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How Will Steve Jobs’ Latest Hiatus Affect Apple, Tech World?

January 18, 2011 at 3:51 PM EDT
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Apple co-founder Steve Jobs announced his third medical leave in the past decade, a year and a half after he returned following a liver transplant. Gwen Ifill talks with Troy Wolverton, who covers technology for the San Jose Mercury News, about why his latest departure could have such a significant impact on the business world.

GWEN IFILL: Now, a CEO’s departure and its potential impact.

Apple co-founder Steve Jobs’ announcement that he will step aside because of health issues, his third such leave in less than a decade, has shaken the business world. The man behind products like the iPhone and the iPad didn’t disclose the details of his illness, but he survived pancreatic cancer in 2004 and a liver transplant in 2009.

In his only public statement on the matter, Jobs said he is leaving “so I can focus on my health. I will continue as CEO and be involved in major strategic decisions for the company. I love Apple so much and hope to be back as soon as I can.”

Joining us to explain why everyone’s watching this so closely is Troy Wolverton, who covers the tech world for The San Jose Mercury News.

Troy, I want to start out with the news this afternoon, which is that Apple apparently did a bang-up job in sales in the last quarter and broke its own records.

TROY WOLVERTON, The San Jose Mercury News: Yes, they did phenomenally well, Gwen.

They sold a record number of iPads. They basically sold as many iPads last quarter, during the holiday quarter, as they had sold in the previous two quarters since they released the iPad. They also sold a record number of iPhones, 16.2 million. And they sold a record number of Mac computers, which is probably the most impressive things, given how long the Mac has been on the market.

GWEN IFILL: With that kind of news coming out of Apple, why did we hear this not-so-good news yesterday?

TROY WOLVERTON: Well, the timing, of course, has to do with Steve Jobs and how his health is doing.

In terms of the not-so-good news, whether — and how people are reacting to it, you know, I think that people are concerned about, not necessarily the short-term impact for Apple but the long-term impact of Steve Jobs not being with the company.

GWEN IFILL: Do people consider, people in the industry consider that the health of the company depends on the health of Steve Jobs? Is it so intricately tied up in this one guy?

TROY WOLVERTON: Well, that’s kind of the, I guess, the myth maybe. Steve Jobs is Apple, in many — in many people’s minds anyway.

He has been solely identified with or the embodiment of the — Apple’s resurrection. I mean, when he came back to Apple in 1996, 1997, Apple was darn near in bankruptcy. It was about a month or so, according to certain accounts, from actually filing bankruptcy papers.

And Apple now is the second-most valuable company in the world, after Exxon Mobil. He’s done a phenomenal job, if you just look at just that — those statistics. So, Jobs gets a lot of credit for that rebound. And people are concerned about what that means if he’s no longer with the company.

He’s seen as not only this guy who was a phenomenal business leader that led this turnaround but a visionary for the company who led the developments of the products such as the iPad and the iPhone that have captured mainstream America. And he’s seen as a guy — a tough negotiator, somebody who can walk into the room with the bigwigs of Hollywood and get deals done.

He’s seen as a very — as being very intricate to the success of Apple.

GWEN IFILL: But he has stepped aside before. What happened when that happened before? What happened to Apple when he was gone in 2004 and 2009?

TROY WOLVERTON: Well, in 2004, his departure from the company wasn’t so much of a departure. In fact, it wasn’t really widely known that he wasn’t with the company.

In 2009, he made a very public departure from the company, stepped away from the company for about six or seven months. The company did very well in his absence. It was being managed on a day-to-day basis by Tim Cook, who’s the company’s chief operating officer. And the company did very well.

GWEN IFILL: Tell us about Tim Cook. Who is he, and how did he keep the company rolling when Steve Jobs wasn’t there?

TROY WOLVERTON: So, Tim Cook is a — he come from Compaq. He’s been with the company for something like 10 years, at — at Apple.

He is known to be very good at operations, at making sure that the trains run on time. He’s known to be a very good negotiator in negotiating with Apple suppliers. He is a very competent, very good business manager.

GWEN IFILL: So, what kind of a business manager is Steve Jobs in terms of hands-on development? It’s one thing to have a CEO who kind of sits in a corner office and oversee things.

But is he the kind of guy who was actually saying, this is what the size of the iPad should be; this is what the next generation of the iPhone should look like?

TROY WOLVERTON: Yes, exactly.

Jobs has played kind of this dual role. He plays kind of the big-picture role at Apple, where he takes a look at kind of the visionary products and the marketing. But he also is known for getting down and dirty with many of the products at Apple.

You know, my sources tell me that he has something like 10 things on his plate at any one time. And he approves on a very minute basis very small details about those products and insists on certain design aesthetics of those products. He makes sure that certain things look the way they look.

And, you know, if a product doesn’t — a product that is within that purview doesn’t meet his specifications, it goes back to the drawing board or back for improvements.

GWEN IFILL: Is it fair to assume that nobody tonight really knows what’s wrong with his health this time?

TROY WOLVERTON: Well, it’s fair to assume that nobody outside of his immediate family and close circle knows exactly what’s going on with him, yes.

GWEN IFILL: So, what does it mean that, this time when he announced when he was leaving, he didn’t say — I think, last time, he said, “I will be back in six months.” This time, there was kind of an open-ended description of his departure.

TROY WOLVERTON: Right. I think he said something like, “I hope to be back at the company.”

You know, it’s anybody’s guess to — to know what that means. You know, at some point, it starts to get into Kremlinology, I guess. But I think that what it does mean is you kind of have to take him at his word that he does like — would like to be back at Apple, but he doesn’t know exactly what his return is going to look like.

By all accounts, he is suffering from, you know, serious health problems, and he wants to spend some time with his family and — and heal up.

GWEN IFILL: And, as far as we know, with the kind of numbers we saw come out of Apple today, Apple itself is in a fairly strong position to, at least for now, get by without him?

TROY WOLVERTON: Yes. I think that the assessment of Apple from analysts and people who watch the company closely and former insiders is that the company has — you know, not only — people like to talk about having a deep bench. They have got a lot of very good and strong and competent executives at the company.

But, perhaps more importantly, they have a very deep list of products in development, and they have some very strong technology that can be built upon. And they have a very strong market presence.


TROY WOLVERTON: You know, a source of mine basically said, you know, they could put this thing on autopilot, and it would do well for — for quite a while.

GWEN IFILL: All right, Troy Wolverton of The San Jose Mercury News, thank you so much.