The news crossed the business wires at 6:34 p.m. today: Steve Jobs is resigning from Apple (Nasdaq: AAPL ) . The resignation letter was brief and offered little additional explanation:
To the Apple Board of Directors and the Apple Community:
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.
While a specific reason for his resignation wasn't given, the most likely culprit is his continuing health battles. In January of this year, Jobs took another leave of absence to focus on his health. It wasn't the first time Jobs had medical problems; an earlier medical leave in 2009 was later revealed to be related to a liver transplant. Since that time, rumors have swirled as to the severity of his medical situation, but the resignation today confirms Jobs' health is bad enough that he no longer feels capable of serving as CEO.
Of course, the question from investors now turns to who will run Apple. Apple's rise to becoming the world's largest company has been breathtaking. The chart below shows the speed with which Apple caught up to not only technology king Microsoft (Nasdaq: MSFT ) , but later even ExxonMobil (NYSE: XOM ) to become the world's largest company.
Source: Capital IQ, a division of Standard & Poor's.
Apple will be left in capable hands. Steve Jobs' request that Tim Cook lead the company isn't unexpected. Cook has served as COO since 2007 and has long been lauded for his ability to manage Apple's booming supply chain. Cook's organizational expertise is well-enough regarded that AMD (NYSE: AMD ) tried tapping him to lead the company recently. Not surprisingly, he turned this position down.
However, Cook has long been thought of as only a piece of a triumvirate that worked behind the scenes to ensure Steve Jobs' visions made it to market and were commercial blockbusters. The other two members of the triumvirate are Jonthan Ive and Phil Schiller. Ive is the principal designer at Apple, and has been responsible for the design of every hit product since Apple began its meteoric rise at the start of the last decade. Schiller is the company's marketing leader and is credited with helping establish the unique brand identity of Apple products.
When Cook becomes the new leader, he'll lean heavily on these other figures. Also, while Jobs will no longer be CEO, as chairman of the board, his influence still will be widely felt within the walls of Apple's Cupertino headquarters.
Still, it can't be stressed enough that while other executives at the company are rare talents, replacing the vision of Steve Jobs will be a challenge. The existing management should be well-suited to shepherding already-successful product lines like the iPhone and iPad to continued growth. Ive can continue designing great next-generation products while Cook worries about the operational side and plots how Apple attacks new market opportunities for those products (such as additional distribution in China).
Apple also faces enormous challenges and opportunities in the coming years. Android has aggressively stolen market share in the mobile market and Apple will need to continue defending its turf. Apple still commands nearly two-thirds of total mobile profits -- i.e., the important thing -- but mobile challenges will continue to evolve and grow. For example, Google (Nasdaq: GOOG ) recently announced its intention to acquire Motorola Mobility (NYSE: MMI ) and aims to get more aggressive in marketing its own hardware. There are also reports that Amazon.com (Nasdaq: AMZN ) plans on releasing a tablet at a very competitive price point.
On the opportunities side, Apple not only has massive growth in front of it in emerging markets -- sales to China grew sixfold last quarter -- but can also look to expanding its offerings to new areas. An obvious idea would be a new Apple TV box -- or even an Apple-branded TV itself -- that would bring apps and Apple's media ecosystem further into the living room.
While it'll never be easy seeing a visionary leader like Jobs go, Apple has strong momentum in its existing categories and its biggest trial in the years ahead looks to be how best to leverage and expand iOS into new markets and new categories. Steve Jobs' day-to-day presence at Apple will be missed, but the company has become much more than the Great Turtlenecked One.
To keep tabs on how the post-Steve-Jobs Apple moves into the future, make sure to add the company to our free My Watchlist feature. It'll deliver up-to-date news and analysis as the company navigates these critical times.
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