Jobs to take leave of absence until June
Apple CEO Steve Jobs told employees that he will be taking a leave of absence until June to deal with lingering health issues. Chief operating officer Tim Cook will handle day-to-day operations in Jobs’ absence.
Jobs informed employees of his decision in an e-mail sent Wednesday.
“Unfortunately, the curiosity over my personal health continues to be a distraction not only for me and my family, but everyone else at Apple as well,” Jobs told employees. “In addition, during the past week I have learned that my health-related issues are more complex than I originally thought.”
Wednesday’s announcement comes a little more than a week after Jobs released a statement revealing that he was dealing with a “hormone imbalance” that had affected his health, including causing him to lose weight through last year. At the time, Jobs said that the treatment required to combat the condition would be ongoing over the next few months, but that he would inform the board of directors if he felt he could no longer fulfill his duties as CEO.
Jobs told employees in his Wednesday e-mail that a leave of absence would allow him to “take myself out of the limelight and focus on my health, and to allow everyone at Apple to focus on delivering extraordinary products.”
Though Cook will handle day-to-day operations, Jobs said he would remain involved in “major strategic decisions” throughout his absence.
“Obviously it’s tough news for Apple because it won’t have Steve’s leadership, but I don’t think it will have that much of an impact or disruption on Apple in the short term,” said Tim Bajarin, president of consulting firm Creative Strategies.
Bajarin also noted that Apple has a solid leadership team in place. “All of the products Apple has been working on that will be released in the next 18 months are already cast in stone and were developed with Steve’s leadership and direction,” he added.
Michael Gartenberg, vice president at Jupitermedia, agreed that Apple's product development would be unlikely to be hampered by Jobs' absence from the company he co-founded three decades ago. “As much as we identify Steve with Apple, he doesn’t sit in the garage at night and bring these products to market on his own. I don’t think we will see much of an impact,” Gartenberg said.“ Apple is in good hands in terms of its day to day operations.”
But Roger Kay, president of Endpoint Technologies Associates, said Jobs’ absence would be notable. “Steve Jobs is more critical to Apple’s operations than most CEOs are. Arguably he embodies Apple. He is Apple,” Kay said.
In addition to his value as an innovator and a “tremendous motivator,” Jobs’ skills at negotiating with companies have been invaluable for Apple in the past few years, said Andy Hargreaves, an analyst with Pacific Crest Securities.
“Convincing a company like AT&T to partner with Apple on a product unseen, convincing the music industry that this is the wave of the future and they have to get on board” were both significant accomplishments, he said.
Jobs is a cancer survivor, having been treated for a rare form of pancreatic cancer in 2004. During that time, he also stepped down from his day-to-day CEO role, with Cook taking over his duties.
“The last time this happened Cook did just fine, and there is no reason to think he won’t do fine again,” Gartenberg said.
Cook is thought to be a good choice to run the company during Jobs’ absence, although Kay said that he’s not the person who will develop Apple’s next iconic product.
“Tim Cook’s the guy who makes the trains run on time. He’s not the creative genius,” Kay said. “Even though in some sense he is an excellent manager and is the backstop for Steve … that’s not going to do anything except make the trains run on time. That’s not going to decide what the train should look like in five years.”
Still, Jobs’ absence is unlikely to affect short-term product plans, which will already have been decided, Kay noted.
Rumors had circulated about the Apple CEO’s health for much of 2008, especially after Jobs looked gaunt during several public appearances. For the most part, Apple declined to comment on the rumors, with the company adamant that Jobs’ health was a private matter. Jobs, however, did make light of the situation at Apple’s September iPod unveiling, opening his presentation with a slide reading “The reports of my death have been greatly exaggerated.”
Apple’s stock price has fluctuated wildly on any reports regarding the health of its CEO. After a December Web report claimed that Jobs’ health was “rapidly declining,” for example, Apple shares fell as much 2 percent.
On Wednesday, Apple’s shares closed down at $85.33, down 2.71 percent on the day. While trading was suspended for Apple’s announcement, shares had dropped in after hours trading by as much as 7.8 percent as of 2:30 p.m. PT.
“Wall Street has been asking for honesty from Apple and they’re getting it,” Bajarin said.
Updated at 2:17 p.m. PT to add more background detail on the announcement.
Updated at 2:30 p.m. PT to add comments from analyst Tim Bajarin.
Updated at 3:33 p.m. PT to add comments from Michael Gartenberg.
Updated at 5:05 p.m. PT to add comments from Roger Kay and Andy Hargreaves, provided from IDG News Service.
Jim Dalrymple of Macworld.com and Nancy Gohring, Agam Shah, and James Niccolai of IDG News Service contributed to this report.