On Wednesday, Steve Jobs resigned as CEO of Apple Inc. (NASDAQ: AAPL). He said in his statement that the “day has come” when he can “no longer meet my duties and expectations as Apple’s CEO.” He has asked to remain an employee of Apple and serve as Chairman of the Board.
While we believe Jobs was certainly a visionary, he was most influential in 1985 and, again, in 1997 when he returned to Apple. Today, Apple is the second largest company in the world, so it is not likely he was working on the programming of Apple products. Steve Jobs is brand recognition. He defined the business, so he will be impossible to replace in that respect. However, we believe that Apple’s business operations or product pipeline will in no way shape or form be harmed with his absence as CEO.
If he were to succumb to his health issues, we would expect the stock to drop temporarily. We believe a permanent absence would have no influence on the company’s product pipeline. It is likely that Apple has a 10-year strategy of products.
We are also tired of analysts downplaying new CEO Tim Cook, saying “he is not a visionary.” Cook has been the Chief Operating Officer since 2005, and has led the company during Jobs’ past absences.
The overhang of Jobs’ health and his reduced role at the company has already affected the stock. The market priced Jobs’ eventual resignation months ago. The stock is trading for 13 times earnings. We feel the company is positioned to do well without Jobs.
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