Steve Jobs: the core of Apple

An erroneous eulogy, then a withdrawal from Macworld caused investor panic - many now believe Apple has an unhealthy reliance on Steve Jobs.

Steve Jobs is dead. Well, that seemed to be the case briefly one day last August, at least, when Bloomberg inadvertently posted its obituary of the "Apple founder, tech visionary" for all the world to see. And the world did see. Before the wire service could kill its tribute, shockwaves had rippled out across the world's iPhones and Apple's share price took a dive.
The foul-up was a macabre illustration of just how inextricably Jobs and the Apple brand are linked, not only in the minds of Nasdaq investors but also in the belief system of the army of self-styled "Macheads", for whom Apple is more of a cult than a brand.
Not that Apple's devotees lack humour. Following the blunder, one couldn't resist suggesting that Bloomberg might be running on a Windows server, while another, posting on the Valleywag website, took the opportunity to mock up a picture of a gravestone, hewn in the shape of an iPod Nano, engraved with the epitaph "Steve Jobs. Fatal error occurred".
"Not to worry," commented Raincoaster, the artist. "If you hold him underground for three days he restarts."
During the past week or so, however, gallows humour has seemed less appropriate. One of Mr Jobs's last major public appearances was at the annual Worldwide Developers Conference in San Francisco in June, where he grandstanded the new iPhone 2.0 software. The buzz in the media and across the internet, however, was all about Mr Jobs's appearance. Dressed in his trademark jeans and black poloneck, he was distinctly gaunt. With its chief executive recently estimated by Barron's magazine as being worth US$20 billion to the company in capitalisation, small wonder that Apple was quick to counter speculation about his health. As the website AppleInsider noted: "Investors and Apple loyalists pay particular attention to the chief executive's appearance because they consider him to be irreplaceable to the company he rescued from the doldrums a little over 10 years ago."
Apple told The Wall Street Journal that Mr Jobs had been suffering from a "common bug" but, as the paper reminded its readers, four years earlier he had been diagnosed with "a rare form of pancreatic cancer … for which he underwent surgery that Apple said was successful".
Back in July last year, as the health scare rumbled on, fuelled further by a Fortune magazine cover story, "The trouble with Steve Jobs", Apple insisted that Mr Jobs's physical well-being was a private matter, a line bound not to impress investors in a company so apparently reliant on one man's vision. In Fortune, Peter Elkind had written that after the 2003 tumour diagnosis Mr Jobs, "a Buddhist and vegetarian … sceptical of mainstream medicine", had initially decided not to have the recommended surgery. According to Elkind, Mr Jobs held his ground for nine months, "as Apple's board of directors and executive team secretly agonised over the situation - and whether the company needed to disclose anything about its CEO's health to investors". After all, as Elkind pointed out, Mr Jobs "was widely viewed as Apple's irreplaceable leader, personally responsible for everything from the creation of the iPod to the selection of the chef in the company cafeteria. News of his illness, especially with an uncertain outcome, would surely send the company's stock reeling."
In the end, Mr Jobs had the operation in 2004 and appeared to have beaten the disease, but this week the rumour mill was again grinding furiously.
For the past 25 years the annual Macworld Conference & Expo in San Francisco has been linked inextricably with Apple. In fact, it is privately owned and run by the International Data Group, but since 1998 Apple has chosen Macworld as the platform from which to unveil its annual product surprises, with Mr Jobs delivering an eagerly anticipated keynote speech.
On Dec 16, Apple announced that this year's Macworld, which ended yesterday, would be its last. For the Macheads, that was bad enough, but there was worse: Mr Jobs would be giving it a miss and Phil Schiller, one of the company's senior vice presidents, would stand in for him. The news broke on Tuesday afternoon and, noted Philip Elmer-DeWitt in his Apple-watching column for Fortune, "by dawn Wednesday just about every reporter who follows the company had filed a story" - Google News alone listed 779.
