Apple: A kingdom without its king

OPINION: Can the biggest consumer electronics empire of them all manage without Steve Jobs?
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There are few companies out there that garner the level of divisiveness Apple does. Most people struggle to muster the level of emotion, positive or negative, that so underpins Steve Jobs’ consumer electronics empire within the wider tech space.

People – especially the general public – don’t ‘love’ other electronics like they do the iPhone. The backlash from non-Apple fans on message boards across cyberspace is similarly unique – you rarely see this vitriol bubbling up over other brands.

Part of this is because Steve Jobs doesn’t really carry himself like a normal CEO. Certainly not a CEO of the richest firm in the world.

When Apple launches a new product, Steve Jobs does it in person. Large and in charge, and with a level of charisma rivals barely even try to match. At Apple launches ‘cool’ is a perfectly acceptable product feature to highlight.

Share and share alike

It could be argued Steve Jobs is as much a brand as Apple is.

It therefore comes as no surprise that his departure from the firm, announced this morning, has generated the kind of emotive responses not normally associated with corporate reshuffles.

As well as an outpouring from the army of Apple fans, even rival CEOs such as Sony’s Howard Stringer lavished significant praise on the man upon the announcement on his departure.

The defining aspect of Jobs’ premiership has been investors' tendency to view Steve Jobs and Apple as the same thing. When he announced medical leave a couple of years ago, Apple’s share prices plummeted.

So predictably upon today’s announcement of his departure, Apple’s shares dropped 5.3 per cent.

Enemy at the gates

There are some money men that apparently feel Apple without Jobs is a less of a horse worth backing. And it doesn’t stop at the Cupertino firm itself. Asian manufacturers which make components for Apple products, such as Wintek and Foxconn-owned Hon Hai had share price hits this morning as well.

Furthermore, its rivals in various sectors have enjoyed an increase in confidence. Samsung, LG, Sony, and Lenovo all clocked share hikes at the news, presumably representing a belief they will now be able to more effectively compete with Apple.

And it’s not just the wisdom of shareholders that point to this supposition. Many analysts have been quick to hail this as a huge opportunity for rivals to start snapping at Apple’s market share.

"For handset makers it is a welcome relief – their most formidable opponent and nemesis has retired," said Francis Lun, managing director of Hong Kong financial services firm Lyncean Holdings.

If HP had stuck around in the smartphone and tablet market for more than five minutes, it might now have deemed it a battle worth fighting.

A kingdom without a king

The implication seems to be that from some quarters there is a belief Apple is now going to be a less effective operation without Steve Jobs running things day to day.

By proxy, it can also be inferred that Jobs is seen as the primary driver for innovation that has led Apple to its globe-straddling position.

Remove Jobs from the equation, and you remove Apple’s magic fairy dust that has made it bullet proof in most of the sectors it has decided to colonise.

But it’s not like Apple has never lived without Jobs. A quick history of Jobs' relationship with Apple reveals the two brands were actively at odds at times.

Casual observers of the tech market and many of the millions of iPhone fans may be surprised to know how old Apple actually is. Jobs co-founded the firm in 1976 with Steve Wozniak and Ronald Wayne. One of the pioneers of the personal computer revolution, the firm famously hit mainstream attention with the 1984 ‘big brother’ inspired advert for the Macintosh, aired at the prestigious Super Bowl platform.

Around this time Jobs poached John Sculley from Pepsi-Cola to become Apple's CEO, famously asking him: "Do you want to sell sugar water for the rest of your life, or do you want to come with me and change the world?

But the relationship with Sculley eventually became tumultuous, to say the least. After a massive slump in the fledgling PC market, a power struggle between the two ripped through Apple in 1985. In the end Sculley, backed by a shareholder board wary of Jobs’ tendency to invest money in untested markets, managed to remove his rival from all managerial duties.

Jobs quit the firm, and founded his own computer company NeXT. Over the next few years, Apple ran without Jobs, who had mixed successes with his new firm – eventually abandoning a struggling hardware business to concentrate on software.

Jobs' return to Apple wasn’t until 1996, and was actually facilitated by the firm buying NeXT. The then Apple CEO Gil Amelio was ousted and replaced by Jobs – creating the unusual situation of the boss of the bought firm taking over the reins of the buyer.

And it might not have been quite the messianic return its often painted as – Jobs’ first task was to make dramatic cuts to Apple’s operation in order to boost profitability, meaning job cuts as well as scrapped projects like Newton and Cyberdog.

The point is, Apple hasn’t always had Steve Jobs at the helm, even if its most profitable years have been with him there. And he’ll still be chairman of the board, and presumably have influence on creative direction, being so highly regarded. He’s hardly screwing all the iPods together himself now anyway.

Innovation or litigation?

And anyway, if protecting its market share is the issue, Apple hasn’t just been relying on its innovation to win battles these days.

Apple increasingly seems like it's relying on its lawyers to hold back the competition, as much as it has been producing superior products. It’s been particularly devastating to Samsung – which today has had its Galaxy phones banned in the EU following a patent battle.

It’s by no means alone in dragging rivals through the courts. There’s nothing these giant tech firms like more than launching a full scale legal punch up over an 85-year-old patent.

But this new side of Apple has done something to dent its fluffy, underdog image (that was frankly ridiculous in a time when it has more cash to spend than the US treasury).

If rivals like Samsung and Sony do decide to step up efforts to break the iPhone and iPad’s dominance, we could well see many more of these types of patent court cases, as Apple looks to defend border incursions on its vast empire.

Another outcome – and this is the author’s pure speculation – is more corporation with rivals. Samsung, after all, does make many of the components that go into Apple gizmos. Tim Cook, who takes over as CEO, apparently worked with component suppliers much closer than Jobs ever did – maybe we could see a less fervently competitive era, as volatile, fledgling markets such as the tablet segment settle down.

Corporate realities

Only a fool would assert that Apple – the biggest consumer electronic empire in history – will crumble now its King has given up his throne. It’s survived without him before.

But for a brand that has for years been so intertwined with Steve Jobs himself, his stepping down is bound to cause disruption. There’s a strong argument that having a celebrity at the front of Apple has helped personify it somewhat, to make it seem less cold and corporate. Certainly Apple played on this during the height of its rivalry with Microsoft.

The firm courted emotion and human responses in its rise to success. It wanted you to feel something about Apple, not just to buy its products. And it’s tough to see people taking to this philosophy without the human face Jobs gave the firm.

But the celebrity king is gone now, and the world will have to reappraise how it feels about a tech company that suddenly looks much more like the corporate multinational it really is.

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