Apple’s co-founder and CEO Steve Jobs has finally resigned, handing over the reins to Tim Cook, formerly COO at the firm. But Jobs has asked to become chairman instead. After a long battle with ill health, he wrote in a letter to the Apple board:
I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know. Unfortunately, that day has come.
I hereby resign as CEO of Apple. I would like to serve, if the Board sees fit, as Chairman of the Board, director and Apple employee.
As far as my successor goes, I strongly recommend that we execute our succession plan and name Tim Cook as CEO of Apple.
I believe Apple’s brightest and most innovative days are ahead of it. And I look forward to watching and contributing to its success in a new role.
I have made some of the best friends of my life at Apple, and I thank you all for the many years of being able to work alongside you.
Apple’s brand is inextricably linked with Jobs, who was actually ousted by his own board in 1985 only to found another successful firm, NeXT Computer, which Apple then bought – bringing Jobs back into the fold in 1996.
That marked a turning point in Apple’s fortunes, as Jobs and recent hire Tim Cook brought efficiency back to Apple’s business, and innovation back to its product lines. That innovation was best highlighted by the iMac, and continued with the iPod, iPhone and iPad. The latter three are especially noteworthy, shaking up the music player, smartphone and tablet computer markets immeasurably.
Those innovations, as well as a huge advantage over competitors thanks to its vast component purchasing power and economies of scale, have helped Jobs and the Apple team grow the firm to where it is today: worth around $220bn (£194bn) and profits of $7bn (£6.1bn) in its most recent financial quarter.
Apple without Jobs
So what does Jobs’ transition from CEO to chairman really mean for Apple? Precious little in the short to medium term, as it turns out. Not only has Tim Cook shown he can effectively lead Apple during Steve Job’s previous bouts of illness, but as Michael Gartenberg, research director at analyst firm Gartner notes, “While this marks the end of an era for Apple, it’s important to remember the there’s more to Apple than any one person, even Steve Jobs. Continuing as chairman Mr. Jobs will continue to leave his mark on both the company and products even as he transfers the reigns to Mr Cook.”
The firm is of course in superb financial health, is the most valuable technology firm in the world, and has the most precious brand of any firm according to brands agency Millward Brown. Its technology roadmap is already clearly established for the next few years at least, with better versions of various iDevices already on their way.
But longer term there is more room for doubt. Not only is Jobs largely credited with Apple’s turnaround in the Nineties, but many of the firm’s most iconic designs are said to have been heavily influenced not only by designer Jonathan Ive and his team, but by Jobs himself. He is said to be maniacal about ease of use, sending products back to design if they are not immediately intuitive.
Another area where Jobs’ experience has clearly paid off is in his building not just of computers and gadgets but related ecosystems. His deftness here was first highlighted by iTunes, which enabled Apple to capture not just a large chunk of the MP3 player market but a large chunk of the music distribution business to boot.
Jobs helped build another ecosystem around the iPhone, making it easy for developers to build applications to populate the Apple App Store, and spawning an entire industry in the process. 72 per cent of Apple smartphone users download at least ten third-party applications, while 73 per cent of BlackBerry users have picked up five apps or less, according to research by media analysts Compete.
The iPad again has an ecosystem of third party application developers, helping to make Apple’s tablet potentially far richer than competing offerings. A lack of applications was one of the reasons HP’s Touchpad saw such muted demand – HP ditched its ‘iPad killer’ just 45 days after its launch.
But these ecosystems have not been without their critics. Publishers have been angered that Apple takes 30 per cent of any subscription revenues they earn selling subs through the App Store.
Users have complained that the App Store is not truly ‘open’, since all applications must be approved by Apple. Apple doesn’t allow any pornography in the App Store for instance, but more worryingly Apple has been accused of blocking applications that compete with its own apps. It blocked an iTunes-like application and Google Voice, prompting the Federal Trade Commission to investigate and pressure Apple to change its stance.
It also refuses to allow Adobe’s Flash player to run in the browser on its devices like the iPhone and iPad. Apple claims this is because Flash is proprietary (as are many of Apple’s products), and is left wanting when it comes to security, performance, reliability and its impact on battery life. Others believe it is simply to maintain its stranglehold on the App Store – Flash can be used to enable all sorts of applications and games that would not require a download from the App Store, robbing Apple of potential control and revenue.
But for all this, it’s clear that these ecosystems are one of the reasons that Apple has done so well with Jobs at the helm. Once one has invested in applications from the App Store, many punters will stick with Apple devices if one breaks or is lost or stolen, to avoid having to start over with new apps.
With Jobs now in the chairman role he will still have influence over Apple’s direction and those all-important ecosystems, an area where he seems to have a Midas touch. But if, as seems likely, his tenure at Apple is finally coming to an end, Apple’s long term future is surely less assured without him. After all, it was only when Jobs returned to Apple in 1996 that its boom years really began.
I’ve been saying since January that Jobs should leave Apple, not just for some of his less convincing recent business decisions but also in order to bring clarity and consistency to the leadership role. Questions over his health have surely been a distraction for management and staff.
Apple’s iconic co-founder has not been without his critics for some of his approaches to competition and customer service. But few would question his utter brilliance at this technology lark, his passion for the industry and of course for Apple. Whichever way you look at it, Apple will feel his loss when Sir Steve finally does leave the building.
Jason Stamper is NS technology correspondent and editor of Computer Business Review.