Steve Jobs loss worries investors
There are as many questions as answers about Apple’s fate without CEO Steve Jobs. It seems that most investors are very nervous about the prospects.
The announcement that Jobs would be stepping down as Apple CEO for six months because his health problems were worse than he originally thought is still reverberating in financial circles. Jobs will be replaced between now and June by chief operating officer Tim Cook, an Apple veteran. Although Cook is highly respected, he is apparently not seen as an adequate replacement for Steve Jobs. Right now, perhaps no one can be seen in that way.
It looks as if many in the financial community see things in just that way. The reaction to Jobs’ leave of absence, and to the inevitable rumors that he will not be coming back at all, have been almost universally negative. As one example, Mike Abramsky, of RBC Capital Markets, reported in Marketwatch said “Jobs is widely viewed as Apple’s chief innovator, dealmaker, [and] leader. Being sidelined for six months or more and unavailable day-to-day, with no clear successor, in our view raises risks to Apple’s sustaining its stellar record of innovation going forward.”
Similar sentiments are echoed by former Apple insiders. A previous Apple chief scientist, Stephen G. Perlman, was quoted by the New York Times as saying, “Steve is terrific at attracting and retaining people, creating an agenda and getting people to stick to it. It’s very hard to find somebody who is so credible, and who has such a strong following that he is able to cut through corporate politics. … The whole world is concerned about Apple. I’m concerned about Silicon Valley. I need Apple to be harrying Microsoft. We need someone stirring the pot. God forbid that there is no one stirring the pot anymore. We’ll become Detroit.”
Not all investors speak as one, of course. Kaufman Brothers analyst Shaw Wu, quoted by Reuters, said, “The fact of the matter is that Apple has become an institution, a culture, that transcends more than one individual. We think the stock is pretty attractive here. A lot of bad news is priced in. It’s trading at 10 times 2009 free cash flow. If you factor in their cash, which is $27 a share, or $25 billion, the stock is trading at only 6.5 times. That’s very attractive.”
Reading the news relative to the issue, the consensus seems to be that Jobs will be missed internally and externally, both as a leader and a spokesperson. Whether he is gone six months or forever, he will be missed and will become one with the legend of Apple. There will certainly be problems and changes internally as things settle into a new corporate geography.
Still, Apple is much more than the man that has been leading it. They have become strong in so many ways, it is difficult to see how the loss of one person could stop them in their tracks. Apple will go on, but will it continue to innovate and astound without Steve Jobs? That is the key question and only time will answer it.
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January 16th, 2009
Unless a Netbook or some other market changing product is forthcoming it’ll be tough because he kept the expectations so high. iPod to IntelMac to iPhone to recession?
January 17th, 2009
If I owned Mac shares, I would be very worried. The problem with building a company around a guru (or allowing a guru to build a company around themselves) is that one day the guru is no more. And what happens then? Even if Jobs makes a full recovery, he might start wondering whether running Apple is worth all of the stress. No point being rich if you’re dead.