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Apple's Cancer Scare

By Peter Burrows Probably few companies are more dependent on their CEO than Apple Computer. Before Steven Jobs, 49, came back in 1997 to work at the company he helped co-found in the 1970s, Apple seemed to be rapidly fading to irrelevancy. Since his return, Jobs has imposed his perfectionist approach to product design, his savvy marketing touch, and showman's flair to put Apple (AAPL), creator and producer of the Mac computer and iPod music player, back on the map. Indeed, no other $6.2 billion tech company gets anywhere close to the attention that Apple gets from investors, customers, and the media.

That's why the Aug. 1 news that Jobs had undergone surgery for cancer was such a shock. The company released a note Jobs wrote to Apple employees from his bed at an undisclosed hospital near his home in Palo Alto, Calif., advising them that he had undergone successful surgery for a "very rare form of pancreatic cancer called an islet cell neuroendocrine tumor." Apple's stock fell over 2%, to trade around $31.61, on the day the e-mail was sent to 11,000 employees.

WHEN DID HE KNOW? Fortunately, this form of cancer is treatable and a full recovery is expected. Jobs's e-mail said: "I will not require any chemotherapy or radiation treatments." Daily operations will be handled by Operations Chief Tim Cook during the month of August, while Jobs recuperates. He says he expects to return to work full-time in September, although he warned that "I'm sure I'll be calling some of you way too much in August." Says Apple spokeswoman Katie Cotton, "We're really thrilled that the surgery was so successful. The prognosis is excellent." Adds Dr. Jeffrey Norton, chief of surgical oncology at the Stanford University Medical Center, "Once you take out tumors of this type, it's usually curative."

That's good news for Apple investors from another perspective: It could clear up worries about Apple's succession plan. While Apple's board says it has a plan in place, the company hasn't disclosed any details. The most likely successor candidates would be Tim Cook, who now runs the Mac unit and has run operations in recent years, or possibly board member (and former Apple exec) Bill Campbell, if he were willing to come out of semiretirement to do it. Clearly, there's no mini-Steve at Apple that could fill all his shoes. "I don't see any obvious choice on his team to be the CEO," says John Thompson, vice-chairman of headhunting firm Heidrick & Struggles.

Apple isn't revealing the timing of when Jobs found out about his illness. In an interview, Campbell says since Jobs worked right up until the weekend of his surgery, the board didn't think there was anything to disclose -- particularly once Jobs's doctors determined that his prognosis for a full recovery was good. "We didn't disclose timing of any sort because we're very respectful of Steve's privacy," says Campbell, who was visiting Jobs at the hospital with Apple executive Phil Schiller when the CEO sent his e-mail. "This was very straightforward from a disclosure point of view."

"I don't know the details. He may have found out the day before his surgery," says Paul Holmes, editor of The Holmes Report, a public relations industry newsletter. "But the best practice is to release this kind of information as soon as possible, to give people time to get used to it." Given how critical Jobs is to Apple's brand, "the requirement for candor overrides any privacy concern, because [Jobs' health] has a tremendous impact on investors' perception of Apple."

Of course, scuttlebutt and theories abound among the Mac faithful, who watch everything to do with Jobs like a hawk. Some observers noted that Jobs looked as if he'd lost a lot of weight when he gave his keynote at Apple's recent WorldWide Developers conference. Cotton wouldn't comment, although she did say "he's six feet tall and weighs 165 lbs. It's a healthy weight for his height." Indeed, "these type of tumors don't normally cause weight loss," says Stanford's Dr. Norton. "He probably was on a diet." Laughs board member Campbell: "I wish someone would comment like this when I lose weight."

Most likely, Jobs will be back in September -- possibly in time to unveil the company's new iMac home PC, which is due to be released that month. Despite a scare, it looks like Apple won't have to be without Jobs for long.

Apple's CEO, Steve Jobs, today sent the following e-mail to all Apple employees:


I have some personal news that I need to share with you, and I wanted you to hear it directly from me.

This weekend I underwent a successful surgery to remove a cancerous tumor from my pancreas. I had a very rare form of pancreatic cancer called an islet cell neuroendocrine tumor, which represents about 1% of the total cases of pancreatic cancer diagnosed each year, and can be cured by surgical removal if diagnosed in time (mine was). I will not require any chemotherapy or radiation treatments.

The far more common form of pancreatic cancer is called adenocarcinoma, which is currently not curable and usually carries a life expectancy of around one year after diagnosis. I mention this because when one hears "pancreatic cancer" (or Googles it), one immediately encounters this far more common and deadly form, which, thank god, is not what I had.

I will be recuperating during the month of August, and expect to return to work in September. While I'm out, I've asked Tim Cook to be responsible for Apple's day to day operations, so we shouldn't miss a beat. I'm sure I'll be calling some of you way too much in August, and I look forward to seeing you in September.

Steve BurrowsBurrows

is Computer Editor in BusinessWeek's Silicon Valley bureau

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