How Will The Resignation of Steve Jobs Affect Apple?

August 25, 2011

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On Wednesday, Apple announced that CEO Steve Jobs will be stepping down from that role.  Jobs has been battling health issues – including pancreatic cancer – for several years, so the move was not completely unexpected.

For most people, Steve Jobs IS Apple.  Co-founder Jobs was forced out of Apple during a 1985 power struggle with CEO John Sculley (whom Jobs had hired).  By 1997, Apple was in a death spiral and its stock was hovering around $13 per share.  At  the close of day yesterday, Apple’s stock has trading at $373.60.  That’s impressive enough – but there have been two stock splits since then, meaning that a single $13 share has turned into 4 current shares worth a total of $1494.40.  As a longtime fan of Apple products, it was great to see Jobs initiate such a dramatic turnaround.

The big question is how this will affect Apple long-term.  Will the company endure a  recurrence of Jobs withdrawal?  I think things will be different this time, and these are the reasons:

This separation is different – The separation in 1985 was far from amicable.  Jobs was essentially fired.  This is a very different situation, with Jobs continuing as chairman of the board, as well as an Apple employee in some capacity.  He’ll be around to mentor new CEO Tim Cook as needed.  Barring a dramatic downturn in his health, Jobs is not going to simply fade into the background – he’ll still represent Apple.

The company culture is different – When Jobs was forced out in 1985, Apple was a company with a lot of infighting.  The Apple II division and the Macintosh division considered themselves to be rivals, with the Macintosh division flying a pirate flag over their building.  There was no strong sense of direction.  In fact, the Apple IIe line was not discontinued in 1993 … nine years after the introduction of the Macintosh.  While I loved the IIe as a kid, the Mac was an exponentially superior product by the time 1993 rolled around.  At the time Jobs left, the company was just 9 years old – still not fully mature.

The company is more diversified – When Jobs took over in 1997, Apple basically offered just Macs.  Jobs streamlined the number of different Mac models (at the time, there were a large number of models being sold, creating confusion for customers).  Since then, Apple has branched out into new areas (iPod, iTunes, iPhones, iPad, etc).  This diversification makes the company less vulnerable to a downturn in a specific market.

In a nutshell, I expect Apple to continue to charge forward.  Tim Cook has been with Apple since 1998, had been serving as Chief Operating Officer, and was the man Jobs had hand-picked to succeed him.  I expect that Jobs will still be involved in a lot of design decisions, while distancing himself from the more “boring” types of work.

One Comment (+add yours?)

  1. Evan
    Aug 25, 2011 @ 09:15:58

    I think there will be changes, but Apple will be fine. It could hurt them in the long run, though, if he is as involved in every small decision as the stories say. Vic Gundotra, a Google VP, was telling an interesting story on Google+ yesterday about getting an urgent voicemail while in church on a Sunday some years back. The message was from Jobs, asking him to call right away about a matter of high importance . Gundotra was in charge of mobile for Google back then, so he dealt with Jobs all the time. He called Jobs back, and it turned out Jobs was concerned because the yellow color in the second “O” in Google on one of the native iPhone Google apps (Maps maybe) wasn’t quite the right shade, and Jobs had somebody on it to take care of it and wanted him to work with Gundotra to get it fixed ASAP.


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