When Apple made its annual tranche of product announcements in San Francisco last week, few observers were focused on the products. The big question was one that the Californian technology giant has rarely had to answer: Where was Steve Jobs?
Last month, Apple announced that its emblematic and charismatic chief executive would not be making his annual address to the industry at Macworld. It was the first time he had skipped the event since returning to the company in 1996, leading to rampant speculation about his health.
Despite constant attempts to quell interest, Apple eventually revealed the truth — Jobs was suffering from a “hormonal imbalance,” itself the result of life-saving cancer surgery in 2004.
For many, Apple’s massively successful brand is synonymous with Jobs, who co-founded the company in 1976 and is seen by most as indispensable. This perception is largely shared by Wall Street, which has become obsessed with the company’s long-term future. What if Jobs is no longer at Apple? Could it survive — and who would take over?
Predicting Jobs’s successor is almost impossible. Even trying to guess who is in favor and who isn’t would tax seasoned Kremlinologists, who could divine power struggles from the positions of USSR leaders on the balcony at the May Day parade.
Apple-watchers do the same. Late last year when Tony Fadell — who in 2001 brought the idea of the iPod and the iTunes store to Apple — left the company, some people looked back and found his downfall foreshadowed in a Jobs demonstration of the new iPhone in 2007: When showing how to delete a contact from the phone’s address book, it was Fadell’s name that Jobs erased.
The problem for those trying to understand who might be Apple’s next CEO is that the company’s board is so tight-knit. When Jobs regained control in 1997 after a 10-year exile, Apple had become notorious for leaks. Jobs, who has an innate understanding of the value of surprise, changed that completely by instituting a simple rule: Loose lips sink ships. This makes it hard for observers to pick apart the succession process, particularly among internal candidates. What is clear is that the executive team around Jobs has been in place for a comparatively long time.
Some are confidantes who have been in his coterie for more than a decade. Others predate Jobs’s return to Apple, such as Phil Schiller, head of product marketing, who stood in for his boss last Tuesday, and Jonathan Ive, the British designer who has won awards for his work on the iMac, iPod and other products.
The company has not been riven by boardroom rows and power struggles and there is none of the usual personal dynamics found in a top-flight company trying to thrive. Instead, Apple’s board has a collegiate approach: Every Monday morning senior executives meet to go over in minute detail every aspect of the business, including which models of which iPods are selling well or not.
But for all that, Jobs is still identified as the driving force and vital to Apple’s commercial and financial success. Following false reports last October that he had had a heart attack, former Wall Street analyst Henry Blodget estimated that Jobs added 20 percent to the stock’s value.
So who would take his place? The question of succession had not been raised until Jobs’s brush with pancreatic cancer, a rare and treatable form that was diagnosed in October 2003, but only treated — after Jobs didn’t respond to a special diet — in summer 2004. That, and subsequent speculation culminating in last week’s confirmation of his latest problems, threw the matter into sharp relief.
When Jobs was recovering from his surgery, chief operating officer Tim Cook ran the business, while Schiller took over public duties. Cook, described as demanding but not a visionary, is respected inside Apple but rarely considered as a replacement for Jobs. While Schiller, an engaging and amusing public speaker, has been touted as a successor, it is unclear how well he could set out a strategy for the company.
Ive, who has, unusually, been trotted out by Apple at recent events, has also been put in the frame. But for all his expertise in industrial design, he has not shown any evidence that he would seek to shoulder the huge burdens of a chief executive, where marketing, software and financial considerations must rule.
Another one-time contender, Ive’s former boss as head of hardware Jon Rubinstein, left in 2007 to become chairman of the handheld computer company Palm. That might not rule him out entirely, however; his engineer’s training, allied to his long experience of life inside Apple — and now experience running another company — could count in his favor. Rubinstein, however, is staying tight-lipped and refused to comment on Apple’s current predicament.
Leander Kahney, the author of The Cult of Mac and Inside Steve’s Brain, believes Apple has now been molded so closely in the image of Jobs that it could easily survive without his leadership.
“The company is a well-oiled machine, which is already 80 percent run by his lieutenants,” he says. “During the past 10 years, Jobs has instituted his personality traits into Apple’s business processes. His love of simplicity and good design, his obsessive perfectionism and focus — all have become trademarks of how Apple goes about its business. This will continue after he’s gone.”
However, he adds, whether the company can continue to progress indefinitely is another question: “Apple will be fine post-Steve Jobs for about a decade. The company will run like clockwork at first and things will go wrong only slowly.”
That is because while the challenge that will follow Jobs’s departure is simple to enunciate, it is hard to fulfill. At Apple, it is not enough to understand technology, design and the trends shaping them; the successor also has to be a strong leader who can pick a path through an increasingly complex environment.
Apple focuses on profitable niches, and tries to expand them. Its Mac computers are still niche; the iPod became a global brand. The iPhone hangs between the two. And after that, what is the next big thing Apple must be ready to do? The next chief executive probably knows. That will mark him, or her, out.
Amid all Apple’s recent successes, though, it’s easy to forget that Jobs has not always guessed correctly. In 2000, Apple chose to put DVD drives into its computers, rather than CD-burners able to create music discs. It was a bad choice: CD burning was big business in 2000, and in January 2001 Jobs had to tell analysts that the company had suffered its first quarterly loss since he became chief executive. The same year he announced the G4 Cube computer, a 20cm square Macintosh encased in plastic. Despite Apple’s hype, the machine failed to catch the public imagination and, after being plagued by technical problems, was discontinued.
Undeterred by those failures, Apple quickly bought a third-party music-playing program called SoundJam and transformed it into its own brand, which it called iTunes. Soon afterwards, Fadell got in touch with his idea for a digital music player —then a burgeoning sector — tied to an online music store. The player became the iPod; the rest is history.
That vision — to brush off defeat and focus on industry-changing products — is what could prove irreplaceable if and when Jobs departs Apple, Kahney says.
“The big problem will be developing new products, the unique talent that Jobs so excels at, a skill that few in any other tech company — or any other industry, for that matter — seem to exhibit,” he says.
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