Comment: Did Jobs time his exit for the benefit of Apple?

Possibly Jobs felt he could alleviate the blow from nervous investors selling Apple shares because of his stepping down.

By DAVID SHAMAH
August 25, 2011 22:54
4 minute read.
Woman with iPhone

Woman with iPhone 311. (photo credit: Marc Israel Sellem/The Jerusalem Post)

 
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The resignation of Steve Jobs as Apple CEO was a “shock to the system,” but not an unexpected shock. The question isn’t why – it’s why now?

The answer to that is tied in with what Jobs means to Apple, and consumer product technology. It seems like eons ago, but we’re just approaching the tenth anniversary of the iPod, the product that kicked off an era of what can be called “celebrity technology,” in which product introductions became society changing events.

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Of course, companies have always tried to hawk their “new and improved” products as the cure for whatever ails you, whether it’s ring around the collar or unsightly cellulite. But in the case of Apple products, “society-changing” wasn’t just hype. Apple may not have invented the MP3 player or the smartphone, but by building an integrated “closed garden,” where you could download your music and smartphone apps directly from Apple with the click of a few buttons, Apple reformed in its own image not only the music player and cellphone business, but the entire music and software industry.

And by “Apple,” I mean Steve Jobs; anyone can make and sell music players and cellphones, but it’s that one in a million genius who can conceive of how the whole ecology would work – from ease-ofuse in the hardware, to negotiating deals with the music distributors and app writers, to figuring out the easiest way to get and use content.

And it’s not just me who thinks so; Amazon, Google (through its Android phonemaking partners), and Microsoft all have their own app stores and online music to- device services, or have tried to have them. Imitation is the sincerest form of flattery, after all – and the fact that the system that Jobs designed is the one everyone else is clamoring to duplicate says it all. And what Jobs did in the music and smartphone industries is again taking place before our eyes, right now, in the PC business; whatever the iPad morphs into, you can be sure it is going to take away major market share from laptop makers, and, of course, Microsoft (unless they somehow produce a version of the iPhone/iPad iOS operating system). Already just this week, the iPad drove another wouldbe competitor – HP – out of the tablet business, if not the PC business altogether!

Years ago, before the introduction of iTunes, I used a program (I forget the name) to listen to Internet radio on my old iMac. At some point, the program’s author sent out an e-mail to all registered users, saying that he was discontinuing updating the program because he wasn’t making enough money off it. The email described his attempts at raising money, and even described a meeting he had with Steve Jobs, in which he explained to Jobs just what his program did – and how he planned to improve it, by turning it into a “computerized jukebox,” which would let you set up playlists, download songs from the Internet, etc. In the message, the author describes the reaction of Jobs and other Apple execs – they looked at each other, giggled, and told the author “don’t do that, it’s probably not a good idea right now.” In other words, Jobs saw the future even before the first copy of iTunes was downloaded.

This piece sounds a bit like an obituary, but it isn’t – Jobs is still alive, although not well (the impetus for his resignation). And he will remain on as chairman of the board at Apple, which means that he’s likely to continue coming up with visionary products. Shares of Apple were down a bit Thursday, but they’re likely to bounce back, once investors get used to the idea of Tim Cook as CEO (which he actually has been, more or less, for the past eight months).

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The only question left, then, is why now – and my guess is that Jobs picked mid-August in order to reduce the impact on Apple stock; after all, many investors are on vacation, so it might take them a little more time to make buy and sell decisions, since they’re in a different “head.” Possibly Jobs felt that he could alleviate the blow from nervous investors selling Apple shares because of his stepping down. Based on the activity of Apple stock Thursday, that may have been a good guess.

But I believe there is a much more important reason Jobs chose to leave right now. We’re just a matter of weeks from the introduction of what may turn out to be the most in-demand smartphone in history; according to many sources (i.e. the reliable rumor mills), the iPhone 5 is set to be released in early- to mid- September.

And that is likely to be a retail event the likes of which we have not seen in a while. A recent poll by the Pricegrabber price comparison website says that 35 percent of US consumers plan to buy an iPhone 5 before the end of the year (http://goo.gl/rxVXQ). That’s 35% of all US consumers, not just current iPhone users! If correct, that means there will be something like 75 million people lining up to buy an iPhone 5! Okay, that sounds like an exaggeration, but even if they sell 10 million of the things in the first month or so (not unlikely, since Apple sold a million and a half iPhone 4’s on the first day they were available), investors – and consumers – will likely forget all about Wednesday’s news, and sending Apple share prices soaring to yet greater heights. Leaving Steve out of the picture – but laughing all the way to the bank!

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