In a typically terse letter to the Apple board and the "Apple Community" late Wednesday, CEO Steve Jobs sent a shock wave through the computer industry: "I hereby resign as CEO of Apple."
Apple’s board promptly adopted the two recommendations he made in the brief eight-sentence letter: to name Jobs as board chairman and to "execute our succession plan and name Tim Cook as CEO of Apple." Cook has been the company's long-serving COO and has three times served as acting CEO since 2004. In each case, Jobs took a leave of absence for health reasons.
In his letter, Jobs wrote "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." The vague comment is sure to re-ignite intense speculation on Jobs' health. In January of this year, Jobs took medical leave to "focus on my health." Characteristically, his bare-bones, six-sentence statement then gave no details of the health issues prompting the decision.
And neither Jobs' letterhttp://www.asymco.com/2011/07/26/apple-has-moved-on/ nor Apple's official statement even hinted at why "that day has come."
Cook's new role as CEO is unsurprising, given the confidence that the board of directors and Jobs have had in naming him acting CEO in the past. Jobs' letter clearly suggests that the board had a succession plan in place, with Cook as the number one pick for the number one post.
He has been with Apple for over a decade, and is well regarded inside and outside the company.
"Tim Cook proved he can lead Apple and from a product line perspective. Apple is likely covered for the next couple of years at least as far as big picture and direction," says Carolina Milanesi, research vice president of Consumer Technologies & Markets, for Gartner. "Tim has done well during Steve's leaves of absence and, although he might not have Steve's charisma, I argue [that] nobody does. Tim has the support of the board and the trust of the employees."
Yet Apple is intimately and indelibly associated with Steve Jobs. "Steve Jobs is the iconic leader and visionary at Apple," says Rajeev Chand, director of research, wireless, at Rutberg & Co., an investment bank in San Francisco. "Decisions at Apple are made by Steve Jobs, and the agenda is highly successfully driven by Steve Jobs. It is difficult to predict how Apple will change with the CEO succession, but it is likely that things will change."
It's hard to imagine them changing more than they have in the past five years. With the introduction of the iPhone in 2007, the companion iPod touch, and in 2010 the first iPad, Apple re-invented itself as the "post-PC company" par excellence. [See "Apple's greatest hits under Steve Jobs:12 noteworthy innovations rolled out under Jobs' leadership at Apple"]
The company's record revenues and profits now are driven by products, based on its iOS mobile operating system, that didn't exist five years ago, according to an analysis by Horace Dediu, founder of market intelligence firm Asymco. He captures the dramatic shift in a chart.
In Q2, in the smartphone market alone, Apple captured nearly two-thirds of all profits, according to another analysis by Dediu.
Jobs' decision to relinquish the CEO post is a milestone in one of the most personal and corporate turnarounds in modern American business. A co-founder of Apple, Jobs eventually brought in an experienced executive, John Sculley, to be Apple's president and CEO. But by 1985, frictions between the two erupted and Jobs was ousted. He launched Next Computer, and bought Pixar Animation from George Lucas. A decade later, in the mid-1990's, Jobs returned to Apple when it bought Next, and he was named interim CEO a year later, at a time when many were predicting Apple's impending doom.
Jobs introduced the iPod in 2000, iTunes two years later. He unveiled the iPhone in early 2007 and when it was released in June of that year it almost overnight redefined what smartphone could and would do.
The company is widely expected to introduce the fifth iPhone this September or October.
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