Is the Apple set to fall?

This entry was posted on Wednesday, January 19th, 2011

This week saw the sad news that Steve Jobs has taken a leave of absence due to his illness, shortly followed by much speculation from both city analysts and journalists as to what this meant for the future of Apple, the consensus being – not good.

It seems strange that the fortunes of the company can be tied to just one man; according to their website, there were nearly 50,000 full and part time employees as of September, so is it fair to pin it all on one guy?

Well, the history of Steve Jobs and Apple is an interesting one, and one that has been much written about over the last few days. Jobs founded Apple back in 1976 with another Steve (Wozniak) and they were extremely successful, leading up to floatation on the stock market in 1980. Jobs left shortly after that after falling out with the then Chief Executive.

Apple meandered through, and began to decline, that is until they bought a company that Jobs had founded in the meantime; and no sooner than he was back, the company’s fortunes began to improve. With the return of the founder, Apple began to release some iconic products, from the brightly coloured iMac desktop PCs & the world changing iPod series of devices to the latest iPad.

Looking at the chain of events, it certainly does seem that Jobs was key to Apple’s success. It’s not that he does all the work, more that he knows how to get the best out of the company. Indeed, during his gap from Apple, he co-founded and was the CEO of Pixar Animation Studios – one of the most successful computer based animation studios of the last decade .

It can’t be a coincidence that he’s been phenomenally successful at both enterprises, and this is what has the analysts worried. Both his and Apple’s track records lead them to believe that without him Apple faces a slide back to mediocrity.

Jobs is not the first CEO to be so closely associated with a company that any thought of a separation can send a shiver down the spine of investors. Many companies have a ‘face’ who are associated with them – if I mentioned a few names such as Richard Branson, Hugh Heffner and Marc Zuckerberg, I’ll bet you that Virgin, Playboy and Facebook popped into your head for each.

In Apple’s favour, Steve Jobs is not the first CEO to step down, and there are many examples where a key figure has managed to pass on the baton successfully. Bill Gates was Chief Executive at Microsoft for many years, but managed the process of stepping down from these duties extremely well, with the company he founded still leading the market, long after he left to manage his charitable foundation.

The difference here is that Gates managed his transition over a period of ~8 years, whilst Jobs has retained his position at the top without any similar handover. Only time will tell if Apple will fall from grace or continue to lead the field for years to come.

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