Steve Jobs has resigned as CEO of Apple almost certainly as a result of deteriorating health, closing the book on one of the most successful and iconic leadership stints in U.S. corporate history.
The 56-year-old co-founder of what is today the second-most valuable company in the world announced Wednesday he can no longer continue in his role as CEO. Although Mr. Jobs did not specifically list medical issues as the reason behind his resignation, it is likely that the health concerns which caused him to take an indefinite leave of absence from Apple in January now completely prevent him from running the company.
“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,” Mr. Jobs said in a letter to Apple’s board of directors. “Unfortunately, that day has come.”
In some ways, the resignation of Mr. Jobs is not entirely surprising, given his numerous health issues. In April of 2009, he underwent a liver transplant. Five years earlier, a cancerous tumour was removed from his pancreas. Despite his leaves of absence, Mr. Jobs has appeared in public for major Apple product announcements, such as the launch of the iPad 2 in March. Since January, Tim Cook, the company's Chief Operating Officer, has taken over CEO duties.
“This is how the company is being run now,” said BGC Financial analyst Colin Gillis. “They put up two of their best quarters ever under Tim.”
Symbolically, the departure of Mr. Jobs is sad news not only for Apple’s investors and customers, but the technology industry as a whole. Since returning to the company in 1996, Mr. Jobs has overseen Apple’s Renaissance, including the launch of a line of mobile products, beginning with the iPod, that has since changed the consumer electronics landscape and ushered in the smart phone and tablet era.
Indeed, the vision of Mr. Jobs has had such a cataclysmic effect on the industry that companies which once dwarfed Apple, such as Microsoft and Hewlett-Packard, have completely overhauled their corporate strategies to focus on the mobile markets that Apple’s devices continue to dominate. Still, the iPad and iPhone are the best-selling and highest-profit devices in their respective markets, despite dozens of competing products released in the past two years.
Mr. Jobs will also be remembered as the man who was the CEO of Apple on the day, just two weeks ago, it surpassed Exxon Mobil as the most valuable company in the world (Exxon has since reclaimed that title).
“Obviously Steve Jobs had a tremendous impact for so long, and his departure will be felt in some manner,” said Joshua Gans, professor of strategic management at the University of Toronto's Rotman School of Management. “But what he has done is establish design principles that will endure for some time.”
In terms of day-to-day operations, little is likely to change at Apple. Prof. Gans noted that Apple's recent success has had a lot to do with the company's ability to keep costs low – few high-end tablets on the market have come in at a significantly cheaper price tag than the iPad, for example. Much of that financial discipline is due to Mr. Cook's management, he added.
In his letter to the board Wednesday, Mr. Jobs recommended Mr. Cook be named the new CEO. Mr. Jobs also indicated he would like to serve as chairman of the board of directors. The board immediately implemented both recommendations.
“I believe Apple’s brightest and most innovative days are ahead of it. And I look forward to watching and contributing to its success in a new role,” Mr. Jobs said.
“I have made some of the best friends of my life at Apple, and I thank you all for the many years of being able to work alongside you.”
Although his departure from the CEO’s office is likely to worry some investors – Apple shares dropped 5.4 per cent in after-hours trading – Mr. Jobs's resignation ends a period of uncertainty for Apple, which had faced numerous questions about the extent of his health concerns. With a new CEO in place, the company will have less trouble focusing attention on its products, including the launch of the iPhone 5 later this year.
Indeed, as other tech companies have recently made huge gambles – such as Google's purchase of Motorola Mobility and HP's announcement that the company will try to sell its personal computer business – Apple has maintained a remarkably consistent business strategy for years.
“This is the right thing for Steve to do – to go out on top,” Mr. Gillis said. “I don't expect Tim is going to be spinning off the PC business any time soon.”