Wow. Even though everyone saw this one coming, I dont think anyone expected it to happen so soon. It will be interesting to see how the market reacts tomorrow, I imagine it wont be pretty.
As the COO, Cook did great job lining up and executing the production line. Most of the creative work should already be in the pipeline for the 2012, 2013 releases. We'll see what happens after then.
Smart phones existed before the iPhone; Apple/Jobs just made them orders of magnitude better. Tablets have existed before the iPad; Apple/Jobs just made the first one the market fell in love with.
What new markets have they created?
Now, don't get me wrong... I love Apple. I have a Mac and an iPhone and Cinema displays. I'm jealous of my friends with iPads. Etc. I just don't see any brand new markets.
How about iTunes? The App store? The iPad? I can go build some shit product and ship it first, but without a reliable customer base, there is no market. So yes, I think it is fair to say Apple has created new markets. Prior to 2007 the Motorola Razr was the most popular phone on the market. Enough said.
There was an existing market for MP3 players, smart phones and tablet PC's. Apple didn't create them. It expanded them and introduced the products to the masses.
"It expanded them and introduced the products to the masses."
And how is this not creating new markets? I think you are confusing markets with ideas. IBM wasn't the first to come up with the idea of the computer, but it certainly created new markets for it. Absent actually producing the product that is sold in the market, an idea (or a poorly implemented version of it) isn't much good.
I would actually disagree. How many first-year undergrads did you see with a Blackberry or a Windows Mobile device in the pre-iPhone smartphone market? How many middle-aged couples on airplanes did you see with a Fujitsu tablet before the iPad? There were small business and enterprise smartphone and tablet markets before Apple entered them, but there sure weren't consumer markets for these categories.
Most everyone else didn't either a few years ago. Then came iPod, iTunes Music Store, iPhone, iPad. It all seems kinda obvious now, but nobody else did it. That's vision and leadership, and the world needs more of it.
It makes perfect sense as part of the succession planning for Apple. This way, when Steve (very sadly) resigns "permanently" from any and all jobs, it will just be business as usual and not take down the Apple stock by 30% or something equally ridiculous.
Not for very long. There's no real reason for it to do so. This was entirely predictable. Sure, a bunch of people are going to short, but they'll be sorry they did.
I truly, sincerely hope you're right. I've always seen Jobs as a visionary leader, but I'm uncertain he's been similarly effective at grooming a leadership team (or individual) with the same vision. Cult of personality and all that.
Part of Apple's success, IMHO, has been Jobs' ability to cut through bureaucracy, egos, corporate politics and industry politics to execute on a pristine vision. Perhaps it's my lack of faith in middle managers, but unless there is a clear mandate from leadership, details & priorities can morph down the chain of command. Visionary products can be diluted by others making what seem like perfectly sound trade-offs. It's the minimization of that dilution, setting of crystal-clear priorities, and making the hard trade-off decisions that has made Jobs such an effective leader at Apple.
That, and his ability to look several steps ahead of an industry - and arguably to create new industries - that has given rise to so many of Apple's disruptive innovations. Without him, I have a bad feeling Apple will become better at creating sustaining innovations than disruptive ones.
Of course, I don't work there and perhaps there are many others who can make such tough decisions and dream up industry-changing visions. I sincerely hope so. For the growth of the company, I sincerely hope so.
In the short term, probably yes. But maybe folks have been putting that "discount factor" all along since January. But they have a pretty solid line up ahead (iphone5, sprint-iphone, ipad3, a new product line... and lots of others to come). Plus the iphone/ipad revenues are still growing - so that will only get better in the next few quarters. Very likely, AAPL the stock will move on higher.
Because they dont care.
If the stockmarket would be everything to them they would do so.
But Apple is sitting on so much liquidity that they dont go crazy if there stock drops by 5%.
And the company is in a perfect shape there is nothing wrong with it the same goes for the future.
And the company is in a perfect shape there is nothing wrong with it the same goes for the future.
Of course, Andy Grove would call this the most perilous time imaginable. There have never been so many things that can go wrong.
Worst case, Cook and the executive team fail in the opposite direction as they did before, letting the company stagnate while endlessly arguing "WWSD?" among themselves.
