Apple lacking lustre without its guru

The last time Steve Jobs let go of Apple's reins, the company lost all sense of direction as the bean counters took over and failed.That was at the dawn of the personal computer (PC) era in 1985, and since Mr Jobs's dramatic return to Apple in 1996 the company has prospered. Its share price has risen from about US$6.25 at the end of 1996 to today's level of about $377. Apple shares quickly steadied after initially falling by about 5 per cent in the aftermath of the news that Mr Jobs would be resigning from his role as chief executive because of illness and take a back seat as company chairman. Analysts generally agree that the company's strategy is now already set."In the short-to-medium term, it is unlikely that Steve Jobs's resignation will have a significant impact on the company's future," says Nick Dillon, an analyst at Ovum, the international research company. "In fact, Steve Jobs has had little to do with the day-to-day management of Apple since January of this year, and this will have already been factored into the company's share price."But the markets got it wrong the last time Mr Jobs left Apple. Back in 1985, the Apple co-founder was not seen as the technology guru he is today. Market analysts generally regarded him as little more than a latter-day Californian hippy. Institutional investors held the view that although Mr Jobs had done a tremendous job of taking the PC from his garage to the general public, he was not equipped to lead a big international corporation.However, after his return in 1996, the company celebrated triumph after triumph. In 2001, Apple redefined not only consumer electronics with the iPod portable music player, but also turned the entire music industry on its head with the introduction of iTunes, the online music service.Apple then went on to produce the iPhone, a device that was destined to bring Nokia, the world's leading phone maker, to its knees. More recently, Apple created the iPad, an innovative tablet computer that is making major inroads into the traditional PC market. Throughout this entire period, Mr Jobs also made sure that Apple's high-priced desktop computers and laptops were perceived as the sleek sports cars of digital electronics. Stock analysts are now in danger of making the same mistake they did more than a quarter of a century after Mr Jobs was originally ousted from Apple. By viewing the Apple corporation in the same way that they might regard a traditional manufacturing company, there is a tendency for the market to downplay the contribution made by a visionary chief executive such as Mr Jobs. However, some industry analysts are now beginning to admit that the culture of personality that defined Apple for so long under Mr Jobs's leadership has left Apple investors with a distinct lack of transparency."Apple is a very closed company, and so it is impossible to say with certainty what is actually happening in the wake of Steve Jobs's resignation, but the market expects Apple to have moved executives into key roles to close any strategic gaps left in the charismatic former chief executive's wake," Mr Dillon says.However, Apple's main strategic gap may well turn out to be the absence of Mr Jobs's unique perspective on the IT industry. A product of California's 1960s counter-culture, he never lost sight of the need to keep electronics products fun in an era when Apple's rivals were still confusing consumers with clunky and hard-to-use products such as the early MP3 portable digital music players. "There had been MP3 devices from the likes of Creative, but Steve Jobs changed the world - made us realise what a cool device connected to a cool service could do," says Josh Bernoff, an analyst for Forrester, the research company.Mr Jobs's ability to connect with customers continues to define Apple's success and is tipped to continue to do so for the next few years. "Steve Jobs defined Apple as a company that creates user-friendly products with attractive designs, in contrast to some other electronics manufacturers who try to sell unrefined and complex technologies to the public," Mr Dillon says.He says Apple's products road map is more or less set for the next two to three years after Mr Jobs's departure. The challenge now facing Apple is what will happen when the momentum originally supplied by its visionary co-founder is finally exhausted.One year's innovation in the technology industry is the equivalent of a decade in more traditional industries, and it is likely that Apple will soon find itself not only keeping place with new technologies but also with rival low-priced manufacturers from emerging markets such as China.Without Mr Jobs in the saddle, the hurdles Apple now faces may soon be too high for many investors' comfort.