It was, said Elmer-DeWitt, curious that Apple had delayed the announcement until only three weeks before the event. The news was enough to cause shares to fall seven per cent and for one analyst to downgrade the company. The next day, in a note to clients headed "One scare too many", Yair Reiner, of Oppenheimer & Co, wrote: "We don't know know why Steve Jobs has pulled out … Whatever the reason, the unexpected announcement has underscored the greatest risk to Apple's long-term success - its dependence on Jobs's health and its apparent lack of a succession plan."
Initially, Apple's line was that the company was "reaching more people in more ways than ever before, so like many companies, trade shows have become a very minor part of how Apple reaches its customers"; its stores, website and all-important iPhone allowed it "to directly reach more than a hundred million customers around the world in innovative new ways".
Mr Jobs's absence, however, was harder to explain and, in the end, the man himself was obliged to step forward in a bid to kill the rumours. On Monday, in an extraordinary open letter that began "Dear Apple Community", Mr Jobs told the world that for the first time in a decade, "I'm getting to spend the holiday season with my family, rather than intensely preparing for a Macworld keynote. Unfortunately, my decision to have Phil deliver the Macworld keynote set off another flurry of rumours about my health, with some even publishing stories of me on my deathbed." The obvious weight loss he had been suffering throughout 2008 "has been a mystery to me and my doctors. A few weeks ago, I decided that getting to the root cause of this and reversing it needed to become my #1 priority." Now his doctors thought they had found the cause: "a hormone imbalance that has been 'robbing' me of the proteins my body needs to be healthy … the remedy for this nutritional problem is relatively simple and straightforward". The lost weight, he predicted, would be back on by "late this spring" and he would continue as chief executive during his recovery. It was possible to detect a hint of irritation in his concluding remarks: "I have given more than my all to Apple for the past 11 years now. I will be the first one to step up and tell our board of directors if I can no longer continue to fulfil my duties as Apple's CEO. I hope the Apple community will support me in my recovery and know that I will always put what is best for Apple first."
It was thanks to Mr Jobs that Apple was hip from the start. Eschewing anything so boring and corporate as an office, Mr Jobs and co-founder Steve Wozniak approached the world of business more as nascent rock stars than corporate suits, leaving their jobs at Hewlett-Packard and Atari and, on All Fool's Day 1976, setting up shop in a garage. In 1977, Apple introduced the first mass-market personal computer - four years ahead of IBM - and in 1984 unveiled the original Macintosh, "the computer for the rest of us". Mr Jobs left Apple in 1985 but returned in 1997 as chief executive and a series of iconic developments followed, including the first iPod in 2001, the iTunes store in 2003 and, in 2007, the iPhone, which overnight, as The Industry Standard noted, "made everything else on the market look like a dinosaur".
Two years before his return, Mr Jobs, clearly chomping at the bit, had given one or two hints about what might lie ahead for his old firm. "You know, I've got a plan that could rescue Apple," he told Fortune in September 1995. "I can't say any more than that it's the perfect product and the perfect strategy for Apple. But nobody there will listen to me."
They have, however, listened ever since. Thanks in part to his performances at Macworld, Apple's legendary corporate "cool" has become inextricably linked with Mr Jobs. Each year at Macworld, Macheads looked forward to the Jobs tradition; saving the latest hip product for the end of his address, introduced with the catchphrase "One more thing…".
Perhaps it was just a slip of the tongue, but when it came to the big Jobs-style finale this week at the Moscone Center in San Francisco, stand-in Schiller introduced the humdrum news of a new three-tier pricing plan for iTunes with the words, "One last thing…". Following a Macworld where, for the first time in years, Apple unveiled very little that could be described as cool, it remains to be seen whether Mr Jobs's cri de coeur will be enough to prevent investors slinking away - notwithstanding the optimism of Tony Bennett, the legendary crooner, who closed the show with a performance of The Best is Yet to Come.
Apple, some fear, may have left its heart in the Moscone Center, San Francisco.
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