Managing succession is always a challenge for any organization, one that’s usually done with little public comment. However, when it comes to large organizations, any change of leadership draws vast amounts of editorial and soul searching. In the case of Apple, that soul searching and editorial seems to be greater than ever, mainly because of the charisma of Steve Jobs.
Perhaps the first thing to make clear is that Steve Jobs has not died and is not leaving Apple. All that is happening is that a man, who has been ill for several years, wrote a letter to his board and asked to change his role in the company. The role of a CEO is extremely demanding, even more so when you are either the first or second largest company in the world, depending on daily stock market valuation.
Admittedly, Steve Jobs is synonymous with Apple for many people. After returning to Apple, it was Jobs’ vision, drive, and attention to detail that helped turn the company around and make its products aspirational for many. But to see the future of Apple without Jobs as troubled and to assume that no-one else is capable of seeing through technical and product roadmaps that will almost certainly cover the next five years, is insulting to a lot of extremely talented individuals.
Life after Jobs
For those who covet Apple’s must-have items to complete their lives or believe that they work without any fuss, the future is going to continue to be stylish, slim, and fast. We’ve seen for example the MacBook product range replaced by the ultra slim MacBook Air. Apple will continue with its design goals for the next generation iPhone, iPad, and iPod that are due to be unveiled later this year. All we know at the moment is that they will have increased battery life, as to other features, no-one really knows, so let’s not bother with idle speculation.
Apple’s head start with Thunderbolt has already initiated a third party hardware market. More and more devices are appearing and this not only boosts Apple and its partners, but increases the pressure on the wider motherboard market to be Thunderbolt ready ahead of OS drivers and support. There is no foreseeable change likely to the Apple driver model, this will make it easy for third party hardware vendors and developers to continue building devices with Apple support.
Content creators will see no degradation to iTunes and the way their content is supported. In fact, Apple’s refusal to put Blu-ray players in its laptops proofs that it sees physical media as being phased-out – this has been driving downloads. It is not inconceivable that Apple will drop optical media devices in favor of external devices and downloads.
For developers, relax. OS X is mature and stable, iOS is also reaching maturity, and Apple has shown that it is capable of delivering a more stable product than the other OS vendors. It is not perfect, but that is the nature of software releases today. The tight time-to-market deadlines mean that sometimes not everything can be finished, but Apple does a better job than other OS vendors.
The only OS issue that developers need to think about is that Apple is not prepared to agree to support features almost in perpetuity like Microsoft has done. Evidence of that came with when Apple dropped PowerPC application support with OS X 10.7 Lion. The company informed developers before the fact and admittedly, there were a small number of upset users. However, you need to control old technology inside your OS if you are to reduce the potential for security issues in the future.
For application developers, the App Store is going from strength-to-strength, but here we could see some interesting pressure on app developers with regard to pricing. Apple has recently been hugely aggressive in slashing the costs for its own applications that are downloaded from the App Store as opposed to the purchase of boxed products from either the online or retail Apple stores.
This is no surprise as it follows what Apple’s achieved with entertainment; and opens up a significant gap between those vendors who charge the same for downloaded as for boxed products. While developers don’t have to go down the same path, where Apple leads, its users expect this to become the norm. The big software vendors are heavily resisting Apple’s moves with some, such as Adobe, actually charging more for downloading software than shipping it to you.
Is anyone going to lose?
In the short term, there will be a lot of movement of the Apple share price, but this will probably be more about stock traders looking to cash in on the news of Jobs announcement. Over the next few months leading up to the next batch of Apple releases, things will settle down again and it is unlikely that many shareholders will sell up.
Where once IBM, Microsoft, and Cisco were THE technology stocks to hold, Apple is now the preferred stock for institutions and pension funds, so there is not going to be any wholesale dumping of Apple shares, no matter how much some city traders are prepared to speculate.
What about the patent issue?
In some ways, Jobs change of role might bring a change to Apple’s policy on cross-licensing patents. This would be good news for Apple and for those it is currently in court with. Google’s acquisition of Motorola Mobility now provides it with patents it can trade with Apple. Samsung also has a number of patents to trade and we should not lose sight of the work that Samsung does for Apple in terms of chip production. HTC, similarly, finds itself with patents it wants to cross-license in order to resolve legal issues with Apple.
One of the reasons why Apple so strongly defends itself is because of the company’s early days when it was unable to defend its graphical user interface (GUI) lead against Microsoft. Jobs is determined that won’t happen again and Apple’s GUI is unquestionably the best around.
That said, Apple has seen its technology lead erode as other companies have caught up and eventually it will need to start doing deals. What we don’t yet know is whether Tim Cook is the person to do those deals.
Our view is this: That Steve Jobs is simply changing roles to take some pressure off of himself. And that the succession from Steve Jobs to Tim Cook will be seamless to virtually everyone bar a few people inside Apple and the hysteria we’ve seen from some commentators can be dismissed.