SAN FRANCISCO/LOS ANGELES - Steve Jobs resigned as CEO of Apple Inc on Wednesday and passed the reins to his right-hand man Tim Cook, saying he could no longer fulfill the duties in a stunning announcement that raised fears his health has deteriorated further.

By (Reuters)

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Published: Thu 25 Aug 2011, 9:17 AM

Last updated: Tue 7 Apr 2015, 10:01 AM

Jobs, who fought and survived a rare form of pancreatic cancer and revolutionized the technology arena with the iPhone and the iPad in the past four years, is deemed the heart and soul of a company that recently briefly became the most valuable in America.

“I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know. Unfortunately, that day has come,” Jobs, who becomes chairman, said in a brief letter announcing his resignation.

The letter and a separate terse, somewhat cryptic statement from Apple raised more questions than it answered about Jobs’ health and the future of the company.

While it’s unlikely that his departure as CEO will derail Apple’s ambitious product-launch roadmap in the near term, there are concerns about whether the company would be as creative beyond the next year or so without its founder and visionary at the helm.

That is why Apple’s stock dropped as much as 7 percent in after-hours trading when Jobs’ departure was announced.

In the company statement, Apple co-lead director Art Levinson on behalf of the board praised Jobs’ “extraordinary vision and leadership” and “countless contributions to Apple’s success”, saying he would continue to serve the company with “unique insights, creativity and inspiration.”

However, the statement, which also talked about Cook’s outstanding performance, said nothing about Jobs’ health.

His battle with pancreatic cancer, which has stretched over several years, has been of deep concern to Apple fans, investors and the company’s board. Over the past two years, even board members have confided to friends their concern that Jobs, in his quest for privacy, wasn’t being forthcoming with directors about the true condition of his health.

Jobs has been on medical leave since Jan. 17, with his duties being filled by Cook, who was chief operating officer.

Some industry insiders privately expressed concern Jobs’ relinquishing the CEO position was a clear signal he was too ill to keep up its punishing pace.

The 55-year-old Jobs had briefly emerged from his medical leave in March to unveil the latest version of the iPad and later to attend a dinner hosted by President Barack Obama for technology leaders in Silicon Valley. But his often-gaunt appearance had sparked questions about how bad his illness is and his ability to continue at Apple.

In each of Jobs’ three health-related absences, Cook has taken over the helm. But the 50-year-old Alabama native, a former Compaq executive and an acknowledged master of supply-chain management, remains largely untested in Wall Street’s view.

That’s partly why, despite Cook being viewed as a safe bet to run Apple’s sprawling empire, some still think his boss will be very badly missed.

One Silicon Valley CEO, who declined to be identified because of the sensitive issues involved, said the tone of Jobs’ statement indicated his health might be worse than publicly known. The Apple chieftain has earned a reputation for commanding every aspect of operations — from day-to-day running to broad strategic decisions — suggesting he would not give up the job if he had a choice.

“It’s really sad,” the CEO told Reuters. “No one is looking at this as a business thing, but as a human thing. No one thinks that Steve is just stepping aside because he just doesn’t want to be CEO of Apple anymore.”

“It feels like another shoe is going to drop.”

Again, deep bench

While Jobs did not give details on the state of his health, oncologists who have not treated the Apple founder said he could be facing several problems tied to his rare form of pancreatic cancer and subsequent liver transplant. They include possible hormone imbalances or a recurrence of cancer that is harder to fight once the body has already been weakened

His resignation certainly marks the end of an era at Apple.

A college dropout, a Buddhist and a son of adoptive parents, he started Apple Computer with friend Steve Wozniak in in the late 1970s.

The company soon introduced the Apple 1 computer. But it was the Apple II that became a huge success and gave Apple its position as a critical player in the then-nascent PC industry, culminating in a 1980 IPO that made Jobs a multimillionaire.

Despite the subsequent success of the Mac, Jobs’ relationship with internal management soured, and in 1985 the board removed most of his powers and he left the company, selling all but one share of his Apple holdings.

Apple’s fortunes waned after that. However, its purchase of NeXT — the computer company Jobs founded after leaving Apple — in 1997 brought him back into the fold. Later that year, he became interim CEO and in 2000, the company dropped “interim” from his title.

“Steve Jobs is the most successful CEO in the US of the last 25 years,” Google Inc Chairman Eric Schmidt said in a statement. “He uniquely combined an artists touch and an engineers vision to build an extraordinary company.. one of the greatest American leaders in history.”

Some Apple fans took to social media to express their reaction in crudely poetic, though somewhat poignant, terms. One Apple fan from Denmark posted on Facebook: “Good Job. I just ate an Apple. It was bittersweet. Guess I’ll just have to Cook it from now on.”

Analysts again expressed confidence in the Apple bench, headed by supply-chain maven Cook.

“I will say to investors: don’t panic and remain calm, it’s the right thing to do. Steve will be chairman and Cook is CEO,” said BGC Financial analyst Colin Gillis.

On Wednesday, Apple shares slid to $357.40 in extended trading after a brief halt. They had gained 0.7 percent to close at $376.18 on the Nasdaq.

“Investors are very comfortable with Tim Cook even though Jobs has been a driver of innovation and clearly an Apple success. Tim has shown Apple can still outperform extremely well when he’s been acting as CEO,” said Cross Research analyst Shannon Cross.