Every half-witted investor is already lining up to buy AAPL shares that will of course drop tomorrow in price as quarter-witted investors will be dumping them because of the Jobs' news. This will ramp up the demand and not let the price slide.
i'm inclined to believe that the probability of jobs resigning, especially after his medical leave in january, was already priced into the stock.
this would imply the market prices steve's value to the company > the 5% drop we saw after hours, since the 5% drop should reflect the incremental change of P(x) = 1. i'm not saying the stock won't take a huge hit tomorrow, but my bet is that it recovers in the near-to-medium term.
i am also not saying that the market is right - i wholeheartedly believe the company and its management can execute on steve's vision and has been for some time without daily guidance.
Bloomberg west is already 40 minutes over time discussing Jobs' departure. Given the current market position of Apple, this comes at a bad time for the US economy in general i guess.
Huge news. One can expect an overwhelming wave of punditry about this move, but it'll be interesting to read their official press release and what his role will be moving forward.
Surely he'll still be the arbiter of taste until he's dead?
It pains me to admit it, but I'm relatively relieved. Sure, the stock price will take a beating, but I have to believe that Apple, the company, will remain strong under Tim Cook's leadership.
Why am I relieved? Because, although AAPL is still quite high, I think that investors have been weary of the stock due to the uncertainty of Jobs' health and future. Make no mistake, we'll have a roller coaster for quite a while, but I strongly suspect that the next few product cycles will demonstrate that Apple is still a game-changer even in a world where Jobs is not at the helm.
That being said, I'll miss him. He's a true visionary and such high-profile leaders only come along once in a great while.
I have to insert one mild troll here: you seem to be writing in the voice of an Apple investor, yet from context you seem more like a user or developer. Why is the value of AAPL a universal good? Seems like it's quite high enough already.
Not a troll... a good question. The answer is I am all of those. The high value of AAPL is not a common good (although it's obviously good for me), but I was referring more to the constant fear in the markets of the eminent instability of the stock. There are many who believe that Apple IS Steve Jobs. I disagree, but it will be nice to see them come out of his shadow. And Apple will be a much easier stock to judge from an investment standpoint when that happens.
Hmm can you expand on why you think Apple isn't Steve? There are surely many great people at Apple. But Steve maintained an unwavering, fanatical commitment to product. That's the secret sauce. With him gone how will that continue? With a company that size, surely politics and other bullshit will eventually creep in and win out in arguments over product.
A plausible explanation is because Steve created an enduring culture at Apple, one which strongly set Apple apart. Not only does this permeate from the upper management down to the rank and file, but Apple also has the benefit of seeing how well it did without that culture.
AAPL on one had is a Wallstreet darling and on the other a rebel. They don't listen to Wallstreet analysts or investors and are constantly punished for it in their stock price (really it should be much higher but it's not). Instead of producing cheaper laptops to increase market share they just make more featurepacked ones at the same price. Instead of going after the enterprise market they just do basic enterprise sales and implement some enterprise features. Other PC manufacturers got out of the PC business because there is no money to be made there and they double down on it.
Instead of following trends like many other companies they completely buck them. And this gets them painted as unpredictable. And this is why there PE is so low. Because they are constantly growing but the analysts are convinced this is their peak and it only goes downhill from here.
I wonder how that delay reflects on the Apple org chart. Do the people behind /pr/ have advance notice of big announcements? Does Steve send his letter to them at the same time he sends it the Wall Street Journal?
Probably. It just kind of reminded me of that thing where the original iPhone hardware people supposedly had no idea what the software would look like, and vice versa.
I'm sad too. He is a once-an-epoch leader. Think what the world would be like without him. Amazing that a business leader can be so important and foundational to the world.
Hmm..the time to do that would've been earlier today (before trading closed). If you do tomorrow, the pre-trading hours, the floor traders (and options traders and hence probably the institutional clients) would've an advantage of half-an-hour before us retail investors. So the opening price itself will be low enough. From then on, it would just be the crowd/herd movement. As Buffet said, "the stock market is a popularity voting contest in the short term, but a weighing machine in the long term".
I'm preparing a presentation for the HN Meetup in London tomorrow and I used Apple as a 'forthcoming' example of Succession and its impact on equity/ share value. Guess I better reword that bit now, and again when the markets open tomorrow.
Agreed, in fact I suspect that the 'chairman' position may also just be something to keep the stock from nose-diving and that it may not last long. I just have a feeling that Jobs wouldn't step back until he really really had to, and that it may be a sign of things being worse than he will let on right now.
Steve will now be Chairman of the Board, to answer some questions from other comments. It's hard to see how this does not at least hint at some more bad health news, although I too hope that it does not mean this. Here's Steve's letter to the Board:
How so? He was already on leave. Being on leave doesn't put a big strain on your health because you're not having to go in to the office. So how would health issues force him to step down?
