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How Will Apple's New CEO Fare?

How Will Apple Do Without Steve JobsThe question is as enigmatic as the man himself: How will Apple do without Steve Jobs at the helm? BNET's Erik Sherman thinks Jobs will take the magic with him. A couple of years ago, industry pundit John Dvorak wrote, "Apple without Steve Jobs is Sony."
Are they right? Good question. Years ago, I was inclined to agree with Dvorak, although I concluded that it would take roughly 5 to 7 years for the Steve Jobs magic to wear off. In case you're wondering, here's what Dvorak had to say at the time:

At some point, Apple becomes like a John Wayne movie with no John Wayne. You begin to notice something is missing.

In the case of Steve Jobs, it is a maniacal ability to find what isn't there but should be, combined with an outrageous sense of aesthetic attractiveness.

Who but Jobs would have found that hi-resolution touch screen used on the iPhone? That came out of left field, to say the least. Now every device maker uses them.

Jobs force-fit the iPod into a market that was moribund with various MP3 players but without any raw appeal.

Apple without Steve Jobs is Sony.

On the other hand, since researching and writing 10 Ways to Think Different - Inside Apple's Cult-Like Culture, I've come to realize that Jobs - in his characteristic controlling style and attention to detail - has sort of infused a new way of thinking and doing things into Apple's culture.

And that thought process or operating methodology - for lack of better terms - is now baked into the company in a way that can indeed live on without Jobs, although much of that depends on new chief Tim Cook and the rest of Apple's management team.

Cook alluded to that unique Apple culture in an internal email to Apple employees:

I want you to be confident that Apple is not going to change. I cherish and celebrate Apple's unique principles and values. Steve built a company and culture that is unlike any other in the world and we are going to stay true to that-it is in our DNA. We are going to continue to make the best products in the world that delight our customers and make our employees incredibly proud of what they do.
Despite Cook's promise, things are going to change. They have to change. The question is will they change in a way that materially impacts Apple's continuing ability to innovate breakthrough products? Asked another way, how will Apple do without Steve Jobs at the helm?

Well, here's my take on that: the 10 key factors that will determine Apple's future without Jobs. For a reasonably quantitative analysis, I used, as a metric, each factor's reliance on Steve Jobs, going forward (on a scale of 1 to 10, with 10 being the highest reliance).

For the record, although Jobs remains chairman, I assumed his influence would be minimal. Otherwise, what's the point of asking and answering the question, n'est pas?

How Will Apple Do Without Steve Jobs?

