Death of Steve Jobs Leaves Apple Without Its Muse

With the death of Steve Jobs, Apple Inc. (Nasdaq: AAPL) must now devise products without any guidance from the man whose vision built the company into the tech powerhouse it is today.

Though Jobs stepped down as CEO of Apple in August, he stayed on with the company as chairman of the board.

Now Apple will have to rely on a corporate culture modeled on his personality and the acumen of current CEO Tim Cook..

Needless to say, Cook has enormous shoes to fill.

Jobs helped Apple's share price climb to $373 - a 9,020% gain since 1997 when he was named interim CEO. Back in August, Apple's market capitalization grew to $337.17 billion and it briefly displaced Exxon Mobil Corp. (NYSE:XOM) as the most world's largest company, but was unable to hold the lead.

"So far Tim Cook's move to CEO has been flawless, not surprising given Jobs groomed him for five years to take the role," Gene Munster, an analyst at Piper Jaffray & Co. (NYSE: PJC), told The Wall Street Journal.

Still, as capable as Cook may be, Jobs' "magic man" presence is irreplaceable.

"I believe the top is in for Apple and it will become a more "normal' company in the future," said Money Morning Global Macro Trends Specialist Jack Barnes. "Steve was an edge they cannot replace. While the company is rich and profitable, it has lost its prophet."

Ironically, Wall Street had little reaction to the death of Steve Jobs, with Apple stock essentially trading along with the market. News or rumors of Jobs' illnesses caused the stock to plummet consistently after he revealed he had pancreatic cancer in 2004.

Steve Jobs' Irreplaceable Creative Force

Despite the knowledge that Jobs was gravely ill, news of his death nevertheless stunned the world and elicited tributes from friends and rivals alike.

"The world rarely sees someone who has had the profound impact Steve has had, the effects of which will be felt for many generations to come," said Microsoft Corp. (Nasdaq: MSFT) co-founder Bill Gates in a statement.

Jobs' personality and demanding management style -- paired with his creative genius -- are what vaulted Apple to the innovative tech leader it's become.

Perhaps the hardest loss for Apple will be Jobs' intuition - his ability to envision products that consumers will want to buy before they even realize they want them.

His list of hits include the Macintosh computer and its innovative operating system, the iPod, the iTunes Store, the iPhone and the iPad. Just as amazing as the success of those Apple products is how they transformed entire industries.

"The big thing about Steve Jobs is not his genius or his charisma but his extraordinary risk-taking," Alan Deutschman, who wrote a biography of Jobs, told The New York Times. "Apple has been so innovative because Jobs takes major risks, which is rare in corporate America. He doesn't market-test anything. It's all his own judgment and perfectionism and gut."

Now that job lies with Cook. While Cook's operational capabilities are superb, few believe he has Jobs' creative force.For Apple to continue to thrive, Cook will need to rely on other top managers who will need to supply the vision he lacks.

"I'm not sure he'd be able to replace Steve's design creativity," Michel Mayer, former CEO of Freescale Semiconductor, told CNNMoney in 2008. "Then again, I could argue that it's not the role of the next CEO to do that."

Cook's Credentials

Cook filled in for Jobs during his medical absences, stepping up from the COO role he landed in 2005. The 13-year Apple veteran is known as being just as obsessive and detail-oriented about his work as Jobs.

As COO Cook successfully used his operational acumen to streamline Apple's supply chain and save the company billions of dollars. He closed factories and warehouses and drastically cut inventory. While his cost-reduction skills aren't as exciting and well-publicized as Jobs' design and marketing talent, they're a major factor in Apple's profitability.

Cook has a broader reach in Apple than any other top executive; he deals with operations, sales, customer support and negotiations with wireless carriers. He also has the work ethic needed to carry a behemoth like Apple. Cook is known for being the first one in the office and last one out, for working every weekend, and for fueling up with energy bars to withstand marathon meetings.

Though he lacks the legendary Steve Jobs intuition and sense of showmanship, Cook does share Jobs' drive for getting things right.

He'll need to rely on that instinct, as well as the skills of his management team, to keep Apple churning out hit products.

For the near future, the Apple product pipeline will have Jobs' fingerprints on it, but in the long-term, it will be up to Cook and his team to make the right calls.

"The next 12-24 months are still Jobs' products, but 36 months from now is the challenge," said Money Morning Chief Investment Strategist Keith Fitz-Gerald.

Rivals Covet Apple's Crown

With the death of Steve Jobs, frustrated tech rivals have reason to hope that Apple will become less of a juggernaut.

Samsung Electronics' smartphone and tablet computers, which run on Google Inc.'s (Nasdaq:GOOG) Android operating system, could be Apple's main competition.

"Even before Steve Jobs' (resignation), Samsung was getting more and more optimistic that they can actually take on Apple in the smartphone arena," Mark Newman, senior analyst at Sanford C. Bernstein and former director of strategy at Samsung,told Reuters. "The game is really now Samsung's to lose...They are picking up market share because of the change in dynamics in the smartphone industry."

Samsung's smartphone sales grew 500% in the second quarter, and it just released four cheaper smartphone models to attract emerging-market customers.

Another competitor that could challenge Apple is HTC Corp. The Taiwan-based electronics company has had its innovative touch compared to Apple's and has seen sales soar in recent quarters.

While Apple's iPhone and iPad products position it to do well in the post-PC era, whether it will remain king of the tech world in the future will depend on how well it emulates a Steve Jobs-led Apple.

"Losing a visionary is really hard," Brian Barish, president of Cambiar Investors LLC, told Bloomberg News. "The open-ended question is whether Apple is going to have the vision to continue to develop its market position. Sometimes companies lose their visionary and they continue to successfully do what they've done in the past, but any changes in the paradigm are harder."

News and Related Story Links:

• Money Morning:
  Apple Inc. (Nasdaq: AAPL) to Unveil New iCloud Service With Special Appearance by CEO Steve Jobs
• Money Morning:
  Apple Inc. Surges Ahead of ExxonMobil to Become World's Most Valuable Company
• USA Today:
  Steve Jobs, Apple co-founder, dies
• The Wall Street Journal:
  Steven Paul Jobs, 1955-2011
• Reuters:
  Apple's lead over rivals could narrow without Jobs
• The Wall Street Journal:
  Jobs Quits as Apple CEO
• The New York Times:
  Jobs Steps Down at Apple, Saying He Can't Meet Duties

David Zeiler

About the Author

Browse David's articles | View David's research services

David Zeiler, Associate Editor for Money Morning at Money Map Press, has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.

Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.

Dave has a BA in English and Mass Communications from Loyola University Maryland.

… Read full bio