being in IT.

      You're like a musician trying to break into rock and roll saying "Elvis died? Who cares?".
      Ron Burgundy
  • As one reader to the WSJ commented on the news about Jobs

    [i]Google cracks a smile, thinking that it?ll be Android?s world from now on[/i]
    AllKnowingAllSeeing
    • RE: Apple's bench, product cycle minimize Jobs medical leave worry

      @AllKnowingAllSeeing I work with both Apple and Android phones all the time. If I were to build a custom kernel and put my own Android OS on top of it I suppose I could craft the greatest phone/tablet of all time. Unfortunately, every Android I've interacted with is crammed full of bloatware and sucking down cpu cycles with background applications.

      I believe Apple to be vastly more abusive of their market position than Microsoft ever was by a very wide margin but I've got to hand it to Jobs & Company - they craft a very, very, very smooth user experience.

      And that is the magic of Apple.
      ianarmstrong
  • RE: Apple's bench, product cycle minimize Jobs medical leave worry

    uh, how many stories do we need about Jobs health and the iPad/iPhone? This sight is turning into an Apple haven. :-(
    jhughesy
    • RE: Apple's bench, product cycle minimize Jobs medical leave worry

      @jhughesy, Jobs knows 'how' to survive and so does Apple! Did it ever occur to you that shareholders and buying public alike admire that kind of gritty toughness and show their admiration with their wallets and stock portfolios? YOU may not think that the man and the company deserve two news stories in a day, but that's just your opinion. Don't confuse your opinion with incontrovertible fact - you can only speak for yourself. Go back to sleep. We'll wake you up if you are needed.
      nkfro
      • RE: Apple's bench, product cycle minimize Jobs medical leave worry

        @nkfro
        Apple has traditionally been a company that's only cyclically successful. When Jobs was fired the first time around, his successors ran the company into the ground.

        Do not forget that the only reason they are around today is because Gates/Microsoft bailed out Jobs/Apple with a pretty substantial investment when he returned.

        So Apple hasn't proven it can survive. Jobs is very resourceful, and he's probably mentored his replacements well. But only time and an extended absence will tell for sure.
        PolymorphicNinja
      • We are bound to have...

        another absolutely false comment about Microsoft "saving" Apple back in the day--when the slightest bit of research will remind/teach anyone that Microsoft invested $150 million in Apple stock (at a time when that equaled only 7 days of Apple revenue) and committed to continue Macintosh versions of the Office Suite, all to settle Apple's lawsuit against Microsoft for blatantly stealing the heavily patented "look and feel" of the Macintosh GUI. Of course, Microsoft later sold the stock for a nice gain, and they continued to make their usual obscene profits on Office for Mac. What a deal--but not in the least "saving" Apple.
        frabjous
  • RE: Apple's bench, product cycle minimize Jobs medical leave worry

    A story talking about Apple's stock! Oh I called it yesterday and was scolded for it. Here we are today and this is the 2nd one. Uh huh.
    Loverock Davidson
    • RE: Apple's bench, product cycle minimize Jobs medical leave worry

      @Loverock Davidson That's because you're a proven troll and a complete idiot.

      By the way, excellent how you got your ass handed to you by the article author. I printed it and framed it.
      Ron Burgundy
      • RE: Apple's bench, product cycle minimize Jobs medical leave worry

        @Ron Burgundy You're my hero.
        razorsyntax
      • Message has been deleted.

        SonofaSailor
  • profits

    this will be apple's first quarter when they will eclipse microsoft in profits (they already had higher revenues for the first time ever last quarter).

    wow! who would have predicted that three years ago? well, actually a lot of apple watchers did but surely no one on zdnet.
    banned from zdnet
  • Apple's marketing arm hard at work on ZDNet!!

    Story after story after story after story after story about how great Apple was, is, and will be, how fantastic the stock was, is, and will be, and how great Apple's products have been, are, and will be. Better make sure that the RDF doesn't wear off with Jobs gone!!
    NonZealot
    • RE: Apple's bench, product cycle minimize Jobs medical leave worry

      @NonZealot Yet you own an iPhone and a Macbook.

      Cue the double standards.
      Ron Burgundy
      • Someone changed their nic. I bet they think it's funny.....

        Hate to spoil your party, wannabe, but you will always remain a neverbe.

        Now please go take <i>your</i> medical leave and go back to rehab.
        xuniL_z