Steve Jobs shook up the electronics world for a decade with the iPod, iPhone and iPad at the expense Sony Corp., Nokia Oyj and Hewlett-Packard Co. His exit as Apple Inc.’s chief executive officer may pave the way for competitors to regain market share, analysts said.
Sony and Nokia were among Apple rivals whose shares advanced during Asian and European trading amid speculation Jobs’s withdrawal may increase their ability to compete in products ranging from smartphones to tablet computers. Jobs, who will be replaced by Chief Operating Officer Tim Cook, rescued Apple from the brink of failure and turned it into the world’s biggest technology company.
“It’s going to give competitors a bit more of a lease of life to go out and compete harder,” said Richard Windsor, global technology analyst at Nomura International Plc. “It’s been thought about, talked about endlessly for the past several years that Tim Cook would probably take over so while you get an initial knee-jerk reaction on the downside, we would probably expect that not to last very long.”
Sony climbed 2.1 percent in Tokyo, while Samsung Electronics Co., which also counts Apple as its biggest customer, gained 2.4 percent in Seoul. Nokia advanced as much as 2 percent in Helsinki. HTC Corp., the Taiwanese maker of phones that run on Google Inc.’s Android software, rose 1.4 percent in Taipei.
“If the new management team doesn’t sustain the level of innovation that Steve Jobs spearheaded, it’s going to be an opportunity for the competition in the long term,” said Lee Young Seog, a Seoul-based fund manager at Korea Investment Management Co., which oversees about $19 billion. “Still, because of Tim Cook’s competence and the system at Apple, the competitive landscape isn’t likely to change anytime soon.”
Jobs, whose transformation of Apple picked up pace from the iPod’s introduction in 2001, will become chairman. Jobs was on medical leave since Jan. 17 after combating a rare form of cancer since 2003 and surviving a liver transplant in 2009.
Since the iPod, Apple has unseated Nokia as the world’s biggest mobile-phone maker by revenue with the iPhone, while the success of the iPad tablet computer came at the expense of traditional desktop and laptop computer makers such as Hewlett-Packard and Taiwan’s Acer Inc.
Investors aren’t the only ones praising Jobs.
“I think his brilliance has been well documented, but what gets forgotten is the bravery with which he’s confronted his illness,” said Howard Stringer, chairman and chief executive officer of Sony, whose products compete against Apple’s iPhones, iPods, iPads and Mac computers. “For him to achieve this much success under these circumstances doubles his legacy.”
James Chung, a spokesman at Samsung, declined to comment on Jobs’s resignation as did Winston Yung, chief financial officer at HTC.
“Steve Jobs is a visionary in the computing industry,” Nokia CEO Stephen Elop said in an e-mailed statement. “We look forward to both Steve and his team having a positive impact on our industry for many years to come.”
China’s ZTE Corp. said it will see a “more active” role in the smartphone industry as Jobs’s resignation creates opportunities for rivals.
“We are very thankful to Steve Jobs’s contribution to the smartphone and mobile broadband industry,” Xie Daxiong, ZTE executive vice president, said in an e-mail today. “With innovation spirit, ZTE will play a more active role in communication, smart terminal and mobile broadband industry, and build more value for consumers around the world.”
Cook, who’s been running day-to-day operations at Apple since Jobs went on medical leave, may improve relations between Apple and Samsung, which makes key components for the iPhones and iPads, said Seo Won Seok, an analyst at NH Investment & Securities Co. in Seoul. Apple has sued HTC and Samsung -- which use Google’s Android software -- on claims of patent breaches.
“The new management team will have to prove itself in terms of innovation,” said Abhey Lamba, an analyst at ISI Group in New York, said in a telephone interview. “Investors are going to be a little careful.”
Apple Without Jobs
Apple fans expressed their concerns.
“I’m worried about how big the impact will be on Apple’s performance,” said Ichiro Kato, a 32-year-old office worker visiting Apple’s flagship store in the Ginza shopping district in Tokyo today. “Apple’s products cannot be produced without Steve Jobs.”
Some investors say Apple may have outgrown Jobs.
“The Apple halo effect is still very strong, and doesn’t just rely on Steve Jobs being there,” said Arnout Van Rijn, chief investment officer for Asia at Robeco Group, which owns shares of Samsung and HTC. The departure of Jobs as CEO won’t strengthen competitors such as Samsung and HTC, Van Rijn said.
Gene Munster, an analyst at Piper Jaffray & Co., said in a note to clients he kept his “overweight” rating on Apple’s stock unchanged “without hesitation.” Jefferies & Co., JPMorgan Chase & Co. and Morgan Stanly also maintained their investment ratings on Apple.
Apple suppliers fell. Hon Hai Precision Industry Co., the Foxconn Technology Group flagship that assembles iPhones and iPads, fell 4.6 percent to a two-year low in Taipei. TPK Holding Co. and Wintek Corp., which supply touch-screens for Apple, also declined.
“Foxconn wishes Steve Jobs will get well,” Hon Hai said in an e-mail. “We think Tim Cook has shown good work as stand-in CEO during Jobs’s absences and expect Apple will perform well in the future. The relationship between Cook and Foxconn has been very close and we expect that the relationship will become even closer in future.”
The iPhone’s popularity and Apple’s creation of the App Store, where users can download applications that can be used for everything from playing games to organizing daily chores, has spawned new opportunities for software writers. It’s also helped boost popularity of companies such as Rovio Entertainment Oy, the creator of the Angry Birds game.
Applications on Apple’s online store have been downloaded more than 15 billion times since its opening in 2008, with the Cupertino, California-based company getting a 30 percent cut in each sale. The iPhone is Apple’s best-selling product and contributed to 38.6 percent of the company’s revenue last year.
“Apple’s management was partly dependent on the charismatic manager, so if he is going to step away, Apple may have come to a threshold,” said Mitsushige Akino, who oversees $600 million in Tokyo as chief fund manager at Ichiyoshi Investment Management Co. “Apple may already have peaked out in terms of the market capitalization and stock price, so this resignation may become the symbol of that.”
— With assistance by Yuki Yamaguchi, Saeromi Shin, and Diana Ben-Aaron