Apple Without Its Core?

Steve Jobs' medical leave comes at a time when Apple is well-positioned, but no one can fill his many roles

When Apple (AAPL) CEO Steve Jobs went back to work in 2004 after surgery for pancreatic cancer, he was asked in an interview with BusinessWeek about the significance of his role at the company. First he joked about being "head janitor," but then turned serious. "Ultimately, there needs to be some gravitational force that pulls it all together," he said. "Otherwise, you can get great pieces of technology all floating around the universe, but it doesn't add up to much."

The question now is whether Apple is losing its gravitational force. On Jan. 14, the 53-year-old Jobs said he will take a medical leave of absence through June. "My health-related issues are more complex than I originally thought," he said in a public statement. Within minutes of the news, Apple shares dropped 10%.

Missed Already

The fear is that Jobs may never return—and Apple won't be the same company without him. Jobs was kicked out of the company in 1985. By the time he came back in 1996, Apple was on the verge of bankruptcy. "What is an Apple that doesn't have that charismatic figure?" says analyst James L. McQuivey of Forrester Research (FORR).

Jobs plays many roles at the company. He's the perfectionist who pushes his team to create elegant, iconic products. He's the marketing guru who took technology advertising mainstream, with the Orwellian ad that introduced the Mac in 1984 and most recently with the "I'm a Mac" ads. And he's the master of the keynote address, capable of drawing unmatched publicity for Apple's latest products.

The CEO exerts far-reaching control through his weekly Monday management sessions. With a handful of executives, he makes decisions large and small, from whether to enter a new market to what color marble to use in a new Apple retail store.

His greatest value to Apple may be the influence he has with employees and outsiders. Only Jobs is capable of convincing the 32,000-person company that it can wade into new business—like music or cell phones—and rewrite the rules of competition. While mobile-phone rivals produce dozens of models designed to meet the needs of various consumers, he came out with a single iPhone—and took a big chunk of the business. He also persuaded AT&T and other wireless operators to give up control over what software can be installed on the iPhone, giving Apple the opportunity to distribute new applications for the device.

In the PC business, Jobs has steadfastly refused to lower prices in line with the rest of the industry. Instead, by focusing on quality, Apple has lifted margins and market share at the same time. Jobs says his approach comes from his long history with personal computers. "Look, I was very lucky to have grown up with this industry," he said in that previous interview. "I did everything in the early days—sweeping the floors, buying chips, you name it. I put computers together with my own two hands."

Jobs is leaving his day-to-day duties to Tim Cook, Apple's well-respected chief operating officer. And investors may be reassured that the CEO is taking his leave at a time when Apple looks well-positioned for the next few years. But the company can't live off its existing products forever. "It makes you wonder whether the Apple of the future is one that can't make dramatic leaps," says Forrester's McQuivey.

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