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Apple's Steve Jobs abruptly resigns as CEO Apple's Steve Jobs abruptly resigns as CEO Apple's Steve Jobs abruptly resigns as CEO Apple's Steve Jobs abruptly resigns as CEO Apple's Steve Jobs abruptly resigns as CEO Apple's Steve Jobs abruptly resigns as CEO


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Apple's Steve Jobs abruptly resigns as CEO

USA Today
by Jon Swartz and Scott Martin
Aug 25, 2011

Jobs, the iconic tech visionary who co-founded Apple and recently made it the most valued U.S. corporation, abruptly resigned as chief executive Wednesday night.

Jobs, 56, who has battled pancreatic cancer the past few years and looked noticeably weaker recently, told Apple's board of directors in a brief note that he "could no longer meet my duties and expectations" as CEO.

Apple's Steve Jobs abruptly resigns as CEO.

The company in recent days overtook Exxon for the title of most-valued corporation but is now a close No. 2.

"I hereby resign as CEO of Apple," he wrote. "I would like to serve, if the board sees fit, as chairman of the board, director and Apple employee. As far as my successor goes, I strongly recommend that we execute our succession plan and name Tim Cook as CEO of Apple."

Apple's board quickly named Cook, a 13-year Apple veteran, as CEO and elected Jobs chairman. "The board has complete confidence that Tim is the right person to be our next CEO," Art Levinson, chairman of Genentech, said in a statement on behalf of the Apple board.

But Jobs' passing of the CEO mantle is a seminal moment in corporate history.

Jobs' decision to step down is the latest jaw-dropping news to rock Silicon Valley. Last week, Hewlett-Packard said it was exploring options to sell or spin off its multibillion-dollar PC division just as the PC industry was celebrating its 30th anniversary. Jobs played a key role in the formation, and maturation, of that industry.

"Hewlett-Packard has given up because of what Apple has done," says Jay Elliot, a former Apple senior vice president who worked closely with Jobs from 1980 to 1985. "The reality is this guy was so committed to making the best products in the world."

Perhaps no tech figure in recent history or U.S. executive, for that matter carries as much sway as or has made more of an imprint on his company than Jobs. Since returning to the PC pioneer in late 1997, he almost single-handedly has resurrected the company from near-extinction to a company worth more than $330 billion.

Apple is widely expected to unveil the iPhone 5 this fall and a successor to its popular iPad 2 tablet shortly thereafter. Apple stock is expected to take a blow this morning, and many in the past have openly wondered whether Apple can maintain its mojo and innovative streak without Jobs at the helm.

Shares closed Wednesday at $376.18, up $2.58. But in after-hours trading, after Jobs' resignation, the stock dipped 5% to $358.50.

"Steve Jobs is the greatest leader our industry has ever known. It's the end of an era," Salesforce.com CEO Marc Benioff said in a tweet. Added Aaron Levie, CEO of Box.net, "It's no stretch to say he is the most important figure in tech, now or ever."

Taipei-based Foxconn Technology Group, which makes Apple iPhones and iPads, said in a statement that despite Jobs' resignation as CEO, it has "every confidence in Apple's leadership and its ability to continue to innovate and to drive much of the global technology industry's growth."

Analysts also expect a smooth transition. Cook, 50, has earned kudos for his steady stewardship of Apple, filling in as temporary CEO, while Jobs was on medical leave. Apple is also renowned for its deep roster of engineers, marketers and other executives.

Gartner's Michael Gartenberg says that despite Jobs being considered by consumers as Apple incarnate, "No individual does it alone."

"Is this the end of an era? Absolutely," Gartenberg says. "Is his departure at a time when Apple is at its peak, in terms of market value and creativity? Yes. But transitions happen all the time."

The tech market has been one of the few industries largely immune to the prolonged downturn in the U.S. economy, and Apple had a lot to do with that by churning out eye-catching, popular products such as the iPad and iPhone.

Jobs' run of smash hits has been unprecedented in modern times, says Richard Doherty, an analyst at The Envisioneering Group. "It's the power to say, 'No,'" Doherty says. "A lot of products could have gotten to market earlier, but he wanted it better. So many products fail because they're not ready," he said, referring to HP's decision last week to ditch its TouchPad tablet computer less than two months after its debut.

Apple's DNA

Jobs' departure from the CEO role won't bruise Apple in the near term, though, experts say.

"The next wave of Apple products are well into the product-development cycle," says Charles Golvin, analyst at Forrester Research. "The next iPhone is certainly done. The next iPad is certainly along the way."

Financial analysts who cover Apple have repeatedly cited the unknown status of Jobs' health among risk factors to the company. That's because Jobs is viewed as a unique category of leader with a hands-on approach tied to much of the company's success. "I think he'll continue to be involved," says Golvin. "They have great people running operations that have proven their worth. Apple is a really well-oiled machine."

Jobs has installed a focused and pervasive culture at the company, with people who share his passions. Nonetheless, three senior executives who reported to Jobs have left the company in the past six months. Just last week, vice president Andy Miller stepped down as mobile ad chief to join Highland Capital Partners.

In June, J.C. Penney poached Apple retail chief Ron Johnson, who will become its CEO Nov. 1. And in March, Bertrand Serlet, a senior vice president responsible for development of the Mac operating system, bolted.

What many industry experts express, however, is uncertainty about how Apple will fare without Jobs as CEO in the long term. "We aren't going to see the impact of this for the next year and a half," says Golvin. "It will take that long for us to see what Apple is like without him as CEO."

Though he brought simple, elegant technology to the masses, the reclusive Jobs even before his illness rarely spoke publicly, except at Apple events.

But in one interview, in his Pixar office in 1998, he offered a rare insight into who he is. Jobs said he identified with Flik, the idealistic ant in ABug's Life, the animated movie from his Pixar Animation Studios. Flik saves his colony from an army of grasshoppers that bears an eerie resemblance to Microsoft.

Jobs discovered he had a form of pancreatic cancer in October 2003, informed Apple employees in 2004 and acknowledged the cancer during a commencement speech at Stanford University in 2005. In 2009, Jobs took a medical leave. Cook took over day-to-day operations in Jobs' absence then. Jobs later returned to the helm but then in January this year took an indefinite medical leave.

The beginning

At age 21, Jobs co-founded Apple Computer with Steve Wozniak. By 25, Jobs was a millionaire, and he made the cover of Time magazine at 26. But by 30, the prickly Jobs was unceremoniously booted from Apple, in 1985.

During the ensuing dozen "wilderness years," as they were called by Jobs followers, Jobs bought what became Pixar Animation Studios for $10 million from director and producer George Lucas in 1986 and started NeXT Computer in 1988. NeXT struggled to sell its high-priced machines, but Apple acquired it for more than $400 million in 1996, setting the stage for Jobs' return to Apple. Disney bought Pixar in 2006 for $7.4 billion.

Still, there was controversy. Later that same year, Apple whose stock would soar past $200 per share in 2007 appointed a special committee that discovered irregularities with roughly one in seven stock grants that Apple issued from 1996 to 2004. Apple was forced to restate earnings and took a pretax charge for unreported compensation expenses of $105 million. Disney also investigated and found backdating at Pixar during Jobs' stint as CEO. Yet the events at the two companies did not cost Jobs his job, as it did dozens of executives at other tech firms. Jobs did not directly benefit from backdated options.



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