Steve Jobs absence from Macworld’s keynote this year is being taken as a sign. What signal Apple is actually sending is debatable, but some analysts are taking a strong hint that the company is ready to transition leadership.
Apple said Tuesday that it will end its relationship with Macworld after this year and product marketing chief Phil Shiller will do the keynote (Techmeme). The company line is that Apple doesn’t need Macworld (very true since big tradeshows are all but dead), but it’s hard not to read between the lines here. There are multiple messages
in the Apple-Macworld breakup.
And one big message surrounds succession planning at Apple. Remember that Schiller and chief operating officer Tim Cook took center stage at an October event too. Cook even dressed like Jobs (right). That was hint No. 1 that Jobs is easing back a bit to set the stage for the new guard.
Other folks can debate Jobs’ health as a factor–some heavy hitter investors like Doug Kass voted with their greenbacks and bought Apple shares afterhours on the initial fall. Jobs’ health, Macworld politics and other theories, however, really are the sideshow. The signs from Apple appear to be pointing to some sort of succession dance. Jobs is the face of Apple, but it’s unclear how much longer that will last.
What does Apple look like without Jobs?
Piper Jaffray Gene Munster writes:
Steve Jobs remains CEO of Apple. Apple could have diffused speculation regarding Steve Jobs’ health by having him keynote this year’s Macworld. While we do not believe that this change provides any indication regarding Steve Jobs’ health, we do believe that it is a sign that we are in the early stages of changing roles in Apple’s management structure.
Munster’s argument makes sense although it may be better if Apple discloses some sort of succession plan, allays concerns about Jobs’ health and puts a timeline on the process. Jobs has already noted that his demise is greatly exaggerated. He has also turned up on earnings conference calls to prove it. Yet the succession question persists. Succession plans can work well–General Electric is an example–but shareholders need some sort of transparency.
Frankly, Apple’s process is a bit murky and the company needs better disclosure. Indeed, Oppenheimer analyst Yair Reiner downgraded Apple because it won’t disclose or elaborate on a succession plan.
Reiner wrote:
Maybe (Jobs is) not feeling well, or maybe he just has nothing new to say. Whatever the reason, the unexpected announcement has underscored the greatest risk to Apple’s long-term success–its dependence on Jobs’ health and its apparent lack of a succession plan. Six months have passed since Jobs appeared at the Apple Developer Conference, looking drawn and unwell. It’s past time for Apple to either disclose the state of his health or elaborate a viable plan for eventually transferring power.
Reiner may be reaching–and Apple seemingly has allayed Jobs worries before–but he does capture the uncertainty reflected in shares.
Perhaps Apple’s best move would be to make Jobs chairman and name a new CEO. Set up the Bill Gates-Steve Ballmer arrangement at Microsoft followed by a slow victory lap for the chairman. If Apple’s team is as strong as advertised the company should show its cards.
Munster writes:
We believe that Apple’s executive team is one of its competitive advantages. Led by CEO Steve Jobs, COO Tim Cook, CFO Peter Oppenheimer, and nine Senior Vice Presidents who share a collective track record of consistently outpacing their competitors in terms of hardware and software innovation coupled with robust product marketing and financial discipline. This management team, along with Steve Jobs, has been responsible for Apple’s product innovation.
That’s true, but you’d be a fool not to acknowledge the uncertainty. Depending on who becomes Apple’s CEO there will be turnover. Those nine senior vice presidents aren’t likely to stick around once Jobs leaves and a successor takes over. It never works that way.
The big question is whether Jobs’ ethos is a permanent staple of Apple now. It’s possible–think Wal-Mart where Sam Walton’s core beliefs still drive the company. The good news: Now is the time to plot the succession moves for Apple. The product cycle has never been stronger and Apple is in great shape. As far as Apple’s health goes there may be no better time than the present to put some fresh faces out there.Apple can put a lot of worry to bed by detailing its succession plan. Mac fans need transparency not hints delivered through keynotes and press conferences.