I guess maybe if he was so sick he physically couldn't go into the office but he's remaining chairman so that can't be the case.
The difference between going on leave and resigning is that it's expected that you will come back from leave. Sometimes health problems have a chance of getting better, and sometimes that chance goes away.
To put it bluntly, he's dying. His health hasn't been good in a while[1], and he's probably resigning to a) spend time with family before he goes, and b) to limit the damage to the company when he does.
I was really hoping that such succession news would be delivered by the man himself, if and when it happened. But I presume that's not going to happen.
"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."
Because he's 56 years old and wants to start living a well deserved retirement?
He's already on leave. So it isn't like there's a great strain on his health now. I would think no more than there will be when he remains on as chairman of the board. Which is the real point.
If health were forcing him to step down he wouldn't be staying on as Chairman. There are significant duties to being Chairman of the Board. You have to appear in public, you have to go to official functions, and so on. You can't hide a serious illness and still be chairman of the board.
I think health is the only reason that would force Steve Jobs to quit, he likes what he's doing.
Being a Chairman of the board is a message to stockholders: "Don't panic, I'm still available", if he stepped down without an orderly transition Apple stock would probably really take a beating.
The chairman of the board is fairly invisible from a public point of view.
He's actually been on a leave of absence so he could focus on his health. This is after being diagnosed with pancreatic cancer (whose 5 year survival rate is sub-20%-- 6% if you count all stages). And toss a liver transplant on top of all of that.
I wish you were right, but Steve Jobs is clearly not a well man, and he seems to have been getting worse for some time.
On the offchance that he did stage a miraculous recovery and decide "Well shit, now I'm all better I think I'm gonna go buy a large tropical island!" he would have mentioned his miraculous recovery in his letter, since his health problems are well known.
Sure, everyone knows that he's been having health problems, but he could have made this decision just because "it was the right time" not because his health problems had worsened. Like he could have gone on, but felt that everything was in place for a smooth transition.
However, "I could no longer meet my duties and expectations as Apple’s CEO" is not just that.
That is what almost everyone says in these notes. "could no longer meet my duties" could easily mean "because I want to go on vacations with my wife and kids every day of the week for the rest of my life".
No, most say that they want to spend more time with family.
"Could no longer meet my duties" + pancreatic cancer = a strong chance that the doctors gave him a number of how long he had left to live, and it wasn't it years.
(That doesn't mean that Jobs can't beat the odds, of course!)
This makes me sad to think that Steve has made this decision on a daily basis - should I carry on at Apple today? And one morning, probably this week, he decided that he couldn't.
I'm sad about this in the same way I'm bummed when a great athlete retires. We've witness one of the greatest turnarounds in history, and though I'm confident that Apple will remain strong, it sucks to see this happen.
I generally agree on buying when there's a dip. Except if the dip is due to a drop in the fundamental ability of said company to execute. A reasonable person could bet that while there may be no near/medium term ability in their ability to execute, that there will be a medium/long term drop. That old saw about A picks A, B picks C, C picks D, etc. There will likely be a decay.
319 comments
[ 3.5 ms ] story [ 271 ms ] threadAs the COO, Cook did great job lining up and executing the production line. Most of the creative work should already be in the pipeline for the 2012, 2013 releases. We'll see what happens after then.
From Jobs' own mouth, it was his idea for the iPad a decade ago and from that sprung the iPhone.
What new markets have they created?
Now, don't get me wrong... I love Apple. I have a Mac and an iPhone and Cinema displays. I'm jealous of my friends with iPads. Etc. I just don't see any brand new markets.
And how is this not creating new markets? I think you are confusing markets with ideas. IBM wasn't the first to come up with the idea of the computer, but it certainly created new markets for it. Absent actually producing the product that is sold in the market, an idea (or a poorly implemented version of it) isn't much good.
Danger's Sidekick line was popular with those less enterprisey demographics and predated the iPhone by quite a while.
Most everyone else didn't either a few years ago. Then came iPod, iTunes Music Store, iPhone, iPad. It all seems kinda obvious now, but nobody else did it. That's vision and leadership, and the world needs more of it.
Still, quite a shock.
