Yesterday Apple CEO Steve Jobs announced that he was taking another medical leave of absence, and within moments the blogosphere erupted into a cacophony of noise. But one statement seemed to rise above the overall noise more than others - Apple can't survive without Steve Jobs.
I'm not going to speculate at all about what's behind this latest medical leave of absence. Jobs asked for privacy, and I respect that. What I will do is speculate about the effect that this will have on Apple, and what effect Jobs stepping down as CEO might have in the short, medium and long term.
Let's start with the obvious. Apple is in good shape. Excellent shape. Jobs has during his latest tenure as CEO overseen some remarkable game-changers - the iPod, iTunes, the iPhone and the iPad. These products have propelled Apple from being a niche computer manufacturer into the number one household consumer electronics brand.
There's no doubt that Jobs played a big part in shaping Apple and helping it grow beyond that early base of cult followers and taking the company mainstream and beyond. Like Apple or not, you can't dismiss the impact that the company has had on consumer electronics, music and movies. Jobs has done a marvelous job as CEO, and whether you own any Apple products or not, I'm certain that in some way Apple's vision will have shaped and influenced some of the tech you have in your life. Apple shareholders should especially be grateful for the work he's done and the effort he's put into Apple.
So, given that Jobs has done so much for Apple, are the pundits right? Is Apple doomed without Jobs?
In a word, no.
The pundits who think that Apple is doomed without Jobs are thinking of the old Apple, the fanboyism and the whole 'Cult of Apple" thing. Sure, there are developers and consumer (and pundits, I'm sure) who hang on to every word uttered by Jobs at keynotes and financial conference calls, but if you take in the bigger picture it's easy to see that Apple has outgrown these beginnings. People don't stream into Apple's retail and virtual stores because Steve Jobs tells them to. They don't buy apps and music and movies because Steve Jobs tells them to. People buy Apple products because Apple is a powerful brand. It's also fair to say that the vast majority of people buying Apple products don't know much about, or care much about, Steve Jobs.
This obsession with Jobs and how he is the keystone of Apple exists primarily in the minds of some pundits and investors. Consumers as a whole don't care.
Sure, I'll admit that keynotes wouldn't be the same without Jobs, but the idea that the company can't run without him is ludicrous. Jobs took medical leave of absence during 2004 and for the most of 2009, leaving Tim Cook both times, and the compony continued to operate as normal. Apple didn't implode. People didn't shun iPods and iPhones. In fact, Apple has some strong results those years.
All this is not to say that investors wouldn't be spooked by Steve Jobs standing down as CEO. The fact that Jobs announced that he was on medical leave of absence on a Federal holiday when the markets were closed and the day before earnings announcement is evidence enough that Apple is aware of how easily panicked investors are by any negative news related to Jobs. Some investors had already been calling for Apple to outline a clear CEO succession plan.
We've yet to see what effect yesterday's announcement will have on Apple share price, but it Jobs were to step down I'd expect share price to drop between 10 - 25% (I don't own any Apple stock, so I don't lose any sleep over this). But I'd also expect Apple to recover within a few months as investors became reassured that it was business as usual at Apple.
I agree wholeheartedly with Jason O'Grady's prediction for Apple:
I think that Apple could be a $500 stock and split within a year. Its fundamental are rock-solid and it has a full year lead on its competition in many areas. Hypothetically, if Jobs had to be replaced tomorrow, a complete imbecile couldn’t stop Apple’s rocket-like trajectory for 3-5 years. And if someone halfway decent replaced Jobs, Apple could continue to dominate for another 10-15 years. Easy.
With or without Jobs at the helm, Apple isn't going anywhere.
[UPDATE: AAPL stock opened today nearly 5% down, but this is still higher than it started the year at on January 3rd.]