Months of speculation about Steve Jobs’ health now look to have been spot-on—the Apple Inc. chief is stepping down until at least June for health reasons. Investors can hope that he’ll make a comeback. But Apple still needs to outline a solid transition strategy. The company should appoint a temporary chief executive while perhaps leaving Jobs as chairman to reduce the disruption and set the stage for the post-Jobs era.
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Investors will surely hope that Jobs’ absence from Apple’s helm is temporary. But his departure seems hasty given that Apple just announced he was battling a nutritional disorder. This could signal a potentially more serious illness, such as the return of his pancreatic cancer from 2004.
That will spook Apple shareholders, who can thank Jobs for the company’s innovative streak that’s led to hit products such as the iPhone and iPod.
If the company loses its product development know-how without Jobs, it can wave its growth premium goodbye. That could bring Apple’s hefty price-earnings multiple down to the level of, say, Dell Inc., whacking billions off its current market capitalization.
Tech transition: Apple chief operating officer Tim Cook will step in while chief executive Steve Jobs is on medical leave. AP
To lessen the damage, Apple needs to act fast. The company has elected Tim Cook, its chief operating officer, to run its day-to-day operations. That’s a nebulous role. It should appoint him as temporary chief executive now and put its employees and shareholders at ease.
Leaving Jobs as chairman would allow him to maintain oversight as Apple’s figurehead, if he’s healthy enough to do so, without the stresses of being an active chief executive. And it could make the transition to a post-Jobs era much more palatable.