  1. Leadership. Let's not over-think this. The iconic CEO who brought the company he founded back from the brink to become the most valuable company in America is gone. While I do believe Jobs has built a culture like no other and left Apple in the capable hands of Cook - an operating genius - and an extraordinary management team, a lot depends on Cook's ability to lead, retain, and attract that talent. The loss will be hugely impactful no matter how you spin it. (Reliance Factor: 9)
  2. Comparisons. When it comes to real-world analysis, we gain insight from similar situations. How has IBM fared since Lou Gerstner's famed turnaround? Extremely well. The same goes for Intel since Andy Grove retired. As for GE after Jack Welch - not so well. How will Oracle do without Larry Ellison? Cisco without John Chambers? I think it depends entirely on the talent of those who take the reigns. Cook was a no-brainer, IMO. (Reliance Factor: 5)
  3. Operations. Speaking of Cook, operations is his thing and Apple's got the most efficient and cost-effective manufacturing supply chain in the history of the electronics industry. And, in a throwback to the good old days of vertically-integrated computer companies, everything important is under one roof: industrial design, operating system, hardware design, even the sales channel. What makes that possible is that Apple focuses on far fewer products than conventional consumer electronics companies. (Reliance Factor: 0)
  4. The Think Different mindset. Apple doesn't do anything according to anyone else's timetable. Its product launches and company events happen when it suits Apple. It even shuns the venerable Consumer Electronics Show. Apple follows the beat of its own drum. How things should be done or are done elsewhere don't count. Jobs may have shown the way, as he said at a Stanford University commencement speech, "Don't let the noise of others' opinions drown out your own inner voice," but that legacy is now largely part of the company. (Reliance Factor: 3)
  5. The iconic designs. Nothing is more identifiable as uniquely Apple as its iconic product designs. According to the New York Times, Jobs is named in 313 Apple patents, from the glass staircases in Apple stores to cardboard packaging and, of course, the design of Apple's products themselves. "Mr. Jobs's say over the minute details of Apple's products is legendary in Silicon Valley. A look at the patents that carry his name ... paints a picture of a roll-up-your-sleeves chief executive whose design choices reached into every corner of the company." I think that's overstated. Jonathan Ive, head of industrial design, has been the principle visionary behind the design of all Apple's products for the past 14 years. (Reliance Factor: 4)
  6. Product lineup. If you just look at Apple's existing product lineup, assuming the company can continue to execute on new versions, the room for growth is staggering. The Mac has only 10 percent share of the U.S. PC market and half that internationally. iPad is still in the early stage of product adoption. Even iPhone has a long way to go as smartphones eat away at the broad cell phone market. Then there's iPod / iTunes and the next frontier: the living room. That said, there is no way of measuring the impact of Jobs's absence on future products. (Reliance Factor: 3)
  7. Insanely great marketing. Marketing is the Achilles heel of the technology industry and, if nothing else, Jobs is a marketing genius. Apple spends a great deal of effort divining the next big thing - figuring out what people want - even when they don't know it themselves. They don't use focus groups or research. They're their own focus group. How much of that is Jobs himself, I'm not really sure. Probably a lot, but maybe not as much as people think. (Reliance Factor: 7)
  8. The buzz. Few companies truly get communications and PR the way Apple does. A big part of its formula for creating a buzz like no other company is its famous secretiveness. Considering the sheer number of people, companies, and news outlets that would give anything for a tip, virtually nothing leaks until Apple's ready to spill it - the occasional iPhone prototype left on a bar-stool notwithstanding. While that surely began with Jobs, it's now part of the company. Personally, I don't think Jobs's famed showmanship or reality distortion field is that critical to the buzz, at this point. (Reliance Factor: 4)
  9. The sales channel. From its direct and channel pricing strategy to its retail and online storefronts, Apple sells its products like no other company in the consumer electronics space. If you know how the channel works, you know this is by no means an easy trick. Apple's retail and online storefronts are unique, it never discounts direct, it keeps reseller prices stable, and it positions its products as unique categories. And it works, big-time. Sure, that can change, but it's largely independent of Jobs. (Reliance Factor: 1)
  10. The organization. The way Apple operates today is not some grand design by Jobs or his management team. They found their way one step at a time. And the way Apple's currently organized - in a hierarchically flat structure for a company its size - it can rapidly adapt to new ideas or processes that work. After decades of single-digit market share, the iPod / iTunes breakthrough provided a winning formula that Apple's replicated with the iPhone and iPad. (Reliance Factor: 2)
Bottom line
If you average all that out, you get a Steve Jobs Reliance Factor of 3.8 out of 10.
What does that mean? Here's how I interpret the results. First, I don't think investors or customers will notice anything different for a good many years. In other words, I'd say the company's got a reasonably good chance of continuing to kick butt in the market for the foreseeable future.

Internally, things are likely to change, despite Cook's statement to the contrary. But you know, those changes could be good or bad. And while the odds that those changes will negatively impact Apple's products aren't negligible, they're better than average, as someone once said.

Overall, I think Apple has a solid foundation as the most powerful and influential technology company on the planet. It has a unique culture, but one that Steve Jobs built to last, as he knew this day would surely come for some time now.

The company will of course continue to slowly evolve over time, just as it has for the past decade or so. But you know, that would be true in any case, with or without Jobs at the helm. Nothing lasts forever, that's for sure.

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