Steve Jobs announced late Wednesday that he would be stepping down from his position as chief executive of Apple (NASDAQ:AAPL), effective immediately, and would be replaced by his longtime number two, chief operating officer Tim Cook. Will Apple maintain its reign over technology? Or is this a window of opportunity for key competitors such as Google (NASDAQ:GOOG), Microsoft (NASDAQ:MSFT), Research in Motion (NASDAQ:RIMM), Nokia (NYSE:NOK) and Samsung?
As the Apple (NASDAQ:AAPL) co-founder steps down from one of the most valuable companies in the world, investors are sure to be worried about the future of the company, and that may be reflected in Apple’s share price, which began its descent Wednesday in after-hours trading and continued this morning in pre-market. But Jobs’ resignation should come as no real surprise, as he was diagnosed with pancreatic cancer many years ago and has been on leave since January.
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Investors should be relieved to find that a succession plan is in place. The plan, which until now was kept mostly confidential, was thought by many not to exist, a matter of great concern to shareholders with knowledge of Jobs’ illness. But sure enough, on the last page of Apple’s Corporate Governance Guidelines, the company designates its compensation committee, a subset of the company’s board of directors, as the body responsible for succession planning.
Jobs’ successor will be COO Tim Cook, who was appointed Jobs’ number two back in 2005, and has since been responsible for running Apple (NASDAQ:AAPL) day to day, working in his position since Apple shares were trading at $54, only a seventh of their current price. Since Cook came on in 2005, Apple has become the one to beat, the trendsetter, creating technology around which the industry revolves. With the best-selling desktops, notebooks, mp3 players, tablets, and smartphones, Apple is unlikely to fall apart just because Jobs is no longer its chief executive.
Furthermore, given the company’s long-term vision, it is likely that Apple (NASDAQ:AAPL) already has the next five years mapped out with products already in development. In fact, Jobs’ exit might be seen as a sign that Apple soon has a new product to offer consumers that will offset the negative impact of his departure. Considering Jobs’ long-standing illness, and the fact that he has been on leave for most of the year, one wonders whether the announcement of his resignation was not strategically planned for the moment when it would have the least negative impact.
Though beginning his reign as Apple’s (NASDAQ:AAPL) new chief executive today, Cook has long been responsible for the company, credited with running its intricate teams of designers, engineers, and programmers, and acting as CEO during Jobs’ many medical leaves of absence. Apple board member Art Levinsons says, “The board has complete confidence that Tim is the right person to be our next CEO.”
But some worry that, without Jobs’ vision, the company will soon spoil. However, the Apple (NASDAQ:AAPL) is known for mapping out its products several years in advance, and Apple always has many new technologies at different stages of production, allowing the company to present various new products every year in order to keep relevant. Plus, while Jobs may be largely responsible for Apple’s success, Apple’s engineers, designers, and programmers must also be credited with the company’s success. “While this marks the end of an era for Apple, I think it’s important to remember that there’s more to Apple than any one person, even Steve Jobs,” said Michael Gartenberg, an analyst at Gartner.
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Still, Jobs was responsible for bringing Apple (NASDAQ:AAPL) back from the brink of collapse in 1997 when he was asked to come back to the company twelve years after he left over a brutal battle for control with other executives. He is no doubt responsible for many of the visions that, once they came to fruition, revolutionized the industry while creating the new standard. But staying on as chairman of the board, Jobs is sure to continue to be an important player in Apple’s future success.