Part of Apple's success, IMHO, has been Jobs' ability to cut through bureaucracy, egos, corporate politics and industry politics to execute on a pristine vision. Perhaps it's my lack of faith in middle managers, but unless there is a clear mandate from leadership, details & priorities can morph down the chain of command. Visionary products can be diluted by others making what seem like perfectly sound trade-offs. It's the minimization of that dilution, setting of crystal-clear priorities, and making the hard trade-off decisions that has made Jobs such an effective leader at Apple.
That, and his ability to look several steps ahead of an industry - and arguably to create new industries - that has given rise to so many of Apple's disruptive innovations. Without him, I have a bad feeling Apple will become better at creating sustaining innovations than disruptive ones.
Of course, I don't work there and perhaps there are many others who can make such tough decisions and dream up industry-changing visions. I sincerely hope so. For the growth of the company, I sincerely hope so.
And the company is in a perfect shape there is nothing wrong with it the same goes for the future.
Of course, Andy Grove would call this the most perilous time imaginable. There have never been so many things that can go wrong.
Worst case, Cook and the executive team fail in the opposite direction as they did before, letting the company stagnate while endlessly arguing "WWSD?" among themselves.
Every half-witted investor is already lining up to buy AAPL shares that will of course drop tomorrow in price as quarter-witted investors will be dumping them because of the Jobs' news. This will ramp up the demand and not let the price slide.
this would imply the market prices steve's value to the company > the 5% drop we saw after hours, since the 5% drop should reflect the incremental change of P(x) = 1. i'm not saying the stock won't take a huge hit tomorrow, but my bet is that it recovers in the near-to-medium term.
i am also not saying that the market is right - i wholeheartedly believe the company and its management can execute on steve's vision and has been for some time without daily guidance.
Surely he'll still be the arbiter of taste until he's dead?
Edit: Yup, I meant Tim Cook... Doh!
You mean, Tim Cook. Freudian slip, I understand.
Why am I relieved? Because, although AAPL is still quite high, I think that investors have been weary of the stock due to the uncertainty of Jobs' health and future. Make no mistake, we'll have a roller coaster for quite a while, but I strongly suspect that the next few product cycles will demonstrate that Apple is still a game-changer even in a world where Jobs is not at the helm.
That being said, I'll miss him. He's a true visionary and such high-profile leaders only come along once in a great while.
Instead of following trends like many other companies they completely buck them. And this gets them painted as unpredictable. And this is why there PE is so low. Because they are constantly growing but the analysts are convinced this is their peak and it only goes downhill from here.
Steve's letter is on the site now.
And you're right.
I like that quote. I'm going to eat it.
Edit: as pointed out below, after/pre-hoursm
http://finance.yahoo.com/news/Letter-from-Steve-bw-220060757...
I guess maybe if he was so sick he physically couldn't go into the office but he's remaining chairman so that can't be the case.
All the best to Steve and his family..
[1] http://en.wikipedia.org/wiki/Steve_Jobs#Health_concerns
What is he dying from exactly? Does anyone know?
All the best to Steve and his family.
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."
From the WSJ blog: http://blogs.wsj.com/deals/2011/08/24/steve-jobs-resigns-as-...
EDIT: Now posted on Apple.com: http://www.apple.com/pr/library/2011/08/24Letter-from-Steve-...
He's already on leave. So it isn't like there's a great strain on his health now. I would think no more than there will be when he remains on as chairman of the board. Which is the real point.
If health were forcing him to step down he wouldn't be staying on as Chairman. There are significant duties to being Chairman of the Board. You have to appear in public, you have to go to official functions, and so on. You can't hide a serious illness and still be chairman of the board.
Mark my words: This is all about Tim Cook (Which, if I might toot my own horn, I predicted here: http://tomstechblog.com/post/Ie28099m-Not-Sure-Steve-Jobs-Is...)
Being a Chairman of the board is a message to stockholders: "Don't panic, I'm still available", if he stepped down without an orderly transition Apple stock would probably really take a beating.
The chairman of the board is fairly invisible from a public point of view.
Of course it's about his health.
On the offchance that he did stage a miraculous recovery and decide "Well shit, now I'm all better I think I'm gonna go buy a large tropical island!" he would have mentioned his miraculous recovery in his letter, since his health problems are well known.
However, "I could no longer meet my duties and expectations as Apple’s CEO" is not just that.
"Could no longer meet my duties" + pancreatic cancer = a strong chance that the doctors gave him a number of how long he had left to live, and it wasn't it years.
(That doesn't mean that Jobs can't beat the odds, of course!)
That said, when the market dips, buy, buy, buy.