What Jobs's departure means for the mobile industry
The iPhone. The iPad. Both iconic Apple products have soared in global popularity. Both have led to a mobile computing movement started, arguably, when the iPhone first appeared in 2007.
Perhaps it is more properly called a minor revolution that has forced the public to question its reliance on desktop and laptop computers. Both products had Steve Jobs as the motivating spark behind their development.
Now that he has resigned as CEO, probably due to lingering health concerns, can his fire still burn inside Apple’s engineers, designers and marketers? Jobs stays on as Apple’s board chairman, with former chief operating officer Tim Cook installed as CEO. But is that enough to keep Apple on top with alluring new product designs and technology marvels, much less the business savvy to work with carriers and manufacturers globally?
“His departure will affect parts of the [mobile computing] industry dramatically,” independent analyst Jeffrey Kagan said in an email. “Remember, it was Apple that was the leader in changing the music business [with iTunes], the smartphone business, and Apple invented the [touchscreen] tablet computer business. Much of that came from Steve Jobs’ vision.”
Magical products from a magic maker
Many will recall that Apple is the company whose CEO called the iPad “magical” in January 2010. The touchpad device has easily captured the global media tablet market, with more than a 70% share, according to IDC.
What perhaps best captures Jobs’ impact on Apple, and his imprint on the entire mobile computing industry, is the way he put everything together in a company: brilliant marketing, combined with the ability to find creative managers and designers to do all the heavy lifting.
The first-generation touchscreen iPhone was inspired in its design and software function, but Jobs clearly understood the need to sell the device around the globe. Setting up manufacturing, marketing and business agreements with hundreds of global carriers (most speaking different languages) is plain hard work, and it takes a capable manager to find the right people and keep the effort thriving.
Analysts noted that it took Research in Motion more than a decade to set up the global carrier agreements to sell BlackBerry smartphones that Jobs and Apple were able to put in place in less than half the time.
Leveraging the powerful carriers
In 2007, Jobs was especially shrewd in negotiating with powerful carriers around the world to provide wireless service for the iPhone. Jobs and his team initially set up an exclusive iPhone deal with AT&T that took advantage of the carrier’s universal GSM network (useful for later expansion of the iPhone abroad), while forcing CDMA provider and staunch competitor Verizon Wireless (and lesser competitor Sprint) to sweat it out for years. Verizon finally got a CDMA iPhone 4 in February, while Sprint is reportedly getting an iPhone in the fall.
“Jobs changed the way that phone makers interact with carriers,” Kagan noted. “Before the iPhone, carriers ruled. Now, Apple and Google rule.”
No big opportunity for Apple rivals
Five industry analysts interviewed after the Jobs resignation mostly said Jobs and Cook, his successor, can continue to inspire and motivate the Apple team during this transition period and beyond. They also said the near-term won’t necessarily be a time for Google, Android manufacturers and Android developers to seize the market advantage. Much the same view was held about Microsoft with its big ambitions but tiny market share with Windows Phone mobile operating system and its prospects for Windows 8 on tablets.
Research in Motion might have the most to gain from a leadership shift at Apple, because with its latest innovations to the Blackberry, especially the upcoming QNX OS. RIM’s smartphones and its PlayBook tablet have struggled to compete with the iPhone, the iPad, and Android products, and the Blackberry maker has lost some of its vaunted smartphone market share which was first focused on business users, analysts noted.
“Competitors who think they can exploit Jobs’ departure … are making a mistake,” said Gartner analyst Michael Gartenberg in an email. “Apple’s design team is unparalleled in the industry and will likely continue thriving under the leadership of Jonathan Ive,” Apple’s senior vice president of industrial design.
Apple’s iPhone, iPad brain trust continues
Ive was described by BusinessWeek in 2006 as the “man behind Apple’s design magic.” He and Scott Forstall, senior vice president of iOS software (the operating system for the iPhone and iPad), have often appeared onstage with Jobs to introduce a next-generation iPhone or iPad. They are sometimes referred to as the brain trust behind the iPad and iPhone. The real question for Apple is how well they will work together with Cook at the helm, some analysts said.
However, Jack Gold, an analyst at J. Gold Associates, said he doesn’t believe there’s “any real change that will result from the departure of Jobs. He has set up the teams and staffed them with people who know how to move forward … Cook has a record of being able to run the company.”
Gold said makers of the Android platform, Windows Phone, BlackBerry and others “have an opportunity to catch up, but I don’t think that would be directly related to Jobs’ leaving.”
Gold wished Jobs good health, and said he hoped he can stay as chairman a long while to keep inspiring the company.
“CEO transitions for founders are fairly common,” he said. “Strong personalities move on. Some seem to have little effect on the company’s market position and some don’t. In the case of Apple, Jobs has set up a mechanism that allows Apple to move forward without him at the helm day to day.”
Carolina Milanesi, a Gartner analyst based in Europe, also said she saw little impact from the Jobs’ departure as CEO. “As far as I’m concerned, tomorrow will be business as usual in Cupertino. Apple continues to be the benchmark,” she said. “Competitors will be foolish to think that they can take advantage of any momentary loss of direction.”
She added: “There is no question that Steve’s charisma will be hard, if not impossible, to replace, but there is more to Apple than Steve Jobs as far as product design, planning and execution.”
Kagan, the independent analyst, said even though Jobs has been a key ingredient behind the iPhone and iPad, the entire company has had years to prepare for his departure, since the time Jobs was first diagnosed with cancer in 2004.
“If Jobs resigned six years ago, his departure would have been an earthquake,” Kagan said. “This time, they have been preparing, so it may just be a tremor.”
Still, it is easy to wonder what could happen, Kagan said. “Steve Jobs drove much of the change in the mobile industry,” Kagan said. “What could have changed that won’t change now, going forward? Good question. We may never know.”