Oct 04

Steve Jobs on Innovation. Copyright © Cea (Playing Futures: Applied Nomadology). Image used under Creative Commons License Attribution 2.0 Generic (CC BY 2.0).

Apple is expected to announce the iPhone 5 today at a major press event.  A PriceGrabber survey in July showed that a whopping 35% of respondents want to buy the yet-unseen iPhone 5 when it hits the market.  The iPhone 5 is arguably the most anticipated tech product of 2011.  It’s also the first major product released since tech legend Steve Jobs retired as CEO of Apple.

Mr. Jobs plans to remain Chairman of the Apple board.  COO Tim Cook has taken the helm as full-time CEO.  Cook had already served as Apple’s temporary CEO a few times since 2004 when Jobs was on medical leave due to pancreatic cancer. 

Cook has done a great job running Apple’s day-to-day operations while Jobs has been ill.  Cook is widely credited with getting Apple out of the hardware manufacturing business.  This helped the company reduce inventory levels, streamline its supply chain, and dramatically increase margins.

But a good businessman is not the same as a visionary technical genius.

The day after Jobs announced his retirement, Apple stock briefly plunged 5% before recovering.  Investors seem confident that Apple’s winning ways will continue with Jobs as chairman.  Many industry analysts were also quick to minimize the impact Jobs’ retirement would have on Apple:

  • Actually, Apple Will Be Fine Without Steve Jobs (Business Insider)
  • Why Apple Will Be Just Fine Without Steve Jobs (Cult of Mac)
  • Mace Says Apple Will ‘Do Just Fine’ Without Steve Jobs (Washington Post)
  • Apple Without Steve Jobs Will Do Just Fine: 10 Reasons Why (eWeek)
  • Apple will be fine without Steve Jobs, our poll reckons (CNET UK)

But one has to look no further than industry behemoth Microsoft for a cautionary tale of what happens when a cutting edge technology company loses its visionary leader.

As I detailed in my article Bye Bye Ballmer, Microsoft ruled the technology industry for two decades under dynamic duo Bill Gates and Steve Ballmer.  Then Gates retired as CEO in January 2000 to embark on his much more important mission to save the world, businessman Ballmer took control of Microsoft, and the result was just what you’d expect if Batman ceded Gotham to Robin.

Microsoft rested on its Windows and Office laurels the past decade while it was out-innovated by Apple and Google.  In spite of having a decade head-start, Microsoft completely missed the smartphone and tablet wave.  Microsoft also suffered serious missteps with the Kin phone that was pulled from the market 3 weeks after launch, the Zune MP3 player that couldn’t even make a dent in the market against the iPod, and a buggy bloated Vista that made businesses question whether they still needed a full-fledged Windows PC for every worker.

If a picture is worth a thousand words, then this Microsoft stock chart says it all: Skyrocketing growth flatlines after technical visionary cedes control.

Microsoft Stock Price from Yahoo Finance

Apple became the world’s largest technology company because of its critical attention to design and detail.  Apple makes elegant products that work simply and simply work.  And while each of its 46,000 employees had a hand in Apple’s success, the company’s overall direction and principles were driven by the irreplaceable Steve Jobs.

Apple will surely do fine the next few years with the iPhone 5 and iPad 3 in the pipeline.  But unless Tim Cook is a visionary technical genius in disguise, Apple’s long-term success is in doubt.

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Article published on October 4, 2011

6 Responses to “No, Apple Won’t Do “Just Fine” Without Steve Jobs”

  1. Sean O Says:

    There is no question that Apple will struggle to some degree without Steve at the helm. The only hope is that Cook realizes what he is NOT and grooms one or several Apple employees to be the product visionary of the company. Steve didn’t design all of the products for Apple – there are some great designers and engineers at the company to backup the Jobs vision. Cook’s job one has to be to breed that innovation to continue even when SJ retires from the Chairman role.

  2. Erik Says:

    Whether Apple does fine or not will be very revealing in terms of how much of its current success and cachet is attributable to the “Cult of Steve Jobs”. That is, I think Apple’s performance over the next few years will tell us a lot about how much of its success has been attributable to marketing lifestyle products. Do people tend to buy Apple products solely because they are easy to use and elegant, or is there an element of fashion in there as well? Without the charismatic Jobs at the helm, we’ll probably get a good sense of that.

  3. timm Says:

    So, no iPhone 5, just an upgraded iPhone 4S. Not a good first step for a post-Jobs Apple. If the world thinks you are going to release the iPhone 5, but you know it’s only the 4S, then you should leak that beforehand to lower expectations. Especially for the first post-Jobs media show. What a disappointment. Wall Street reacted accordingly and knocked the stock down a bit.

  4. Steve Jobs Explains the Rules for Success Says:

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  5. Skeptic Says:

    First, all this speculation regarding Apple’s future success is just that. Speculation. Only time will tell. Second, your analysis of Microsoft is flawed. Microsoft was not innovative before Gates retired as CEO. Microsoft has always relied on Windows and Office to generate revenue and has failed miserably at everything else. Lastly, lots of tech stocks experienced a meteoric rise in price in the mid-to-late 90’s then plummeted after the .com crash, and have been flat since. “Skyrocketing growth flatlines…” would be a succinct way to describe the entire tech sector. Are you suggesting that sluggish growth for the entire sector is due to Bill Gates’ departure?

    Lastly, technophiles tend to focus too much on the tech aspects of tech. While Apple’s system integration has no parallel in the world of consumer technology products at the moment, ironically, their current success has nothing to do with technology.

  6. Sean O Says:

    I agree with Skeptic on: “Lastly, technophiles tend to focus too much on the tech aspects of tech. While Apple’s system integration has no parallel in the world of consumer technology products at the moment, ironically, their current success has nothing to do with technology.”

    If you talk to a technologist, they love things that are really cool and almost hard to use. This is why IT folks love Windows since they can configure it to their hearts content (it also helps that it is cheaper than a Mac). Ease of use is a non-issue and the value premium for ease of use is not justified.

    Apple’s success was to take very good technology and make it easy to use and accessible. In essence, make it simple but still powerful. That was Steve’s gift to Apple and if he trained Apple’s execs and middle management to carry that belief than Apple will be fine.

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