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Can Apple survive without Jobs?

CORE QUESTION?Will the world's hippest firm falter if its founder waves goodbye?

THE OBSERVER , LONDON

Apple Computer CEO Steve Jobs holds up a new iPod with an episode of hit US TV show Desperate Housewives showing on it in San Jose, California, on Oct. 12 last year.

PHOTO: AP

Apple Computer Inc is the world's definitive 21st century company, harnessing like no other the possibilities that exist in the digital age.

Last month the firm produced truly startling results. Sales leapt by 48 percent as consumers the world over bought music from the iTunes virtual music store to play on their iPod media players.

But what will become of Apple when its all-powerful chairman, Steve Jobs, eventually decides to spend more time with his billions? Can it withstand growing competition and are we witnessing the end of the Californian dream?

Jobs's brush with cancer two years ago has led some to fear for the future of a company without its dynamo. Today Apple has revenues in excess of US$4.3 billion and controls more than half the world's digital media player market, according to US research consultancy NPD, while its computers and operating systems are revered.

But shares have dipped in recent weeks over fears that iPod sales have peaked. And two weeks ago Microsoft unveiled its bid to capture the digital music market with its Zune brand, to be launched this year.

Microsoft without Bill Gates seemed unthinkable until last month when he announced he was stepping down. In retrospect, we can see that a good deal of planning went into it. First he split his role into two and made Steve Ballmer chief executive, taking the software overlordship for himself. Then he brought in Ray Ozzie to be groomed for the software role over two years. And finally, he has choreographed his exit so that it takes place over a two-year period.

The result: a decision that would once have sent the share price through the floor has been received with little disruption.

There's no equivalent to Ballmer or Ozzie at Apple. Or, if there is, the public has never seen them. Whenever there is a spotlight on Apple, Jobs is in the center of the beam. His regular keynote speeches at Mac Expos are more like rock concerts than corporate events. If there are cool new products to be unveiled, the chairman is the one who does the demos.

"He's absolutely integral to the success of company," said Conrad Roeber, partner at media consultancy Mediatique.

Jobs's identification with Apple is, if anything, more fascinating than Gates's with Microsoft, because Jobs was expelled by a 1980s boardroom coup from the company he cofounded in 1976. In those early days, Apple was a fantastically innovative, off-beat company with a counter-cultural corporate ethic.

A celebrated Silicon Valley joke asked: "What's the difference between Apple and the Boy Scouts?" Answer: "The Boy Scouts have adult supervision."

But as the company prospered, adults were hired, chief among them John Sculley, former CEO of Pepsi. Hiring him was Jobs's idea; later he called it his biggest mistake.

Sculley changed the corporate ethos from one dominated by technology to one driven by marketing. In the end there was a spectacular row. The board backed Sculley, and Jobs left to found a new computer company, NeXT, and, later, an animation company, Pixar.

After his departure, the company languished as a succession of marketing buffs nearly drove it into the ground. In 1996, Apple bought NeXT for US$402 million and got two goodies in return. One was the NeXT operating system, which became the foundation of Apple's operating system OSX; the second was Jobs as "interim CEO" on a salary of US$1 a year. (Don't worry, he hasn't starved. The board voted him lavish options and perks, including a US$90 million airplane. And Disney paid US$7.4 billion for Pixar, which he created from a US$10 million acquisition of George Lucas's graphics division.)

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