Rumors of Apple’s Decline Are Greatly Exaggerated (Probably) … (for Now, at Least)
Photo by Matt Buchanan
EDIT 10/17/11: This is a sad edit. As you and indeed much of the rest of the world are aware, Steve Jobs passed away on October 5. After battling cancer for years, he announced his resignation from the position of CEO of Apple, Inc., on August, 24. A private memorial service was held yesterday, October 16, at Stanford Memorial Church. In attendance were former President Bill Clinton, Microsoft Chairman Bill Gates, Google CEO Larry Page, and Adobe co-founders John Warnock and Chuck Geschke, among others. Apple now begins the post-Jobs era. See my original post below for what I think will happen to Apple in the future.
What is Apple without Steve Jobs?
Steve Jobs is visionary. After spending countless hours in business classes, I know this. When you choose an adjective to describe Steve Jobs, “visionary” is the one you go for. Tim Cook is not Steve Jobs. To his credit, he has been running the show for several years. Probably more than anyone thinks—after joining Apple in 1998, he rose to the position of COO in 2007, where he’s been groomed to take over the mantle of CEO. After serving as the chief executive in place of Steve Jobs on three separate occasions, he was promoted on August 24 when Steve stepped down.
There will never be another Steve Jobs
Tim’s due a lot of the credit to Apple’s success, but Steve Jobs is who got them to where they are today, with AAPL trading around $380 as of the day this post was written. However, Apple will still make cool iStuff after Jobs. They’ve done it without him before, and they will do it without him again. I am reminded of the Cuban Missile Crisis—JFK and Soviet Premier Khrushchev playing nuclear brinkmanship in the 1960s. A professor once pointed out that JFK wasn’t the smartest man at the table, but what he was good at was surrounding himself with the smartest people. Yes, ultimately the buck stopped with JFK/Steve Jobs, but they both had an all-star team of advisors to work with. In Steve Jobs’ case: Scott Forstall, the iOS pioneer; Jonny Ive, designer extraordinaire; Ron Johnson, mastermind of the Apple retail store (who is departing to head up JC Penney in November); Bob Mansfield, the hardware guy; and, Phil Schiller, who could sell you the shirt off your back.
But still, Steve Jobs is not only an industry legend, but a household name. With him gone, what will happen to Apple in the future?
What are Apple’s threats?
I was recently invited to attend a talk by a Morgan Keegan analyst who specializes in, of all things, Apple. He said Apple’s main threat is if people stop buying Apple products (duh). Next, there’s Google, who just bought half of Motorola. Perhaps there’s a true successor to the Nexus One somewhere in that acquisition (the first “Google Phone”). Once Microsoft-Nokia pays enough developers to create apps, they will become a legitimate competitor with Windows Phone 8. Finally, the analyst said Samsung/RIM would make a good combination (RIM’s new QNX OS is great and Samsung has significant wherewithal). Another problem is that Apple could now face a shortage of engineering talent. With Steve Jobs at the helm, engineers would flock to Cupertino just to say that they had worked with him. Now, Apple will have to duke it out with other tech giants—Google, Microsoft, et al.—to hire the best engineers. He described the mentality as that of a “mercenary”: an engineer who works for a couple years at a company, jumps ship to a start-up in hopes of striking it rich off of an IPO, and then coming back to work at a more established firm.
iDivination
The bottom line is that no one knows how Apple will fare without Steve Jobs. In the near term, Apple will be the same as if Steve were still the CEO (product lifecycles are multi-year; for instance, iPhone 5 development probably started at least two years ago). The real challenge will be when new products are developed. Will Tim Cook have the intestinal fortitude to say “no” to an iWidget that he thinks won’t work? Will the stockholders have the same confidence in Tim as they did in Steve? Predicting a slow erosion that could take years to dismantle the world’s most valuable company, the analysts suggest that if anything, Apple won’t go out with a bang, but with a whimper.
What do you think?
