Move fails to dent investor confidence in Apple

APPLE began a new era yesterday without Steve Jobs as chief executive, a momentous shift that surprised investors but barely dented confidence in the near-term outlook for the stock.

In announcing that he could no longer fulfil his duties, Jobs stepped away as chief executive and cleared the way for Tim Cook to take over leadership of one of the world’s best known and valuable companies.

Cook, 50, must convince investors that Jobs’s vision and spirit have been institutionalised within Apple, a company that revolutionised entertainment and communication with its iPod, iPad and iPhone devices. Jobs, who has been on medical leave since January, will stay on as chairman.

“Investors are coming to the realisation that this is a natural transition. It may have already been built into Apple’s valuation,” said Hendi Susanto, a Gabelli & Co analyst.

Apple’s shares were down less than 2% in early trading yesterday, showing more resilience than when the departure was initially announced late on Wednesday.

“Over the course of last year, investors have become more comfortable with the idea of life after Jobs,” said Bill Kreher, an analyst with Edward Jones. “I think it is encouraging that he will remain with the company as chairman but the real story is that Tim Cook has emerged as a capable successor.”

Jobs, who has fought a rare form of pancreatic cancer, is deemed the heart and soul of a company that became the most valuable in the world for a brief period this year.

“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,” Jobs wrote in a brief letter announcing his resignation.

While it is unlikely that his departure as chief executive will derail Apple’s ambitious product-launch roadmap in the near term, there are concerns about whether the company will be as creative without its founder and visionary at the helm.

Jobs’s battle with pancreatic cancer, which has stretched over several years, has been of deep concern to Apple fans, investors and the company’s board.

Over the past two years, even board members have confided to friends their concern that Jobs, in his quest for privacy, was not being forthcoming with directors about the true condition of his health.

Wall Street also wanted a clearer picture of plans at Apple.

“I think a lack of clarity of its succession plan in the past has been a distraction so we appreciate that this plan represents a smooth and orderly transition,” Kreher said.

Jobs had briefly emerged from his medical leave in March to unveil the latest version of the iPad and later to attend a dinner hosted by President Barack Obama for technology leaders in Silicon Valley.

One Silicon Valley chief executive, who declined to be identified, said the tone of Jobs’s statement indicated his health may be worse than feared.

The Apple chieftain has earned a reputation for commanding every aspect of operations — from day-to-day running to broad strategic decisions — suggesting he would not give up the job if he had a choice.

“It’s really sad,” the chief executive said. “No one is looking at this as a business thing, but as a human thing.

“No one thinks that Steve is just stepping aside because he just doesn’t want to be CEO of Apple anymore.”