Last week, Apple Inc. announced that Steve Jobs, the company's CEO, chairman, co-founder, public face and all-around head guru, will be taking a leave of absence through June 2009 for health reasons. This would be major news even if Fortune hadn't named Apple the most admired American company of 2008; as it is, it's practically seismic in the tech world.
Over the past year, Jobs has visibly lost weight, and people have been speculating since the summer that he might have a serious illness. Jobs was treated for pancreatic cancer in 2004, at which time doctors removed much of his pancreas. His recent announcement has heightened speculation about what illness Jobs may or may not have; it's also made a cottage industry of people trying to guess what Apple's next move will be. The company was Jobsless once before, from 1985 to 1997, and many regard this as having been a particularly aimless period for the Apple brand.
More than any other single person, Jobs is credited as the genius behind Apple's hip products, slick, intuitive designs and aggressive marketing charges, and many investors are chilled by the prospect of the company without him. The unease extends to loyal Apple customers, some of whom are worried that the company's polish will dull. These fears may not be totally groundless: Jobs's earlier 12-year absence from Apple was turbulent for the company, and his return was followed closely by the iMac, the iPod, a lucrative partnership with Microsoft, and a general renaissance for the Apple name.
Today the company is a hardware and entertainment giant, a status further solidified by last year's launch of the iPhone. Jobs's prestige is pegged directly to Apple's, and no stockholder or loyal customer wants to see that prestige diminished.
What's wrong with Jobs
Unable to disguise his weight loss, and amidst rampant speculation about his health, Jobs addressed his situation earlier this month, issuing a public statement in which he attributed the condition to a "hormone imbalance that has been 'robbing' me of the proteins my body needs to be healthy." The statement said, "The remedy for this nutritional problem is relatively simple and straightforward, and I've already begun treatment."
In a New York Times article reporting the statement, a pancreatic cancer specialist, Dr. Richard M. Goldberg, told the Times that Jobs's stated problem can be a side effect of a reduced-sized pancreas. The condition is treatable with enzymes, taken regularly for life.
The short term
Jobs and the Apple board have appointed Tim Cook, the company's chief operating officer, to take charge while Jobs rests and regains his health. Cook took over the company for two months in 2004, following Jobs's pancreatic cancer surgery.
Apple has historically afforded a long gestation period for its new products and designs, so any product launches or refreshes scheduled for 2009 are probably already well underway. In his departure announcement, Jobs said he plans to "remain involved in major strategic decisions" during his respite. That will include product conception and design, his major visionary strengths.
Assuming Jobs' healthy return in June, Apple should suffer few, if any, consequences from his leave. But it's far from clear whether Jobs will be able to get back to work in June, or indeed if he will ever return.
The long term
For better or for worse, Jobs is widely thought of as the heart and soul of Apple. In the late eighties and through most of the nineties, while Jobs was pursuing other things, the company's scattered successes (most notably the PowerBook, introduced in 1991) were largely eclipsed by several high-visibility failures, most famously the Newton, an early PDA. Meanwhile, Apple saw significant market share slip away in desktop computer sales, a market cornered by the IBM/Microsoft collective juggernaut.
When Jobs returned in 1997 with Apple's purchase of his new venture, NeXT, the board named him CEO shortly thereafter. Within a few years, Apple released the excellent OSX, based on Jobs' NeXTSTEP operating system; the iMac followed close behind, and Apple has been on a rising trajectory ever since.
Because of Jobs's reputation as a guru and the unpromising precedent of an Apple Inc. without his guidance, it would rock the tech world on its axis if he were ever to declare himself unable to return to active duty. Tim Cook is no doubt a qualified and competent corporate leader, but to many Apple watchers, invested and not invested, there is no substitute or replacement for Steve Jobs. There is no plan B.
Legal issues
Since Jobs's announcement, there's been a good deal of speculation about the legality of how he and Apple are handling the situation. Has the company been forthcoming about Jobs's condition? Ever since the iPhone 3G launch this past summer, where Jobs's weight loss was strikingly apparent, rumors have swirled about the CEO's health. The official announcement didn't come until January 5, and many found it most notable for what it didn't say. What did Apple know, and when did it know it?
Various sources indicate that there is no firm legal requirement to report managerial health issues, but the accepted practice and expectation is to do so. A Bloomberg article on the Jobs situation quotes the lawyer Mark Molumphy, who led a previous investor suit against Apple, as saying, "Someone would probably have a good argument that this information is material. The hard part would be to show that the board or company officers withheld information on his true health condition. How do you prove what his true health condition is?"
Is Jobs Apple, and Apple Jobs?
Few large companies are so closely associated with one person as Apple is with Jobs. Microsoft, Apple's historical rival, comes immediately to mind; chairman and founder Bill Gates enjoys a comparable level of adulation and awe. That's about it, though.
Gates, who remains at Microsoft as a non-executive chairman, has essentially checked out of the company, yet business continues apace. However, Jobs is probably more central to the ongoing success of Apple than Gates was to Microsoft. Everyone wishes Jobs well and looks forward to his return. If that doesn't happen, though, there may be some interesting times ahead for Apple.