Apple previously did not have a chairman, but had two independent co-lead directors. In his letter, which was addressed to the Apple board and the Apple community, Jobs said: “I hereby resign as CEO of Apple. I would like to serve, if the Board sees fit, as Chairman of the Board, director and Apple employee.”

They did see fit.

A chronology of Steve Jobs at Apple

Some key dates from the life and work of Steve Jobs, co-founder of Apple Inc., who resigned Wednesday as CEO.

1955: Stephen Paul Jobs is born on Feb. 24.

1972: Jobs enrolls in Reed College in Portland, Oregon, but drops out after a semester.

1974: Jobs works for video game maker Atari and attends meetings of the Homebrew Computer Club with Steve Wozniak, a high school friend who was a few years older.

1976: Apple Computer is formed on April Fools’ Day, shortly after Wozniak and Jobs create a new computer circuit board in a Silicon Valley garage. The Apple I computer goes on sale by the summer for $666.66.

1977: Apple is incorporated by its founders and a group of venture capitalists. It unveils Apple II, the first personal computer to generate color graphics. Sales soar to the rate of $1 million a year.

1978: Jobs’ daughter Lisa is born to girlfriend Chrisann Brennan.

1979: Jobs visits Xerox PARC and is inspired by a computer with a graphical user interface.

1980: Apple goes public, raising $110 million in one of the biggest initial public offerings to date.

1982: Annual sales climb to $1 billion.

1983: The Lisa computer goes on sale with much fanfare, only to be pulled two years later. Steve Jobs lures John Sculley away from Pepsico Inc. to serve as Apple’s CEO.

1984: Iconic “1984” Macintosh commercial directed by Ridley Scott shows during the Super Bowl. The Macintosh computer goes on sale.

1985: Jobs and Sculley clash, leading to Jobs’ resignation. Wozniak also resigns from Apple.

1986: Jobs founds Next Inc., a new computer company making high-end machines for universities. He also buys Pixar from “Star Wars” creator George Lucas for $10 million.

1989: First NeXT computer goes on sale with a $6,500 price tag.

1991: Apple and IBM Corp. announce an alliance to develop new PC microprocessors and software. Apple unveils PowerBook portable Macintoshes.

1993: Apple introduces the Newton, a hand-held, pen-based computer. The company reports quarterly loss of $188 million in July, and CEO Sculley is replaced by Apple president Michael Spindler. Apple restructures and Sculley resigns as chairman. At Next, Jobs decides to focus on software instead of whole computers.

1994: Apple introduces Power Macintosh computers based on the PowerPC chip it developed with IBM and Motorola. Apple decides to license its operating software, allowing other companies to clone the Mac.

1995: The first Mac clones go on sale. Microsoft Corp. releases Windows 95, which is easier to use and more like the Macintosh. Apple struggles with competition, parts shortages and mistakes predicting customer demand. Pixar’s “Toy Story,” the first commercial computer-animated feature, hits theaters and Pixar goes to Wall Street with an IPO that raises $140 million.

1996: Apple buys Next for $430 million, for the operating system Jobs’ team developed. Gil Amelio replaces Spindler as CEO.

1997: Steve Jobs returns to Apple as an adviser, then “de facto head” of company; Amelio is pushed out. Jobs puts an end to Mac clones.

1998: Apple returns to profitability and unveils the iMac, a blue-and-white computer and monitor in one that set Apple on the path to its comeback. Apple also discontinues the Newton.

2000: Jobs is named CEO of Apple.

2001: The first iPod goes on sale, as do computers with OS X, the modern Mac operating system based on Next software.

2003: Apple launches the iTunes music store with 200,000 songs at 99 cents each, giving people a convenient way to buy music legally online. It sells 1 million songs in the first week.

2004: Jobs undergoes surgery for a rare but curable form of pancreatic cancer. Apple discloses his illness after the fact.

2005: Apple expands the iPod line with the tiny Nano and an iPod that can play video. The company also announces that future Macs will use Intel chips.

2006: Disney buys Pixar for $7.4 billion. Jobs becomes Disney’s largest individual shareholder, and much of his wealth is derived from this sale.

2007: Apple releases its first smartphone, the iPhone. Crowds camp overnight at stores to be one of the first to own the new device.

2008: Speculation mounts that Jobs is ill, given his weight loss. In September he kicks off an Apple event and says, “The reports of my death are greatly exaggerated,” making a play off a famous Mark Twain quote after Bloomberg News accidentally publishes, then retracts, an obituary that it had prepared in advance.

2009: Jobs explains severe weight loss by saying he has a treatable hormone imbalance and that he will continue to run Apple. Days later he backtracks and announces he will be on medical leave. He returns to work in June. Later it is learned that he received a liver transplant.

2010: Apple sells 15 million iPads, its newest gadget, in nine months, giving rise to a new category of modern touch-screen tablet computers.

Jan. 17, 2011: In a memo to Apple employees, Jobs announces a second medical leave with no set duration. Chief Operating Officer Tim Cook will fill in to run day-to-day operations. Jobs said he will continue as CEO and will be involved in major decisions.

Aug. 24, 2011: Apple announces that Jobs is resigning as CEO. The company says he will be replaced by Cook and that Jobs will stay on as chairman