Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Apple Loses Its Magic With Steve Job's Departure

Companies / Tech Stocks Aug 26, 2011 - 06:31 AM GMT

By: Money_Morning

Companies

Best Financial Markets Analysis ArticleKerri Shannon writes: To say Apple Inc. (Nasdaq: AAPL) won't be the same company without Steve Jobs is an understatement.

Jobs helped Apple's share price climb to $373 - a 9,020% gain since 1997 when he was named interim CEO. Earlier this month, Apple's market capitalization grew to $337.17 billion and it briefly displaced Exxon Mobil Corp. (NYSE: XOM) as the most valuable U.S. company, but was unable to hold the lead.


All this from a college dropout who quit his first job to backpack around India.

Yet, the legendary Jobs stunned fans and employees late Wednesday when he announced he would step down as the chief executive officer of the tech giant, 35 years after making his first computer in his parents' garage.

Jobs recommended the company appoint his current fill-in Chief Operating Officer Tim Cook as CEO. Apple's Board immediately did so.

Still, as capable as Cook may be, Jobs' "magic man" presence is irreplaceable.

"I believe the top is in for Apple and it will become a more "normal' company in the future," said Money Morning Global Macro Trends Specialist Jack Barnes. "Steve was an edge they cannot replace. While the company is rich and profitable, it has lost its prophet."

Steve Jobs' Irreplaceable Creative Force
The news wasn't a shock to some Apple-watchers who speculated Jobs' worsening health would lead to a premature exit.

Jobs had been on medical leave since January, popping up occasionally for conferences and product unveilings. This is his third health-related absence; he was gone in 2004 to undergo pancreatic cancer treatment, and again in 2009 for a liver transplant.

Jobs' personality and demanding management style - paired with his creative genius - are what vaulted Apple to the innovative tech leader it's become.

Perhaps the hardest loss for Apple will be Jobs' intuition.

"The big thing about Steve Jobs is not his genius or his charisma but his extraordinary risk-taking," Alan Deutschman, who wrote a biography of Jobs, told The New York Times. "Apple has been so innovative because Jobs takes major risks, which is rare in corporate America. He doesn't market-test anything. It's all his own judgment and perfectionism and gut."

Apple's tech-world contributions with Jobs at the helm include the best of the best: Macintosh computer, iPod, iPhone and iPad. The company will likely release its fifth-generation iPhone in October.

Apple shares slipped 5.13% to $355.70 in after-hours trading following Jobs' announcement, erasing $17.7 billion from the stock's value. The stock rebounded somewhat yesterday during regular trading, closing down 0.65% at $373.72.

Some good news for Apple is that Jobs will remain involved with the company as chairman of the board. But that role does not mean having the final say on what Apple does.

"I think the key question is whether the Apple team will continue to work as effectively as a collaborative without the single person to rely on for the final decision," Charles Golvin, an analyst with Forrester Research Inc. (Nasdaq: FORR), told The Times.

Now that job lies with Cook. While Cook's operational capabilities are superb, few believe he has the ability to replicate Jobs' creative force.

Filling the Creative Void
Cook filled in for Jobs during his medical absences, stepping up from the COO role he landed in 2005. The 13-year Apple veteran is known as being just as obsessive and detail-oriented about his work as Jobs.

Cook was hired in 1998 to fix Apple's deteriorating manufacturing operations. He was a 16-year industry veteran who worked with Compaq Computer and International Business Machines Corp. (NYSE: IBM). He wasted no time showcasing his challenging management style; one well-circulated story involves Cook sending an executive to China during one of his first meetings, with no change of clothes and no return ticket, to tackle a severe manufacturing concern.

Cook successfully used his operational acumen to streamline Apple's supply chain and save the company billions of dollars. He closed factories and warehouses and drastically cut inventory. While his cost-reduction skills aren't as exciting and well-publicized as Jobs' design and marketing talent, they're a major factor in Apple's profitability.

Cook has a broader reach in Apple than any other top executive; he deals with operations, sales, customer support and negotiations with wireless carriers. He also has the work ethic needed to carry a behemoth like Apple. Cook is known for being the first one in the office and last one out, for working every weekend, and for fueling up with energy bars to withstand marathon meetings.

The key to Cook's success will be finding someone in a supporting role to complement the design innovation needs left by Jobs.

"I'm not sure he'd be able to replace Steve's design creativity," Michel Mayer, former CEO of Freescale Semiconductor, told CNNMoney in 2008. "Then again, I could argue that it's not the role of the next CEO to do that."

Apple has time to fill its missing creative role and emerge with its next best-selling product. Apple's pipeline likely has more of Jobs' creations slated for upcoming release, which will dull the short-term impact of his departure. It's the long-term progress with Cook in the top spot that is up for debate.

"We've known this day was coming for a long time even though we didn't know literally "when,'" said Money Morning Chief Investment Strategist Keith Fitz-Gerald. "The next 12-24 months are still Jobs' products, but 36 months from now is the challenge."

Rivals See Chance to Steal Apple's Crown
Now that Apple's long-term success is in the hands of someone other than Steve Jobs, rivals already are looking for vulnerabilities to steal market share.

Samsung Electronics' smartphone and tablet computers, which run on Google Inc.'s (Nasdaq: GOOG) Android operating system, could be Apple's main competition.

"Even before Steve Jobs' (resignation), Samsung was getting more and more optimistic that they can actually take on Apple in the smartphone arena," Mark Newman, senior analyst at Sanford C. Bernstein and former director of strategy at Samsung, told Reuters. "The game is really now Samsung's to lose...They are picking up market share because of the change in dynamics in the smartphone industry."

Samsung's smartphone sales grew 500% in the second quarter, and it just released four cheaper smartphone models to attract emerging-market customers.

Another competitor that could edge out Apple is HTC Corp. The Taiwan-based electronics company has had its innovative touch compared to Apple's and has seen sales soar in recent quarters.

While Apple's iPhone and iPad products position it to compete in the post-PC era, its ability to continue beating rivals lies with creative development.

"Losing a visionary is really hard," Brian Barish, president of Cambiar Investors LLC, told Bloomberg. "It's sad but it's not a total shock. The open-ended question is whether Apple is going to have the vision to continue to develop its market position. Sometimes companies lose their visionary and they continue to successfully do what they've done in the past, but any changes in the paradigm are harder."

Source :http://moneymorning.com/2011/08/26/apple-inc-nasdaq-aapl-loses-its-magic-touch-with-steve-jobs-departure/

Money Morning/The Money Map Report

©2011 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or 72 hours after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in