You don't usually see a stock gain 4 percent on news that the CEO is ill, but that's exactly what happened to Apple this week. As we all know by now, Apple CEO Steve Jobs disclosed that he is being treated for a hormone imbalance that caused his obvious weight loss. Anyone familiar with Wall Street's often twisted logic knows that the stock bounced because the news wasn't worse. After all, there have been plenty of rumors that Jobs is suffering a recurrence of pancreatic cancer and may have to leave the company.
I'm glad that Jobs isn't sicker. But sooner or later, he will leave Apple, and it may occur in 2009. What will happen? The stock will tank, no matter how the news is spun. Many investors are convinced that Jobs is Apple and Apple is Jobs.
But Wall Street has it wrong.
The company will be just fine without him. Partly through the genius of Jobs and the team he built, and partly because his tenure coincides with the industry-wide shift away from proprietary computing dominated by Microsoft, Apple will remain an important and successful force in the technology industry.
Not your father's Apple
When Jobs rejoined Apple in 1997, the company was headed for the recycle bin. It remained stuck in a customer niche of graphics-oriented users and Microsoft-hating fanboys. It was even in danger of losing its hold on the education market.
In part, that sad state of affairs was due to unimaginative management by COO-turned-CEO Michael Spindler and then CEO Gil Amelio, a technology executive who understood chips -- he ran National Semiconductor for five years -- a lot better than he understood consumers.
Those two followed the chaotic reign of John Sculley, whose marketing savvy from his tenure at the disciplined PepsiCo didn't translate well at undisciplined Apple, resulting in a chaotic product line that confused customers and spread Apple's strengths too thin. Engineers' pet projects ran amok, leading to lots of half-baked technologies and a confused direction for the Mac. (Ironically, the Sculley-era chaos led Apple's board to choose first Spindler and then Amelio as more focused technocrats in a pendulum swing gone too far.)
But in a larger sense, the company appeared doomed because such strengths as it had (a knack for design and a computer that was easy to use and didn't crash every 10 minutes) were at odds with the industry's demands.
As computer technology really took hold in the 1980s and 1990s, business wanted standard products and standard software at a relatively low price point. Apple didn't offer that.
Because the company controlled the platform, its products weren't plagued by the panoply of incompatibilities familiar to Windows users. But because its control of the platform was so tight, it hadn't developed the huge ecosystem that made Windows products ubiquitous.
When it did try to loosen the reins with its move to more generic technology and its licensing of the Mac to clone makers to compete with the likes of Dell, Apple found its unimaginative, often cheaply made systems developed under Spindler and Amelio losing against both Windows PCs and its own Mac licensees.
Jobs, of course, changed all that. When he forced out Amelio and returned to the helm at Apple, he killed the clone experiment and put Apple back on the path of building iconic computers, with the candy-colored iMacs leading the charge. Today, the Mac has regained its lost market share and is now a serious option in many businesses.
But Jobs did more than return to Apple's iconoclastic roots. He was the first major technology executive to see the link between digital media and the Internet. Apple was always considered cool, but iTunes and the iPod became the essential accessory for the young and the hip. And now the iPhone has remade the very idea of a mobile device. None of that will change when he leaves.
The iPhone is not only amazingly popular, it is spawning a growing ecosystem of developers writing great mobile applications. Ultimately, people buy technology products to get something done, whether it is work or entertainment, and that's why the developers are so crucial.
Meanwhile, the rise of open source software as a service and cloud computing are changing the way technology is used and the way it is sold. A Web-centric world can not be dominated by Microsoft, or any other single company. That won't change when Jobs leaves.
Needed: a succession plan and a return to Macworld Expo
Still, there are two areas that worry me. The first is the lack of a clear-cut succession plan. That needs to be fixed ASAP. Even if Jobs' explanation for his health issues quiets them for now, investors remain worried. Moreover, having clear succession plans is what well-run companies do. So why doesn't Apple have one?
Apple has a strong bench of executives, including Jonathan Ive, an Apple senior vice president who oversees the company's industrial design team, and Scott Forstall, leader of the team responsible for the iPhone's operating system and other software -- all the more reason to remove the doubt.
It also follows that Jobs and Apple need to be more forthcoming about his health issues as they develop. Sure, that's an invasion of his privacy, but as CEO of a public company whose stock price is tied to his presence, that right takes a backseat to the interests of his investors and employees.
I think that's a mistake. Although mega trade shows are much less useful than they were 10 years ago (does anyone miss Comdex?), Apple's ecosystem of smaller developers needs a major venue.
The show could go on without Apple (and its organizers say it will) but Macworld Expo without Apple is like a circus without the trapeze artists; it won't fly for long. Without it, developers will have a much tougher time getting the kind of exposure needed to build volume for their products. Sure, there are other venues, but none has the heft and cachet of Macworld Expo.
Ultimately, that hurts Apple.
In any case, the technology game has changed immensely in the last 10 years. With or without Steve Jobs, Apple will continue to be the most innovative computer company around.
(Two disclosures: A division of InfoWorld's parent company IDG runs Macworld Expo, and I own a small number of shares in Apple.)
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